Energy Management Policy in Indonesia and ASEAN

A Presentation for Workshop of ASEAN Coal Database and Information System

9-12 July 2012, Jakarta-Indonesia

ACE at a Glance

The ASEAN Centre for Energy (ACE) was established on January 1, 1999 as an Inter-Governmental Organization, guided by a Governing Council composed of SOE Leaders of the 10 ASEAN Member Countries.

ACE as a technical catalyst for economic growth and development of ASEAN by initiating, coordinating, facilitating and disseminating all energy activities to the region and the rest of the world.

Follow the blueprint for ASEAN cooperation in the field of energy: The ASEAN Plan of Action for Energy Cooperation (APAEC) 2010-2015, theme: “Bringing Policies to Actions: Towards a Cleaner, more Efficient and Sustainable ASEAN Energy Community.”

Seven (7) Program Areas: (1) ASEAN Power Grid, (2) Trans-ASEAN Gas Pipeline, (3) Coal and Clean Coal Technology, (4) Energy Efficiency and Conservation, (5) Renewable Energy, (6) Regional Energy Policy and Planning, and (7) Civilian Nuclear Energy.

The 3rd ASEAN Energy Outlook

Mid 2011, the ASEAN Centre for Energy released The 3rd ASEAN Energy Outlook.

A joint output by ASEAN Centre for Energy (ACE), the Institute of Energy Economics, Japan (IEEJ), and National ESSPA Teams.

Develop an energy demand and supply outlook model for the ASEAN region up to 2030.

Base on GDP Growth Targets of the 10 Member States (Business as Usual/BaU Scenario).

Energy Situation & Outlook

Primary Energy Consumption 1990 to 2030 (BaU)

Total primary energy consumption increased from 339 MTOE in 1995 to 511 MTOE in 2007 or 3.6% per annum, and will growth 4.5% per year from 2007 to reach 1,414 MTOE in 2030.

Indonesia's share is considering stable, around 41% in 1990 to 42% in 2030 or 3.7% growth on average per year.

Energy Situation & Outlook

Primary Energy Consumption 1990 to 2030 (BaU)

Among the energy sources consumed in the region, coal had the fastest growth rate increasing at an annual rate of 13.0% from 1995-2007 mostly due to the installation of coal-fired power plants in the region, and will increase from around 76 MTOE in 2007 to 414 MTOE in 2030, or annual growth rate of 7.7% per annum due

not only to the increasing demand of the industries but also that of the power sector.

Energy Situation & Outlook

Final Energy Consumption 1990 to 2030 (BaU)

Increased at an annual rate of 3.8% from 241 MTOE in 1995 to 375 MTOE in 2007, growth 4.4% per year from 375 MTOE in 2007 to 1,018 MTOE in 2030, driven by fast growth of transport sector and increasing per capita

income. Coal will have the second highest – after electricity – growth rate of 5.9% per annum. Its share will increase from 9.9% in 2007 to 13.5% in 2030.

Energy Situation & Outlook

Power Generation 1990 to 2030 (BaU)

Electricity production increased from 157 TWh in 1990 to 504 TWh in 2005 and 571 TWh in 2007, equivalent to an average annual growth rate of 7.9% over the 1990 to 2007 period.

In the future, electricity production is projected to increase to almost 2,414 TWh or at average annual growth rates of 6.5% and coal share will reach 47.4%.

Energy Situation & Outlook

CO2 Emission 1990 to 2030 (BaU)

The 4.5% annual growth in primary energy consumption will results in a corresponding 5.7% growth in CO2 emission. This is due largely to the projected 7.7% annual escalation of coal consumption which is the most

carbon-intensive fossil fuel.

Energy Situation & Outlook

Findings and Policy Implications

As member countries continue to pursue their economic goals, primary energy consumption and CO2 emission in region will increase three folds – increasing pressure on energy security and global environmental stability.

Governments have to face with tremendous challenges to simultaneously meet the goal of energy security and environmental protection. On one hand, ASEAN has to strive for the secured flow of energy supply to ensure sufficient supply at the minimum cost. On the other hand, has to deliberate carefully on the emission of greenhouse gases which becomes an increasingly important factor in the global community.

Appropriate energy efficiency and conservation programs, low emission technology, and increased shares of non-fossil fuels in Power Generation - would be needed to reduce carbon intensity and enhance energy security.

Energy Management

Regional Level: Policy

The 27th ASEAN Ministers on Energy Meeting (AMEM) in Mandalay, Myanmar, 29 July 2009, agreed among others:

1. To strengthen cooperation in energy efficiency and conservation through institutional capacity building and increasing private sector involvement including enhancing public awareness as well as expanding markets for energy efficient products to pursue the aspirational goal of reducing regional energy intensity of at least 8% by 2015 based on 2005 level (under Program Area No. 4 Energy Efficiency and Conservation).

2. To institute and maintain sustainable development on the use of renewable energy and its technologies to achieve a collective target of 15% for regional renewable energy in the total power installed capacity by 2015 (under Program Area No. 6 Renewable Energy).

Energy Management

Regional Level: Activities

Energy Efficiency and Conservation:

ASEAN Energy Awards for Energy Efficiency Building and Energy Management, Promotion of Energy Efficiency and Conservation (PROMEEC), ASEAN Energy Management Accreditation Scheme (AEMAS), Multi-country Training Program on Energy Conservation for ASEAN Countries (MTPEC), etc.

Renewable Energy:

Regional Energy Support Programme for ASEAN (ASEAN-RESP), develop “ASEAN RE Policy Paper” on long-term sustainability of Biofuels, Renewable Energy Project Competition of the ASEAN Energy Awards, etc.

Energy Management

National Level: Brunei Darussalam

Introduction of new policy on electricity tariff for residential sector starting January 1, 2012.

Efficiency improvement initiatives on Bukit Panggal combined cycle power station:

1. Achieved design efficiency (45%) in August 2011 since start up in 2007.

2. Estimated savings in 2011 was BND53 million.

3. Overall natural gas reduction by 4.8% compared in 2010 despite 0.5% increase in power demand.

Regulation & Guidelines: Energy Audit Guide, Building Guideline for New Buildings, Energy Management Guide, Phasing out of Incandescent Lamp in Government & Commercial buildings.

Energy Management

National Level: Cambodia

Cambodia’s energy policy aims to:

1. Provide an adequate supply of energy at reasonable and affordable price.

2. Ensure a reliable and secured electricity supply at reasonable prices, which facilitates the investments and developments of the national economy.

3. Encourage exploration and environmentally and socially acceptable development of energy resources needed for supply to all sectors.

4. Encourage the efficient use of energy and to minimize the detrimental environmental effects resulted from energy supply and consumption.

In 2001 the Mining Law promulgated to clarify the framework for mineral development and attract foreign investors in mineral exploration and mining in Cambodia with environmental consideration.

Energy Management

National Level: Indonesia

National Energy Policy Presidential Regulation No. 5/2006

Energy Act No 30/2007

Energy Conservation Govt Reg No 70/2009

1. Ministerial Regulation (MEMR) No. 13/2010 and No.14/2010 on Competency Standards for Energy Manager

2. Ministerial Regulation (MEMR) No. 13/2010 and No.14/2010 on Competency Standards for Energy Manager

1. Presidential Instruction No. 13/2011 On Energy and Water Saving

2. Ministerial Regulation (MEMR) No. 6/2011 on Energy Labeling for CFL

3. Presidential Regulation No. 61/2011 on National Action Plan on GHG Emission Reduction

Energy Management

National Level: Lao PDR

Ministry of Energy and Mines was re-structured in November 2011, where Department of Electricity was abolished and replaced by 2 new Departments and 1 Institute: Department of Energy Policy and Planning, Department of Energy Management (DEM), and Institute for the Promotion of Renewable Energy.

EE&C falls under DEM and the Institute where DEM work as Regulator , inspector, committee and Institute work for the promotion , pilot projects, demonstration projects.

Currently developing the national strategy and policy on EE&C funded by the ADB.

Energy Management

National Level: Lao PDR

Ministry of Energy and Mines was re-structured in November 2011, where Department of Electricity was abolished and replaced by 2 new Departments and 1 Institute: Department of Energy Policy and Planning, Department of Energy Management (DEM), and Institute for the Promotion of Renewable Energy.

EE&C falls under DEM and the Institute where DEM work as Regulator , inspector, committee and Institute work for the promotion , pilot projects, demonstration projects.

Degree on Exportation of Minerals has been recently issued in 2008 based on the capability and other condition of coal mining development in Laos. Coal is one of few commodities that not allow to export; due to the heavy domestic demand, all types of coal are preserved for supplying only for domestic consumption.

Energy Management

National Level: Malaysia

National Energy Policy:

1. Supply Objective: To ensure provision of adequate, secure and cost-effective energy supplies by developing indigenous energy resources, both non-renewable & renewable, using least-costs options, & diversifying supply resources within & outside the economy.

2. Utilisation Objective: To promote the efficient utilisation of energy and the elimination of wasteful & non-productive patterns of energy consumption.

Malaysia gas reserves are diminishing fast, so there is an urgent need to increased efforts to intensify EE.

Efficient Management of Electrical Energy Regulations 2008, under the Electricity Supply Act 2001: installations that consume 3 million kWh or more over a period of 6 months required to engage a registered electrical energy manager.

Energy Management

National Level: Myanmar

Myanmar’s energy policy aims to:

1. Maintain the status of energy independence.

2. Promote wider use of new and renewable sources of energy.

3. Promote energy efficiency & conservation.

4. Promote use of alternative fuels in household.

Development of Coal Resources in Myanmar would depend on the demand of coal in pyro metallurgical industry and also on the extent of application of clean coal technology along with future exploitation of coal reserves elsewhere in the country.

Energy Management

National Level: Philippines

Energy Policy as enunciated in RA 7638, to ensure a continuous, adequate, and economic supply of energy with the end in view of ultimately achieving self-reliance in the country’s energy requirements through the integrated and intensive exploration, production, management, and development of the country’s indigenous energy resources, and through the judicious conservation, renewal and efficient utilization of energy to keep pace with the country’s growth and economic development and taking into consideration the active participation of the private sector in the various areas of energy resource development.

Two (2) Pronged Program:

1. Power Conservation and Demand Management Program

2. Fuel Efficiency & Conservation Program

Energy Management

National Level: Singapore

Energy Management

National Level: Thailand

Thailand’s energy policy focuses on (1) Enhancing Energy Security, (2) Alternative Energy as National Agenda, (3) Promoting Energy Efficiency, (4) Fair and Stable Energy Pricing, and (5) Environmental Protection.

The long term national target on energy efficiency has been set to be the reduction of energy intensity which is the ratio of energy intensity per country’s GDP by 25% in the year 2030 compared with the based year in 2005. This target is also in line with the energy efficiency target announced by APEC Energy Minister Declaration.

While the short term and mid-term target has been set as a reduction of energy intensity for 8% and 15% in year 2015 and 2020 respectively. So with this challenging target, numbers of effective policies and measures has to be well considered in order to assure for the success.

Energy Management

National Level: Viet Nam

Diversified, reasonable and efficient exploitation of domestic resources combining with sensible importing and exporting.

Developing energy in close cooperation with environment and resources protection.

Establishing competitive energy market, diversifying investment and business modality in energy sector.

Improving the energy programs for rural areas, develop renewable energy to meet the energy demand, especially island, mountainous and far center areas.

Developing energy sector with comprehensive, efficient methods based on bringing into play domestic power with combination of extending international cooperation.

Big Questions?

How Individual Energy Management Policy and Plan from each ASEAN Member Countries support to:

1. Pursue the aspirational goal of reducing regional energy intensity of at least 8% by 2015 based on 2005 level?

2. Achieve a collective target of 15% for regional renewable energy in the total power installed capacity by 2015

Alternative Policy Scenario

Enriched The 3rd ASEAN Energy Outlook with an analysis of an alternative energy development path: analyzes the impact of the energy saving goals and action plans in the primary energy demand and CO2 emissions.

Regional Effort

Primary Energy Consumption 1990 to 2030 (APS)

While in BaU, Primary Energy Consumption will growth at 4.5% per annum from 511 MTOE in 2007 to 1,414 MTOE in 2030, in the APS, it's only 1,152 MTOE in 2030, 18.5% lower.

Regional Effort

Final Energy Consumption 1990 to 2030 (APS)

While in BaU, Final Energy Consumption in ASEAN will grow at an average annual rate of 4.4% from 375 MTOE to 1,018 MTOE in the period 2007-2030, in the APS, it will grow at a slower rate of 3.6% to 843 MTOE in 2030.

Regional Effort

CO2 Emission 1990 to 2030 (APS)

While in BaU, the emission will increase at 0.5% average annual rate, rise from 283 t-C/million USD in 2007 to 317 t-C/million USD in 2030 in the BAU. In the APS, on the other hand, CO2 intensity will

decrease by 0.7% per year to 240 t-C/million USD.

Conclusions

Energy Management is one of the most effective ways of meeting future demand, so that Prioritizing it into national level policymaking is compelling.

Each ASEAN Member Country should continue to strengthen regional cooperation especially in sharing best practices in energy development and utilization including energy management.

In pursuit of effective energy management policy, governments need to have effective institutions to develop appropriate energy management programmes and activities, and to monitor their implementation.

In parallel, it is also necessary to strengthen capacity of policymakers and programme implementers and provide sound assessment of its socio-economic benefits.

Thank You

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