energy conservation policy and esco development · jakarta, 19 juni 2013 energy conservation policy...

ESDM untuk Kesejahteraan Rakyat

Presented at:

Business Forum #5

“Energy Efficiency Business Opportunities”

Jakarta, 19 Juni 2013

ENERGY CONSERVATION POLICY AND ESCO DEVELOPMENT

by:

Maritje Hutapea

Direktor energy conservation


BACKGROUND

NATIONAL ENERGY CONSERVATION POLICY

NATIONAL ENERGY CONSERVATION PROGRAM

OPPORTUNITIES & CHALLENGES FOR IMPLEMENTING

ENERGY CONSERVATION IN INDONESIA

ESCO DEVELOPMENT

CLOSING

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OUTLINE

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0.0

500.0

1,000.0

1,500.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

200

220

240

260

2009 2011 2013 2015 2017 2019

Economic Growth

Population Growth

Population (million)

0

1000

2000

3000

4000

2009 2011 2013 2015 2017 2019

GDP( RP. Trliun)

2,177

3,943

6.1%

256

231 1.1%

Energy (million SBM)

712

1,316

7.1%

Growth of Energy Needs

ENERGY DEMAND


Oil, 46.77%

Coal, 23.91%

Gas, 24.29%

New and Renewable

Energy (NRE), 5.03%

Current Condition-

year

2011

Energy Elastisity = 1,65

Renewable Energy Share 5%

Oil, 20%

Coal, 33%

Gas, 30%

NRE, 17%

TARGET FOR 2025, PRESIDENTIAL

REGULATION NO. 5/2006

CONCERNING NATIONAL ENERGY

POLICY

Energy Elastisity less than 1 at 2025

Energy Intensity Reduction 1% / year

Optimizing new and renewable energy resources

Biofuel

5%

Geothermal

5%

Nuclear,

Hydro,

Solar,

wind,

And others NRE 5%

Liquified coal

2%


2007 2008 2009 2010 2011 2012

1. Electricity Subsidy 37,48 78,58 53,72 58,10 93,18 100,2

2. Fuel and LPG Subsidy 83,94 142,87 52,82 82,35 168,17 211,90

Total Subsidy 121,42 221,45 106,54 140,45 261,35 312,10

Trillion Rupiah

• Energy subsidy in 2012 Rp 312 Trillion (± US$ 32 billion), Fuel Rp 212 T; Electricity Rp 100 T

ENERGY SUBSIDY

2013*)

78,6

193,8

272,4

*) Rencana APBN 2013


Industry Transportation Household Commercial

82% 65% 70% 75%

18% 35% 30% 25%

Potential of Energy Saving

Potential of energy saving

Efficient energy consumptionSector

Potential of

Energy

Conservation(%)

Industry 18

Transportation 35

Household 30

Commercial 25

Sumber : RIKEN


POTENTIAL OF ENERGY SAVING IN INTENSIVE ENERGY CONSUMER (> 6000 TOE)

Source: Audit Energy Report, DJLPE, Ministry of Industy, and JICA 2006 - 2009

INDUSTRY TYPE

Potential Saving (%)

Total No Cost/

Low Cost Middle Cost High Cost

Iron and Steel 11 - 32 10 5 13

Cemen 15 - 22 5 5 8

Petrochemical 12 - 17 5 5 5

Textile 20 - 35 10 5 15

Glass and Ceramic 10 - 20 5 5 5

Pulp and Paper 10 - 20 5 5 5

Food 13 - 15 5 5 5

Average 18

Total Energy Consumption = 27 million TOE per year

Potential Energy Saving = 18% x 27 million TOE per year

= 5 million TOE equal to 58 TWh per year


• President Commitment on G-20 Pittsburgh and COP15 To reduce the

GHG Emission in 2020

• Presidential Regulation No. 61 & 71 Year 2011

26%

(767 mln Ton)

41%

(26%+15%)

NATIONAL COMMITMENT TO REDUCE GHG EMISSION

Own efforts Own efforts and

international support

Through the development

of new renewable energy

and implementing energy

conservation by all sectors


BACKGROUND





ESCO DEVELOPMENT

CLOSING

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ENERGY SUPPLY SIDE MANAGEMENT ENERGY DEMAND SIDE MANAGEMENT

TRANSFORMATION PARADIGM OF NATIONAL ENERGY MANAGEMENT

SUPPLY SUPPLY DEMAND DEMAND

Current condition: Future Condition:

1. Energy use has not been efficient

2. Energy demand are met with fossil energy at a cost

of whatever and even subsidized

3. Renewable energy as an alternative only

4. Renewable energy sources that are not utilized is

wasted God's gift

1. Minimize the energy use

2. Maximize the provision and utilization of renewable

energy, at least with the price of fossil energy avoided

cost, if necessary, subsidized

3. Fossil energy is used as a counterweight

4. Fossil energy sources are not utilized as a legacy for

their children and grandchildren / exported

Supplied by Fossil Energy, at any cost

(Subsidize)

Renewable Energy as an alternative

Inefficient Sectoral Energy Demand:

Household Transport Industry

Commercial

Maximize the supply and utilization of New

Renewable Energy, with Avoided Fossil Energy

Costs

Fossil Energy as balancing factor

Efficient Sectoral Energy Demand:

Household Transport Industry

Commercial

(CONSERVATION)

(DISVERSIFICATION


Oil 42%

Coal 34%

Gas 21%

NRE 3%

24%

24 %

47%

5,0 %

NRE

Gas

Coal

Oil

2010 2015 2020

2025

ENERGY

CONSERVATION

(15.6%)

EN

ER

GY

DIV

ER

SIV

ICA

TIO

N

BAU Presidential regulation No. No. 5/2006

VISI 25/25

25 %

32%

23%

20%

2785 Million BOE

1177 MillionBOE

Oil 20%

Coal 33%

Gas 30%

NRE 17%

3200 Million BOE

20%

30%

33%

17%

46,9% Oil

26,4%

Coal

21,9% Gas

4,8% NRE

23% Oil

32% Coal

20% Gas

25% NRE

2419 MBOE

1649 MBOE

20,6%

34.6%

41.7%

3,1%

3298 MBOE

NATIONAL ENERGY POLICY DIRECTION


Law No. 30 / 2007 Concerning ENERGY

Government Regulation No.70/2009 On Energy Conservation

Ministry of EMR Regulation No. 6/2011 on Affixing Label Energy Saving for

Swaballast Lamp

President Instruction No. 13/2011 on

Energy and Water Saving

Ministry of EMR Regulation No 13/2010 and No.14/2010 on Competency

Standard for Energy Manager

Presidential Regulation No. 5/2006 on

National Energy Policy

(Kebijakan Energi Nasional)

Presidential Regulation No. 61/2011 on

National Action Plan for

Reduction Greenhouse Gas Emission

Law and Its Derivative Related Regulations

Ministry of Manpower and Transmigration

Regulation No. 321 and 323/MEN/XII/2011 on

Standard Work Competence of Indonesia

for Energy Manager (SKKNI Manajer Energi

Ministry of EMR Regulation No.14 / 2012 on

Energy Management

Ministry of EMR Regulation No.13 / 2012 on

Electricity Consumption Savings

Ministry of EMR Regulation No.01 / 2013 on the Control of Oil

Fuel Use

REGULATION FRAMEWORK CONCERNING ON ENERGY CONSERVATION

Ministry of Manpower and Transmigration

Regulation No. 614/MEN/IX/2012 on

Standard Work Competence of Indonesia

for Energy Auditor (SKKNI Auditor Energi)

Ministry of EMR Regulation No.15/ 2012 on

Water Savings


BACKGROUND





ESCO DEVELOPMENT

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ESDM untuk Kesejahteraan Rakyat 14

ENERGY CONSERVATION PROGRAM(1)

1. Partnership on Energy Conservation

Free energy audit by the Government for industrial and building sector

Since conducted in 2003, around 912 participants from industries and buildings have

been audited

Monitoring and evaluation of the implementation of energy audit recommendation

2. Energy Management

Mandatory for energy users more than 6000 TOE per year

Enactment of Competence Standard for Energy Manager and Energy Auditor

Establishment of HAKE (Himpunan Ahli Konservasi Energi) as a Certification

Institution for Energy Manager

3. Energy Efficiency Standard and Labeling

Socialization of the EE S&L to the manufacturers and consumers

CFL Labeling Program

Issuing the regulation on EE label for AC and Refrigeration

Formulating performance test and EE criteria for the other home electronic appliances

ESDM untuk Kesejahteraan Rakyat 15

4. Developing Energy Conservation Clearing House

Developing clearing house as the centre of information and consultation for energy

conservation

Demonstrating an energy efficient office at the Directorate General of Electricity,

Annex Building 5th Floor

6. Raising Public Awareness

Conducting seminar/workshop, campaign, energy efficiency advertisement, leaflet/sticker etc.

Conducting socialization and campaign to the elementary, junior and senior high schools

Conducting National Energy Efficiency Competition at National Level and participating in

ASEAN Energy Award for building and energy management

5. Formulating Policy for Incentive and Disincentive

Formulating financial scheme for energy conservation investment

Formulating fiscal incentive policy (tax facility, import duty, etc.)



7. Providing Technical Assistance

Provide technical assistance on EE&C for central and regional government staff

Capacity building for the energy management of building and industry

Capacity Building for ESCO & Banking/Financing Institution

8. Monitoring and Evaluation

To energy user > 6.000 TOE/year

Implementation of Presidential Decree No. 13 Year 2011 about Energy and Water

Saving

Implementation of energy audit recommendation

9. Pilot Project

EE Street Lighting

16



10. International Cooperation

Bilateral Indonesia –Denmark (DANIDA) – Energy Efficiency in Industrial, Commercial

and Public Sector (EINCOPS)

Bilateral Indonesia-Netherland (NL Agency) – Energy Potential Scan (EPS)

Bilateral Indonesia-Japan (JICA & NEDO) – Demand Side Management

Multilateral with UNDP – Standard and Labeling

Multilateral with UNIDO – Energy Management Standard

Multilateral with ASEAN – Energy Efficiency and Conservation – Sub Sector Network

(EE&C SSN)

The other Donor Agency such as International Copper Association, dll

17


YEAR 2003 2004 2006 2007 2009 2010 2011 2012

BUDGET -

(PT. PLN)

-

(PT. PLN)

Rp. 2,4

billion

(APBN)

Rp. 25

billion

(APBN)

Rp. 4 billion

(APBN)

Rp. 20

billion

(APBN)

Rp. 22

billion

(APBN)

Rp. 18,5

billion

(APBN)

PARTICIPANTS 5 industry

and 6

building

3 industry

and 6

building

21

industry

and 11

building

138

industry

and 62

building

16 industry

and 24

building

105

industry

and 55

building

125

industry

and 70

building

104

industry

and 55

building

TOTAL OF

SAVING

POTENTIAL

78,4 GWh

= Rp. 50,8

billion

= 70,6 Kilo

Ton CO2

14, 8 GWh

= Rp. 6,9

billion =

13,32 Kilo

Ton CO2

40,7 GWh

= Rp. 40,4

billion

= 36,6 Kilo

Ton CO2

519 GWh

= Rp. 289

billion =

467.1 Kilo

Ton CO2

34 GWh

= Rp. 23,8

billion = 30

Kilo Ton

CO2

725 GWh

= Rp. 450

billion =

645 Kilo

Ton CO2

716.704

GWh = Rp

45 Trilliun=

645.000

kilo Ton

CO2

1.532

GWh= Rp

624 billion=

1.380 kilo

Ton CO2

TOTAL OF

ENERGY

SAVING

ACHIEVEMENT

34,4 GWh

= Rp. 22,2

billion

= 40 Kilo

Ton CO2

14,1 GWh

= Rp. 8,2

billion

= 12,7 Kilo

Ton CO2

30,1 GWh

= Rp. 19,9

billion

= 27,1 Kilo

Ton CO2

307 GWh =

Rp. 168, 8

billion =

276,3 Kilo

Ton CO2

15 GWh

= Rp. 10,7

billion =

13,6 Kilo

Ton CO2

175 GWh

= Rp. 110

billion =

157 Kilo

Ton CO2

345 GWh =

Rp 220

billion=

257,4 kilo

Ton CO2

-

Energy savings are generally tapped from energy saving measures which

mostly no cost and low cost

Higher energy saving can be tapped if medium and high cost recommedation are also implemented

Some of recomendation is not yet implemented because of limited funding

RESULT OF PARTNERSHIP PROGRAM ON EC


BACKGROUND





ESCO DEVELOPMENT

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• Based on study report of potential of energy efficiency

market that have been conducted by ReEx Capital Asia at

2010 showed that:

− Indonesia is the second largest energy efficiency market

in ASEAN

− Investment potential is predicted around US$1.4 billion up

to US$9.7 billion if include co-generation

− Saving potential per year : US$280 million (payback period

5 year in average)

• Energy efficient technologies has been available in the

domestic market

• The utilization of energy efficient technologies are proposed

to be one of prerequisite for government procurement

• Issue on climate change ( The use of energy in efficient way

will significantly contribute to the reduction of GHG

emission)

ENERGY CONSERVATION OPPORTUNITIES


1. Subsidy for energy is still high

2. Initial investment for energy efficient technology is relatively

higher

3. Most of the energy efficient technologies are still imported

4. Lack of coordination of stakeholders to implement energy

conservation

5. Financing institution/banking do not yet interested to

finance the energy efficiency Project ( Business in energy

efficiency is seen as uncertainty business)

ENERGY CONSERVATION CHALLENGES


BACKGROUND





ESCO DEVELOPMENT

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ESCO has an important role in the implementation of energy conservation

Until now, there is no “The Real ESCO” in Indonesia, although the energy efficient

technology traders has implemented the ESCO values in doing their business.

Doing Capacity Building for ESCO

Facilitating ESCO to the company that willing to implement the recomendation of energy

audit under “Program Kemitraan”

Cooperation of DJEBTKE-KESDM with Institut Essential Services Reform (IESR)-UK

Climate Change Unit to do the study ″ESCO Capacity and Business Assessment in

Indonesia” which aims to identify the capacity of ESCO in implementing energy

efficiency business model in Indonesia, as well as identifying needs and strategies on

ESCO development and energy efficiency business in next 3-5 years.

Drafting the Ministerial Regulation on Supporting Business Activities on Energy

Conservation, which aims to support the development of ESCO

ESCO DEVELOPMENT


BACKGROUND





ESCO DEVELOPMENT

CLOSING

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The energy conservation potential in all sectors in Indonesia is quite high, range from 18-35%, and Indonesia is the second largest energy efficient market in ASEAN

Cooperation and coordination all stakeholders (Government, Private including ESCO, Financing Institution/Banking, Academia, Research institutes, and energy consumers) should be enhanced in order to optimized the implementation of energy conservation in all sectors in Indonesia

ESCO has an important role in the implementation of energy conservation

CLOSING REMARK

THANK YOU

energy conservation policy and esco development · jakarta, 19 juni 2013 energy conservation policy...

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