Energy Efficiency in Indonesia

Energy Efficiency in Emerging Economies (E4) programme findings and work

Indonesia was able to offset 23% of the impact of growing activity thanks to energy efficiency improvements between 2000 and 2017. By adopting the cost effective policies of the Efficient World Strategy, Indonesia could reduce CO2 emissions by 120 Mt CO2-eq by 2040 compared to expected trends and save households USD 7 billion due to reduced energy bills, as well as providing 26 million more families with access to clean cooking.


Overview


Energy efficiency improvements in Indonesia since 2000 prevented 9% of additional energy use in 2017. Economic activity moved from energy-intensive industry sectors to less-intensive manufacturing and service sectors and transport with shifted towards more efficient modes. However, these were entirely offset by increased energy use due to increased appliance ownership and building floor area.

These efficiency gains were achieved mostly in the industry and service sector and passenger transport sector.

	Energy savings due to energy efficiency
Industry and services	0.561
Residential Buildings	0.043
Passenger transport	0.090
Freight transport		-0.025

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The result of all of this is that 65 Mt CO2-eq emissions were prevented as was 6% of additional oil imports.

Energy efficiency opportunities


From 2000 to 2017 energy demand rose by 48% in Indonesia. By 2040, under the NPS, the country would see a 75% increase in energy demand. The Efficient World Scenario could limit this growth to just 50% reducing energy consumption by 2 EJ with savings mainly coming from the buildings (38%) and industry (35%) sectors, followed by the transport sector.

 

The cost effective measures incorporated in the EWS would also reduce CO2 emissions by 120 Mt CO2-eq by 2040 compared to expected trends and save households USD 7 billion due to reduced energy bills, as well as provide 26 million more families with access to clean cooking.

 	Historical	NPS	EWS

2012	0.39
2013	0.40
2014	0.43
2015	0.44
2016	0.45	0.45	0.45
2025		0.61	0.59
2030		0.70	0.65
2035		0.79	0.70
2040		0.88	0.76
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Sixteen percent of Indonesia’s final energy use in 2017 was covered by mandatory energy efficiency policies. While industry has the highest coverage due to Government Regulation 70/2009 covering establishments with 6000 toe annual consumption, transport had one of the lowest levels of coverage due to the absence of fuel efficiency standards for passenger cars and trucks.

	Mandatory policy coverage 
Industry	48
Transport	1
Residential buildings	1
Non-residential buildings	32
Total	16


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Achieving the opportunities in the Efficient World Strategy will require stronger policy actions. One third of the energy efficiency in the building sector will be driven by actions aimed at improving space cooling demand and another third will be obtained by improving appliance efficiency levels.

In the industry sector, gains in the less energy intensive sectors could improve energy intensity by 40% between now and 2040. In addition, motor-driven systems could play a major role in improving industrial efficiency.

Our Work in Indonesia


The E4 Programme has supported Indonesia through assessments of impact of energy efficiency policies, energy efficiency indicators data mapping, energy efficiency training weeks, as well as a special focus on Indonesia in the Energy Efficiency 2017 Market Report in Bahasa Indonesia language.

Currently. the E4 Programme is working with Indonesia in reviewing industrial energy efficiency regulations and impact assessments.

Related resources


IEA publications on Indonesia

Other resources