energy conservation policy and esco development · jakarta, 19 juni 2013 energy conservation policy...
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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
ESDM untuk Kesejahteraan Rakyat
BACKGROUND
NATIONAL ENERGY CONSERVATION POLICY
NATIONAL ENERGY CONSERVATION PROGRAM
OPPORTUNITIES & CHALLENGES FOR IMPLEMENTING
ENERGY CONSERVATION IN INDONESIA
ESCO DEVELOPMENT
CLOSING
I
OUTLINE
II
III
IV
V
VI
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
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%
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
• 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
ESDM untuk Kesejahteraan Rakyat
BACKGROUND
NATIONAL ENERGY CONSERVATION POLICY
NATIONAL ENERGY CONSERVATION PROGRAM
OPPORTUNITIES & CHALLENGES FOR IMPLEMENTING
ENERGY CONSERVATION IN INDONESIA
ESCO DEVELOPMENT
CLOSING
I
OUTLINE
II
III
IV
V
VI
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
BACKGROUND
NATIONAL ENERGY CONSERVATION POLICY
NATIONAL ENERGY CONSERVATION PROGRAM
OPPORTUNITIES & CHALLENGES FOR IMPLEMENTING
ENERGY CONSERVATION IN INDONESIA
ESCO DEVELOPMENT
CLOSING
I
OUTLINE
II
III
IV
V
VI
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.)
ENERGY CONSERVATION PROGRAM(2)
ESDM untuk Kesejahteraan Rakyat
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
ENERGY CONSERVATION PROGRAM(3)
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
BACKGROUND
NATIONAL ENERGY CONSERVATION POLICY
NATIONAL ENERGY CONSERVATION PROGRAM
OPPORTUNITIES & CHALLENGES FOR IMPLEMENTING
ENERGY CONSERVATION IN INDONESIA
ESCO DEVELOPMENT
CLOSING
I
OUTLINE
II
III
IV
V
VI
ESDM untuk Kesejahteraan Rakyat
• 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
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
BACKGROUND
NATIONAL ENERGY CONSERVATION POLICY
NATIONAL ENERGY CONSERVATION PROGRAM
OPPORTUNITIES & CHALLENGES FOR IMPLEMENTING
ENERGY CONSERVATION IN INDONESIA
ESCO DEVELOPMENT
CLOSING
I
OUTLINE
II
III
IV
V
VI
ESDM untuk Kesejahteraan Rakyat
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
ESDM untuk Kesejahteraan Rakyat
BACKGROUND
NATIONAL ENERGY CONSERVATION POLICY
NATIONAL ENERGY CONSERVATION PROGRAM
OPPORTUNITIES & CHALLENGES FOR IMPLEMENTING
ENERGY CONSERVATION IN INDONESIA
ESCO DEVELOPMENT
CLOSING
I
OUTLINE
II
III
IV
V
VI
ESDM untuk Kesejahteraan Rakyat
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