|Policy status:||In Force|
|Policy Type:||Policy Support, Policy Support>Strategic planning|
|Policy Target:||Energy Sector, Energy Sector>Electricity Generation, Framework/ Multi-sectoral Policy|
Parliament adopted a revised National Energy Plan in February 2014 (NEP14), which was signed on 17 October 2014 as Government Regulation No. 79/2014. It replaces the 2006 National Energy Plan.
NEP14 introduces a number of important changes to energy policy planning. It focuses on re-establishing Indonesia’s energy independence by re-directing energy resources from export to the domestic market, and aims to rebalance the energy mix towards indigenous energy supplies. This translates into minimising oil consumption, increasing the exploitation and consumption of renewables and coal, optimising gas production and consumption, and consideration of nuclear energy as the option of last resort.
NEP14 sets out the ambition to transform the energy mix by 2025 as follows: 30% coal, 22% oil, 23% renewable resources and 25% natural gas. The sheer challenge of this target becomes even more striking when translated into absolute figures. Use of gas is to more than double, use of coal is to more than triple, and renewables are to grow more than eleven-fold by 2025. This includes decreasing energy elasticity as a function of GDP to below one by 2025 and a focus on energy efficiency measures.
NEP14 stipulates that exports of natural gas and coal are to be reduced gradually, and phased out eventually at a future date to be specified. This stipulation follows a similar decision for unprocessed minerals and reflects Indonesia’s concern over energy security and the finiteness of its resource base.
NEP14 also introduces energy emergency policy frameworks and actions. The government aims to establish energy emergency management structures and to build up oil buffer stocks. The concern over growing import dependency is also reflected in NEP14’s call to reduce energy subsidies both for fossil fuels and for electricity. Stopping short of calling for market-based pricing, NEP14 aims for an energy price that reflects “the economic equality value”, which is a basic concept of Indonesia’s economic development meaning that all Indonesians should have affordable access to energy.
Finally, NEP14 aims to complete the electrification of the country by 2020 and to ensure full access to energy, which is a difficult undertaking considering Indonesia’s immense geographical expanse.
|This record supersedes:||Presidential Regulation on National Energy Policy (No. 5/2006)|
Last modified: Fri, 26 Aug 2016 15:41:30 CEST