Bisnis Indonesia, October 12th 2010
State Budget every year should have renewable energy consumption target
JAKARTA: The Ministry of Energy and Mineral Resources (ESDM) is going to ask for incentives from the Ministry of Finance to accelerate the development of new and renewable energy (EBT), so that the vision 25/25, which mandates EBT to represent 25% of energy use by 2025 can be fulfilled.
Director General of EBT and Energy Conservation at the Ministry of ESDM Luluk Sumiarso estimated EBT use this year would only represent 4.4% of the total energy use, far smaller than the uses of fossil fuels, such as coal (30.7%), oil (43.9%), and gas (21%).
In the meantime, the government in the vision 25/25 targets the uses of EBT, coal, gas, and oil to represent 25%, 32%, 23%, and 20%, respectively of the total energy use. However, the government still provides subsidy incentives for fossil fuels.
“We will ask for incentives for EBT, so the energy will be far more attractive to develop. Just like the subsidy of IDR2,000 per liter given to bio-fuel,” he said yesterday.
To meet the vision 25/25, he explained, the ministry would conserve energy by up to 37.25% by optimizing the procurement and use of EBT. In this way, fossil energies only serve to balance the weight.
Based on Law 30/2007 on Energy, he continued, new energy sources are those produced by new technologies, such as nuclear, hydrogen, coal bed methane (CBM), liquified coal, and gasified coal.
In the meantime, renewable energy sources are those produced by sustainable energy sources, such as geothermal, wind, bio-energy, solar, water flow and drop, and sea movement and sea layer temperature difference.
According to him, the ministry was completing the clustering of energy types and sources, which would be inked in the draft of Government Regulation (PP) on EBT, which the bylaw of Energy Law 30/2007. “We are clustering the sources of new and renewable energy sources that we can prioritize to meet the vision 25/25 target.”
As for the use of non-fossil energy sources, Luluk explained the installed capacity ratio per source was still small, namely 5.55 for water source, 4.2% for geothermal, 17.56 for mini-hydro, 0.89% for biomass, 0% for solar power, 0.015% for wind power, and 1% for uranium.
This was unfortunate since non-fossil energy sources in Indonesia had huge potential.
Separately, Director of Reforminer Institute Pri Agung Rachmanto asked the government to break down the targets for 2025 into annual plan every time the government proposed its state budget. In this way, the progress of the realization of the energy use could be better monitored. Otherwise, it would be difficult to expect to meet the 25/25 vision targets.
Cost of factor Currently, said Pri Agung, fossil fuels were widely used due to their affordable costs. He took example that oil was still relatively cheap due to subsidies from the government. On the other hand, subsidies given to EBT, such as bio-fuel, were still small.
“The government should show a political will to make it a reality, such as by emphasizing the use of bio-ethanol for transportation.”
Furthermore, he explained the domestic use of bio-fuel only reached 250,000 kiloliters or less than 1% of the total capacity of 2.7 million kiloliters.
As for the uses of non-conventional gases, such as gas from CBM, liquefied coal and gasified coal, they would require supporting infrastructures. Otherwise, the gases would end up like conventional gases, most of which was exported. “The profit sharing system should also be clear to make investments in non-conventional gas attractive.”
On the other hand, Pri Agung emphasized the need for incentives in the downstream geothermal energy sector, so that there was a guarantee that State Electricity Company PLN would buy the energy to be distributed to the people. (NOM)