The Indonesian government to put forward a target to improve energy efficiency by 25 million barrels of oil equivalent (mboe) in 2025 - Photo: Privacy

JAKARTA (TheInsiderStories) – The Indonesian government to put forward a target to improve energy efficiency by 25 million barrels of oil equivalent (mboe) in 2025, officials said on Monday (01/27). The move as part of efforts to cut greenhouse gas emissions, reduce fuel bills and improve energy security.

From the demand side, the savings potential is broken down by sector, said energy and mineral resources (EMR) minister Arifin Tasrif, with the industrial sector at 5-26 percent (equivalent to 83.1 mboe), the commercial sector 12.5-16.5 percent (13.8 mboe), the household sector 0.3-26.3 percent (53.1 mboe) and the transportation sector by 3.2-18.9 percent (76.9 mboe).

“Meanwhile, from the supply side, the power sector absorbs 0.5-2 percent or equivalent to 14.7 mboe,” said Tasrif in a working meeting with parliament in Jakarta.

To achieve the target, the government, Tasrif continued, will implement an energy management system that includes energy audits in industry and buildings, online reporting on energy management, and the application of efficient technology. So energy users over 6,000 TOE or 69.78 GWh eq per year are required to implement energy management.

“Last year, identification of such users consisted of 304 companies and reported 148 energy management companies. Going forward, for companies that comply with energy management, field verification, and audit walkthroughs will be conducted,” the minister said.

In 2019, the minister explained, Indonesia’s energy-saving ratio was 13,789 GWh eq, or the equivalent of 8.1 mboe. That figure is able to reduce emissions by 2.42 million tons of CO2 eq. That figure is the same as building a 1,715 MW eq plant or equivalent to saving energy costs of Rp15.4 trillion.

To follow up on energy conservation, the government will revise government regulation number 70/2009 on energy conservation which includes: providing a legal umbrella for energy conservation service businesses, expanding the scope of compulsory energy management companies from 6,000 TOE users to 4,000 TOE (industrial, transportation, power sector) and 6,000 TOE to 500 TOE (building sector). The government will also conduct energy surveys and audits intensively, develop energy efficiency financing models and monitor energy conservation, Tasrif said.

This year, the government has raised investment targets in the energy sector to US$35.9 billion by 2020, increased $4.0 billion from the $31.9 billion realized in 2019. The target is greater than the $33.4 billion the government set last year.

The figures, the minister detailed, consisted of investments in the oil and gas sector of $13.8 billion, the electricity of $12.0 billion, minerals and coal of $7.8 billion and new renewable energy and conservation of $2.3 billion.

Tasrif said the ministry and its stakeholders tried to achieve the target. It is due to the energy sector is very strategic in boosting the country’s economy. The government, he said, would try the investment climate more passionate and conducive for investors.

“Investment realization usually follows the S-curve. We will spur investment to be faster. It’s in accordance with President Joko Widodo’s direction, we are asked to work faster, carefully and productively,” he said.

One of the highlights of the minister was to cut 186 permits. It is expected that these efforts can accelerate and simplify the investment process in the energy sector.

“The licensing aspect, both the speed and bureaucracy, will continue to be evaluated so that it can encourage faster investment and provide certainty. The investment is important because it will encourage employment so that it effectively becomes the country’s prime economic mover,” the minister said.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com