Energy in Indonesia

Energy in Indonesia describes energy and electricity production, consumption, import and export in Indonesia. In 2009 Indonesia produced oil, coal, natural gas and palm oil, utilised also as energy raw material in 2010. Renewable energy potential in Indonesia is high: solar, wind, hydro and geothermal energy. Tropical rain forests and peat land areas have extensive coal storage. Indonesia is a geologically unstable country. According to IEA Indonesia was the 10th top natural gas producer in 2009: 76 billion cubics (bcm) 2.5% of world production of which 36 bcm was exported. In 2009 Indonesia was the 5th top coal producer: 263 million tonnes hard coal and 38 million tonnes brown. The majority of this, 230 Mt of hard coal, was exported.[1] Indonesia has significant energy resources, starting with oil – it has 22 billion barrels of conventional oil and gas reserves, of which about 4 billion are recoverable. That's the equivalent of about 10 years of oil production and 50 years of gas. It has about 8 billion barrels of oil-equivalent of coal-based methane (CBM) resources. It has 28 billion tonnes of recoverable coal and has 28 gigawatts (GW) of geothermal potential.

Overview
Energy in Indonesia[2]
Population
(million)		 Primary energy
(TWh)		 Production
(TWh)		 Export
(TWh)		 Electricity
(TWh)		 CO2-emission
(Mt)
2004217.62,0243,001973104336
2007225.62,2173,8511,623127377
2008228.32,3114,0351,714134385
2009230.02,3494,0921,787140376
2010239.92,4174,4362,007154411
2012242.32,4314,5892,149166426
2012R246.92,4845,1202,631181435
2013250.02,4855,3502,858198425
Change 2004-1010.2%19.4%48%106%48%22%
Mtoe = 11.63 TWh

2012R = CO2 calculation criteria changed, numbers updated

According to IEA energy production increased 34% and export 76% from 2004 to 2008 in Indonesia.

Energy by sources

Fossil Fuel Energy Sources

Coal

Indonesia is well-supplied with medium and low-quality thermal coal. At current rates of production, Indonesia's coal reserves are expected to last for over 80 years. In 2009 Indonesia was the world's second top coal exporter sending coal to, for example, China, India, Japan and Italy. Kalimantan (Borneo) and South Sumatra are the centres of Indonesia’s coal mining. In recent years, production in Indonesia has been rising rapidly, from just over 200 mill tons in 2007 to over 400 mill tons in 2013. Recently (December 2013), the chair of the Indonesian Coal Mining Association said the production in 2014 may reach 450 mill tons.[3]

The Indonesian coal industry is rather fragmented. Output is supplied by a few large producers and a large number of small firms. Large firms in the industry include the following:[4]

  • PT Bumi Resources (the controlling shareholder of large coal firms PT Kaltim Prima Coal and PT Arutmin Indonesia)
  • PT Adaro Energy
  • PT Kideco Jaya Agung
  • PT Indo Tambangraya Megah
  • PT Berau Coal
  • PT Tambang Batubara Bukit Asam (state-owned)

Coal production poses risks for deforestation in Kalimantan. According to one Greenpeace report, a coal plant in Indonesia has decreased the fishing catches and increased the respiratory-related diseases,[5]

Oil
Indonesia used to be a net oil exporter.

Oil is a major sector in the Indonesian economy. During the 1980s, Indonesia was a significant oil-exporting country. Since 2000, domestic consumption has continued to rise while production has been falling, so in recent years Indonesia has begun importing increasing amounts of oil. Within Indonesia, there are considerable amounts of oil in Sumatra, Borneo, Java, and West Papua Province. There are said to be around 60 basins across the country, only 22 of which have been explored and exploited.[6] Main oil fields in Indonesia include the following:

  • Minas. The Minas field, in Riau in Sumatra, operated by the US-based firm Chevron Pacific Indonesia, is the largest oil block in Indonesia.[7] Output from the field is around 20-25% of current annual oil production in Indonesia.
  • Duri. The Duri field, in Bengkalis Regency in Riau in Sumatra, is operated by the US-based firm Chevron Pacific Indonesia.[8]
  • Rokan. The Rokan field, in Riau in Sumatra, operated by Chevron Pacific Indonesia, is a recently developed large field in the Rokan Hilir Regency.
  • Cepu. The Cepu field, operated by Mobil Cepu Ltd which is a subsidiary of US-based Exxon Mobil, is on the border of Central and East Java near the town of Tuban. The field was discovered in March 2001 and is estimated to have proven reserves of 600 million barrels of oil and 1.7 trillion cu feet of gas. Development of the field has been subject to on-going discussions between the operators and the Indonesian government.[9] Output is forecast to rise from around 20,000 bpd in early 2012 to around 165,000 bpd in late 2014.[10]

Gas
Indonesia's gas balance

There is growing recognition in Indonesia that the gas sector has considerable development potential.[11] In principle, the Indonesian government is supporting moves to give increasing priority to investment in natural gas. In practice, private sector investors, especially foreign investors, have been reluctant to invest because many of the problems that are holding back investment in the oil sector also affect investment in gas. At present (mid 2013), main potential gas fields in Indonesia are believed to include the following:

  • Mahakam. The Mahakam block in East Kalimantan, under the management of Total E&P Indonesie with participation from the Japanese oil and gas firm Inpex, provides around 30% of Indonesia's natural gas output. In mid 2013 the field was reported to be producing around 1.7 billion cu ft (48 million m3) per day of gas as well as 67,000 barrels (10,700 m3) of condensate. At the time discussions were underway about the details of the future management of the block involving a proposal that Pertamina take over all or part of the management of the block.[12] In October 2013 it was reported that Total E&P Indonesie had announced that it would stop exploration for new projects at the field.[13] In 2015 the Energy and Resources Minister issued a regulation stipulating that the management of the block would be transferred from Total E&P Indonesie and Inpex, which had managed the field for over 50 years since 1966, to Pertamina.[14] In late 2017, it was announced that Pertamina Hulu Indonesia, a subsidiary of Pertamina, would take over management of the block on 1 January 2018.
  • Tangguh. The Tangguh field in Bintuni Bay in West Papua Province operated by BP (British Petroleum) is estimated to have proven gas reserves of 4.4 trillion cu ft (120 billion m3). It is hoped that annual output of the field in the near future might reach 7.6 million tons of liquefied natural gas.[15]
  • Arun. The Arun field in Aceh has been operated by ExxonMobil since the 1970s. The reserves at the field are now largely depleted so production is now slowly being phased out. At the peak, the Arun field produced around 3.4 million cu ft (96 thousand m3) of gas per day (1994) and about 130,000 of condensate per day (1989). ExxonMobil affiliates also operate the nearby South Lhoksukon A and D fields as well as the North Sumatra offshore gas field.[16] In September 2015, ExxonMobil Indonesia sold its assets in Aceh to Pertamina. The sale included the divestment by ExxonMobil of its assets (100%) in the North Sumatra Offshore block, its interests (100%) in B block, and its stake (30%) in the PT Arun Natural Gas Liquefaction (NGL) plant. Following the completion of the deal, Pertamina will have an 85% stake in the Arun NGL plant.[17]
  • East Natuna. The East Natuna gas field (formerly known as Natuna D-Alpha) in the Natuna Islands in the South China Sea is believed to be one of the biggest gas reserves in Southeast Asia. It is estimated to have proven reserves of 46 trillion cu ft (1.3 trillion m3) of gas. The aim is to begin expanded production in 2020 with production rising to 4,000 million cu ft/d (110 million m3/d) sustained for perhaps 20 years.[18]
  • Banyu Urip. The Banyu Urip field, a major field for Indonesia, is in the Cepu block in Bojonegoro Regency in East Java. Interests in the block are held by Pertamina (45%) through its subsidiary PT Pertamina EP Cepu and ExxonMobil Cepu Limited (45%) which is a subsidiary of ExxonMobil Corporation. ExxonMobil is the operator of the block.[19]
  • Masela. The Masela field, currently (early 2016) under consideration for development by the Indonesian Government, is situated to the east of Timor Island, roughly halfway between Timor and Darwin in Australia. The main investors in the field are currently (early 2016) Inpex and Shell who hold stakes of 65% and 35% respectively. The field, if developed, is likely to become the biggest deepwater gas project in Indonesia, involving an estimated investment of between $14–19 billion. Over 10 trillion cu ft (280 billion m3) of gas are said to exist in the block.[20] However, development of the field is being delayed over uncertainty as to whether the field might be operated through an offshore or onshore processing facility. In March 2016, after a row between his ministers,[21] President Jokowi decreed that the processing facility should be onshore.[22] This change of plans will involve the investors in greatly increased costs and will delay the start of the project. It was proposed that they submit revised Plans of Development (POD) to the Indonesian Government.[23]
  • See also List of gas fields in Indonesia.

Shale

There is potential for tight oil and shale gas in northern Sumatra and eastern Kalimantan.[24] There are estimated to be 46 trillion cu ft (1.3 trillion m3) of shale gas and 7.9 billion barrels (1.26×109 m3) of shale oil which could be recovered with existing technologies.[25] Pertamina has taken the lead in using hydraulic fracturing to explore for shale gas in northern Sumatra. Chevron Pacific Indonesia and NuEnergy Gas are also pioneers in using fracking in existing oil fields and in new exploration. Environmental concerns and a government-imposed cap on oil prices present barriers to full development of the substantial shale deposits in the country.[26] Sulawesi, Seram, Buru, Irian Jaya in eastern Indonesia have shales that were deposited in marine environments which may be more brittle and thus more suitable for fracking than the source rocks in western Indonesia which have higher clay content.[25]

Coal Bed Methane

With 453 trillion cu ft (12.8 trillion m3) of Coal Bed Methane (CBM) reserve mainly in Kalimantan and Sumatra, Indonesia has potential to redraft its energy charts as United States with its Shale Gas. With low enthusiasm to develop CBM project, partly in relation to environmental concern regarding emissions of greenhouse gases and contamination of water in the extraction process, the government targeted 8.9 million cu ft (250 thousand m3) per day at standard pressure for 2015.[27]

Renewable energy sources

The contribution of renewable sources of energy to energy supply as a percentage of total primary energy (potential) supply in 2010 was 34.5%.[28] Renewable generation sources supplied 5% to 6% of Indonesia's electricity in 2015.[29][30] Indonesia has set a target of 23% of electricity generation from renewable sources by 2025.[31][32]By November 2018, Indonesia had announced it was unlikely to meet the 23% renewable energy by 2025 target set in the Paris Accords.[33]

In February 2020, it was announced that the People's Consultative Assembly is preparing its first renewable energy bill.[34]

Biomass

An estimated 55% of Indonesia's population, i.e. 128 million people primarily rely upon traditional biomass (mainly wood) for cooking.[35] Reliance on this source of energy has the disadvantage that poor people in rural areas have little alternative but to collect timber from forests, and often cut down trees, to collect wood for cooking.

A pilot project of Palm Oil Mill Effluent (POME) Power Generator with capacity of 1 Megawatt has been inaugurated in September 2014.[36] Indonesia has many Palm Oil Mills.

Hydroelectricity

Indonesia has set a target of 2 GW installed capacity in hydroelectricity, including 0.43 GW micro hydro, by 2025.[37]

Geothermal energy
Main article: Geothermal power in Indonesia

Indonesia uses some geothermal energy.[38] According to the Renewable Energy Policy Network's Renewables 2013 Global Status Report, Indonesia has the third largest installed generating capacity in the world. With 1.3 GW installed capacity, Indonesia trails only the United States (3.4 GW) and the Philippines (1.9 GW). However it leads Mexico (1.0 GW), Italy (0.9 GW), New Zealand (0.8 GW), Iceland (0.7 GW), and Japan (0.5 GW).[39] Current official policy is to encourage the increasing use of geothermal energy for electricity production. Geothermal sites in Indonesia include the Wayang Windu Geothermal Power Station and the Kamojang plant, both in West Java.

The development of the sector has been proceeding rather more slowly than hoped. Expansion appears to be held up by a range of technical, economic, and policy issues which have attracted considerable comment in Indonesia. However, it has proved difficult to formulate policies to respond to the problems.[40]

Two new plants are slated to open in 2020, at Dieng Volcanic Complex in Central Java and at Mount Patuha in West Java.[41]

Wind power

On average, low wind speeds mean that for many locations there is limited scope for large-scale energy generation from wind in Indonesia. Only small (<10 kW) and medium (<100 kW) generators are feasible.[42] For Sumba Island in East Nusa Tengarra (NTT), according to NREL, three separate technical assessments have found that "Sumba’s wind resources could be strong enough to be economically viable, with the highest estimated wind speeds ranging from 6.5 m/s to 8.2 m/s on an annual average basis."[43] A very small amount of (off-grid) electricity is generated using wind power. For example, a small plant was established at Pandanmino, a small village on the south coast of Java in Bantul Regency, Yogyakarta Province, in 2011. However it was established as experimental plant and it is not clear whether funding for long-term maintenance will be available.[44]

Indonesia’s first wind farm opened in 2018, the 75MW Sidrap Wind Farm in Sindereng Rappang regency, South Sulawesi.[45]

Solar power

The Indonesian solar PV sector is relatively underdeveloped but has significant potential. However, for a range of reasons, it is unlikely that it will be practical to expand electricity output from solar sources in Indonesia quickly. A range of technical, financial, economic and social constraints are likely to be constraints on the rapid installation of solar power in Indonesia, including in rural areas.[46]

Output from the solar photovoltaic sector is almost exclusively set aside for decentralised rural electrification. In 2011 the sector produced a relatively small amount of electricity—only 22 MWh.[47]

Use of energy

Transport sector

Much energy in Indonesia is used for domestic transportation. The dominance of private vehicles - mostly cars and motorbikes - in Indonesia has led to an enormous demand for fuel. Energy consumption in the transport sector is growing by about 4.5% every year. There is therefore an urgent need for policy reform and infrastructure investment to enhance the energy efficiency of transport, particularly in urban areas.[48]

There are large opportunities to reduce both the energy consumption from the transport sector, for example through the adoption of higher energy efficiency standards for private cars/motorbikes and expanding mass transit networks. Many of these measures would be more cost-effective than the current transport systems.[49] There is also scope to reduce the carbon intensity of transport energy, particularly through replacing diesel with biodiesel or through electrification. Both would require comprehensive supply chain analysis to ensure that the biofuels and power plants are not having wider environmental impacts such as deforestation or air pollution.[50]

Electricity sector

Access to electricity

Over 50% of households in 2011 had an electricity connection. An estimated 63 million people in 2011 did not have direct access to electricity.[51]

Organisations

The electricity sector, dominated by the state-owned electricity utility Perusahaan Listrik Negara, is another major consumer of primary energy.

Government policy
Ignasius Jonan, Indonesian Minister of Energy and Mineral Resources

Major energy companies in Indonesia
The logo of Pertamina

Indonesian firms

Foreign firms

  • US-based firm PT Chevron Pacific Indonesia is the largest producer of crude oil in Indonesia; Chevron produces (2014) around 40% of the crude oil in Indonesia
  • Total E&P Indonesia which operates the East Mahakam field in Kalimantan and other fields
  • ExxonMobil is one of the main foreign operators in Indonesia
  • Equinor, a Norwegian multinational firm, which has been operating in Indonesia since 2007, especially in Eastern Indonesia
  • BP which is a major LNG operator in the Tangguh gas field in West Papua.
  • ConocoPhillips which currently operates four production-sharing contracts including at Natuna and in Sumatra.
  • Inpex, a Japanese firm established in 1966 as North Sumatra Offshore Petroleum Exploration Co. Ltd.

Global warming
Main article: Climate change in Indonesia

The CO2 emissions of Indonesia in total were over Italy in 2009. However, in all greenhouse gas emissions including construction and deforestation in 2005 Indonesia was top-4 after China, US and Brazil.[52]

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See also

References
  1. "Key World Energy Statistics 2010" (PDF). International Energy Agency. 2010. Retrieved 13 September 2011.
  2. IEA Key World Energy Statistics Statistics 2015, 2014 (2012R as in November 2015 + 2012 as in March 2014 is comparable to previous years statistical calculation criteria, 2013, 2012, 2011, 2010, 2009 Archived 7 October 2013 at the Wayback Machine, 2006 Archived 12 October 2009 at the Wayback Machine IEA October, crude oil p.11, coal p. 13 gas p. 15
  3. Raras Cahyafitri, 'Coal minders to boost production', The Jakarta Post, 31 December 2013.
  4. Raras Cahyafitri, 'Coal miners sell more in first half, but profits remain stagnant', The Jakarta Post, 5 August 2013.
  5. The True Cost of Coal Greenpeace 27 November 2008
  6. Randgga D. Fadillah, '80 percent of oil and gas revenues pay for subsidies', The Jakarta Post, 21 May 2012.
  7. For some details of Chevron's operations in Indonesia, see the Chevron official Indonesia Fact Sheet Archived 9 June 2013 at the Wayback Machine.
  8. Ahmal W. Azwar, 'Chevron kicks off Duri field expansion in Sumatra', The Jakarta Post, 27 October 2012.
  9. Alfian, 'Cepu delay losses to RI could be up to $150 million', The Jakarta Post, 15 May 2009. See also Amahl S. Azwar, 'Exxon's new boss urged to be more "flexible"', The Jakarta Post, 5 June 2013.
  10. Rangga D. Fadillah, 'Production target "depends on Cepu block"', The Jakarta Post, 18 January 2012.
  11. Amahl S. Azwar, 'Energy: RI to focus on gas potential with new projects this year', The Jakarta Post, 8 January 2013.
  12. Amahl S. Awar, 'Total 'keen' to develop Mahakam with Pertamina', The Jakarta Post, 26 March 2013.
  13. Amahl S. Swar, 'Total to 'stop' Mahakam block development amid uncertainty', The Jakarta Post, 5 October 2013.
  14. Salis W. Aprilian, 'Sharing risk in the Mahakam Block', The Jakarta Post, 22 September 2015.
  15. Amahl S. Aswan, 'Fujian may pay more of Tangguh gas', The Jakarta Post, 17 May 2013.
  16. See the Aceh Production Operations Archived 20 September 2015 at the Wayback Machine of ExxonMobil
  17. Raras Cahyafitri, 'ExxonMobil sells Aceh assets to Pertamina', The Jakarta Post, 14 September 2015.
  18. Amahl S. Azwar, 'Consortium expects govt approval on East Natuna', The Jakarta Post, 26 November 2012.
  19. Raras Cahyafitri, 'Pertamina starts delivery of Cepu oil to Cilacap, Balongan', The Jakarta Post, 14 April 2015.
  20. Ina Parlina and Raras Cahyafitri, 'Another delay for the Masela gas block development.', The Jakarta Post, 30 December 2015.
  21. Anton Hermansyah, 'Masela saga, another comical brouhaha', The Jakarta Post, 2 March 2016
  22. Ayomi Amindoni, 'Masela saga ends as Jokowi announces onshore scheme', The Jakarta Post, 23 March 2016.
  23. Ayomi Amindoni, 'Inpex, Shell committed to Masela: SKKMigas', The Jakarta Post, 24 March 2016.
  24. Data are scarce. According to a 2014 study which made reference to Indonesia, "Shale gas resources [in Indonesia] might be substantial, but have been subjected to scant independent scrutiny." See Michael M.D Ross, 'Diversification of Energy Supply: Prospects for Emerging Snergy Sources' Archived 14 February 2015 at the Wayback Machine, ADB Economics Working Paper Series, No 403, 2014, p. 8.
  25. "Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States" (PDF). U.S. Energy Information Administration (EIA). June 2013. Retrieved 11 June 2013.
  26. Charlie Campbell (25 June 2013). "Indonesia Embraces Shale Fracking — but at What Cost?: Shale fracking has already caused waves in the U.S. and is poised to similarly shake up Southeast Asia's energy landscape". Time. Retrieved 25 June 2013.
  27. Rohmad Hadiwijoyo (21 April 2014). "CBM could redraft Indonesia's energy charts".
  28. OECD (2013) Factbook 2013: Economic, Environmental and Social Statistics, DOI: 10.1787/factbook-2013-en
  29. Indonesia Sets 19% Renewable Energy Target For 2019, Clean Technica
  30. Indonesia Energy Situation, Energypedia
  31. REN 21 (2013), Renewables 2013 Global Status Report, p.106
  32. Gokkon, Basten (14 February 2020). "In Indonesian renewables bill, activists see chance to move away from coal". Mongabay Environmental News. Retrieved 19 February 2020.
  33. "Indonesia Struggles to Meet Renewable Energy Target". Voice of America. 29 November 2018. Retrieved 19 February 2020.
  34. Gokkon, Basten (14 February 2020). "In Indonesian renewables bill, activists see chance to move away from coal". Mongabay Environmental News. Retrieved 19 February 2020.
  35. REN 21 (2013), Renewables Global Status Report, p.125.
  36. Ali Hidayat (16 September 2014). "Indonesia Builds First POME Power Generator".
  37. REN 21 (2013), Renewables Global Status Report, p.109.
  38. Renewables 2007 Global Status Report Archived 29 May 2008 at the Wayback Machine, REN21 sihteeristö (Pariisi) ja Worldwatch institute (Washington, DC), 2008, page 8
  39. Renewables 2013 Global Status Report
  40. Slamet Susanto, 'RI's geothermal energy still "untouched"', The Jakarta Post, 13 June 2013, and 'Govt set to raise prices of geothermal power', The Jakarta Post, 13 June 2013. See also Hanan Nugroho, 'Geothermal: Challenges to keep the development on track', The Jakarta Post, 23 October 2013.
  41. "Tapping into Indonesia's Geothermal Resources". Climate Investment Funds. 6 July 2020. Retrieved 28 July 2020.
  42. Hasan MH, Mahlia TM, Nur H (2012). "A review on energy scenario and sustainable energy in Indonesia". Renewable and Sustainable Energy Reviews. 16 (4): 2316–2328. doi:10.1016/j.rser.2011.12.007.
  43. Hirsch, B., K. Burman, C. Davidson, M. Elchinger, R. Hardison, D. Karsiwulan, and B. Castermans. 2015. Sustainable Energy in Remote Indonesian Grids: Accelerating Project Development. (Technical Report) NREL/TP-7A40-64018. Golden, CO: National Renewable Energy Laboratory. http://www.nrel.gov/docs/fy15osti/64018.pdf.
  44. Salmet Susanto, 'Alternative energy: Pandanmino, self-sufficient in electricity due to wind power', The Jakarta Post, 5 November 2012.
  45. Andi, Hajramurni (2 July 2018). "Jokowi inaugurates first Indonesian wind farm in Sulawesi". The Jakarta Post. Retrieved 19 February 2020.
  46. For a survey of issues involved in expanding capacity in the solar electricity sector in developing Asia, see Michael M.D Ross, 'Diversification of Energy Supply: Prospects for Emerging Energy Sources', Archived 14 February 2015 at the Wayback Machine ADB Economics Working Paper Series, No 403, 2014.
  47. Observ'ER (2012) Worldwide electricity production from renewable energy sources: Stats and figures series: Fourteenth Inventory - Edition 2012
  48. Leung KH (2016). "Indonesia's Summary Transport Assessment" (PDF). Asian Development Bank.
  49. Colenbrander S, Gouldson A, Sudmant AH, Papargyropoulou E (2015). "The economic case for low-carbon development in rapidly growing developing world cities: A case study of Palembang, Indonesia" (PDF). Energy Policy. 80: 24–35. doi:10.1016/j.enpol.2015.01.020.
  50. "Biofuels policy in Indonesia: Overview and status report".
  51. REN 21 (2013), Renewables Global Status Report, p.123, Table R17.
  52. World carbon dioxide emissions data by country: China speeds ahead of the rest Guardian 31 January 2011
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