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Indonesia Country Report

Indonesia Country Report

Research and Development on Energy and Environment in Indonesia

Hadiyanto1,*, Sudharto P Hadi2, N. Agya Utama3

1 Chemical Engineering Department, Faculty of Engineering Diponegoro University, INDONESIA

2 Postgraduate Program on Environmental Studies, Diponegoro University, INDONESIA

3 Graduate School Energy Science, Kyoto University, JAPAN

* Corresponding Author. Tel: (+62) 247460058, Fax: (+62) 2476480675,

E-mail: h.hadiyanto* (replace * with @)


Indonesia is an archipelagic countries which currently being a net importer of oil to supply national energy demands. The consumption of energy is already over the energy reserves and therefore searching of renewable energy potential is an obligation. Through its vision of 25/25, the government actively encourages the use of renewable energy resources, and expected to cover 25% of energy demand in 2025. This paper describes briefly energy outlook in Indonesia, from reserved energy and its consumption, and government policy to support this energy crisis.

Keywords: Indonesia energy outlook, vision 25/25, renewable energy


Indonesia is an archipelagic country in the world which covers 1,906,240 km2 area and consists of 17,506 islands. Indonesia has a thriving economy at the intersection of the Pacific and Indian oceans, between Asia and Australia and it is located at 95° to 141° eastern longitude, and latitude between 6° North and 11° 8’ South 30 [1]. In addition, Indonesia shares land borders with Papua New Guinea, East Timor, and Malaysia. Other neighboring countries include Singapore, Philippines, Australia, and the Indian territory of the Andaman and Nicobar Islands.

Current population of Indonesia is approximately 241 million people which make Indonesia as the world’s fourth-largest country in terms of population with estimation GDP per capita USD 3,550 while the economy growth of 6% in 2011[2][3]. Due to its many islands, Indonesia is facing problem of equitable development especially concerning energy supply to its society. Some of Indonesian societies in many rural areas still do not have access to electricity and the rest of it does not have any guarantee on the sustainability of energy supply. It is shown by current national electricity ratio of 75% which is mostly dominated by Java and Bali islands (>90%). Respecting to energy consumption to stimulate economic growth (elasticity index), Indonesia has higher elasticity index (1.6) as compared to Thailand and Singapore with 1.4 and 1.1, respectively. In other parameter such as the energy intensity which showing tonne oil equivalent of energy needed to obtain Gross Domestic Revenue of US 1 million dollar, Indonesia has 565 TOE. This energy intensity is higher than Malaysia and average of OECD countries value of 439 TOE and 139 TOE, respectively.

The energy demand in Indonesia is mainly supplied by oil reserves and coal which currently cover 43% and 34.5% of national energy demands. Energy consumption in Indonesia has grown rapidly (annually 7%) as indicated in Figure 1.

Available oil resource in Indonesia is 1,132.96 MTOE and it spreads all over region of Indonesia. The biggest oil reserve is in Sumatera Island (Central Sumatera) with almost 49.4%, followed by East Java with 13.2%, South Sumatera 11.2% and Kalimantan island 8.6% from total available oil resource [5]. Natural gas resource in Indonesia is also abundant, with total reserve about 157.14 TSCF. The biggest natural gas reserve placed in Natuna Island with 32.7%, followed by Sumatera Island 21.3% and Papua with 9.68%. The rest of natural gas reserves were consists in Kalimantan, Java, Maluku and Sulawesi Island [6]. Beside oil and natural gas, Indonesia also has coal as fossil energy resource. Total coal resource based on latest status (December 2010) were 104,943.59 million tonnes, which is equivalent with 73,145.68 MTOE. Almost all Indonesia coal resource was residing in Sumatera and Kalimantan Island (49% each). The rest of coal resources were consists in Sulawesi, Papua and Java Island [7].

Along with fossil energy resources, Indonesia was blessed with a large amount of renewable resources such as hydropower, geothermal, biomass, wind, and solar. Indonesia has almost 150 active volcanoes, since it is located in the “ring of fire” volcano belt and estimated to hold approximately 40% of the world’s geothermal reserves, equivalent to some 27 GW of power spread out in 276 locations throughout Indonesia. Most geothermal potential can be found on Sumatra (51%), Java and Bali (34.26%) and Sulawesi (7.4%) [8]. Hydropower has the highest potential energy resources among the other renewable resources, but it has not been effectively utilized. Hydropower potential of Indonesia is estimated at 75.00 GW, but total installed hydropower capacity is only 4.2 GW. The hydropower potential can be found in several islands of Indonesia such as Papua (29.8%), Kalimantan (28.8%), Sumatera (20.8%) and the rest were found in Sulawesi, Java, Bali and Maluku [8].

There are several types of biomass in Indonesia which can be converted into energy; first generation such as starchy and sugary biomass and second generation such as lignocelluloses biomass. In 2011, Indonesia has 423,000 hectare of sugar cane plantation which can produce 5,000 L/hectare/year; 1.5 million hectare of cassava plantation which can produce 4,500 L/hectare/year; 26 million tonnes of crude palm oil (all quantities are exported) and 800,000-900,000 tonnes/year of coconut oil which both of it can be converted into biodiesel. While second generation biomass is also abundant, 147 million tonnes of biomass is produced every year in Indonesia such as in Sumatera, Kalimantan, Java and Sulawesi islands. The biomass comes mainly from rice residues (65.6 million tonnes), sugar residues (23.6 million tonnes), rubber wood (41 million tonnes), and palm-oil residues (8.2 million tonnes). Smaller quantities are available from other agricultural waste such as logging residues, sawn-timber residues, coconut residues and other agricultural waste. Market potential for generating electricity and heat from biomass residues is estimated at some 1,160 MW for the whole of Indonesia (Sumatera 50.8%, Kalimantan 19.8%, Java 24.1% and Sulawesi 5.2%) [10][11].

As Indonesia lying at the equator, the potency of solar energy and wind power is also abundant. Solar power potential is ranging from 3.5-4.8 KWh/m2/day in all locations of Indonesia. Meanwhile, wind energy potential is mainly in the center and east region of Indonesia [12].


Energy planning studies conducted in the year 2003/2004 consists of four stages of the calculation is to develop a realistic scenario, the projections need (demand), power generation development plan, making the energy supply and demand balances based on the principle of market equilibrium . This study uses several assumptions such as GDP growth until 2025 is 6.51% (Table )[4].

In this study, economic growth is assumed around 6% per year in average. Oil prices assumed to be 25 U.S. $ / barrel at the beginning of the study and increased to $ 28 / barrel, the price of coal 24 U.S. $ / ton and increased to 27 U.S. $ / ton, the price of gas is 2.2 U.S. $ / MMBTU (FOB) with a corresponding increase oil prices and a discount rate of 10%. During its development, in 2005 the assumptions used in this study have undergone many changes, especially the assumptions about energy prices. In 2005, world oil prices by an average of 53 U.S. $ / barrel, fossil energy prices usually adjust the price of petroleum [4][9][12].

Projection of primary energy production and consumption against the projection on various the fossil fuel reserves can be seen in from Figure 2. The consumption projection growth based on the RIKEN scenario where in 2020 the oil consumption reach more than 6 million barrels and 6.16 million in 2025, where the reserve information was gathered from ministerial of energy and mineral [6]. The production of oil was assumed to be 10% decrease from 2015 onward. The gap between consumption and production at later years is assumed to be filled by importing oil from Middle East.

As seen in Figure 3, the current and prediction of natural gas production against its proven reserved. The production is assumed to increase exponentially between 2010 up to 2030 in line with the government plan on RIKEN scenario, which increase up to 146 BCM in 2025. The reserve of natural gas accounted of 2550 TCM in 1999 and of 3180 TCM in 2008 the proven reserve assumed to be unchanged through out the year. The prediction shows a shortage of supply on 2020 onward, without new reserve found the country will become net gas importer.

The assumption on predicting the coal consumption as seen in Figure based on the government plan to increase its coal based power plant in the next decades. The increases assumed to be exponentially growth from 40 MTOE in 2011 up to 250 MTOE in 2030. The assumption is also considering the use in industrial sectors such as steel and cement industry which assuming also has significant growth in the next two decades. The production however will follow the trend of its reserves (5500 MTOE in 2008). The production is predicted to reached its peak in 2018 with production around 292 MTOE and steadily decrease afterwards. Figure shows the predicted primary energy consumption in MTOE by sector as developed by GOI, this information were taken into account as assumption on the prediction of production against proven reserved.

National Energy Policy

Among of ASEAN countries, Indonesia has the lowest commercial energy consumption (<4 BOE/capita in 2010). The energy system has a high dependency on oil and the alternative energy has not been developed, in spite of having huge amount of alternative energy resources. The price of energy from renewable energy is still higher than fossil fuels. The use of energy in many sectors such as household, industry, and transportation is inefficient. Through new vision 25/25, Indonesia is expecting to increase the use of renewable energy up to 25% at 2025, which 5 times higher than current utilization (5%).

Blue-print of the National Energy Management made at the beginning of 2005 had always to be revised to accommodate changes in conditions of crude oil prices that ultimately affect the price of other fossil fuels. In early 2006, the National Energy Policy set forth in Presidential Regulation No. 5 of 2006 (Figure ), which in principle it emphasizes: (i) optimizing the use of energy mix (diversification); (ii) improve energy efficiency (conservation); (iii) use of new and renewable energy sources that are technically ready as well as economical and environmentally friendly, such as biofuels (biodiesel, bio-ethanol/gasohol, bio-oil and pure plant oil), synthetic fuels (liquid coal), geothermal, mini and micro hydro, nuclear, solar, wind / wind, hydrogen (fuel cell), energy from sea current and sea waves; (iv) increasing the fossil energy resource exploration (intensification); (v) promote the development and construction of energy infrastructure, both on upstream and downstream side; (vi ) paying attention to environmental problems, especially in Java, which has a population of about 945 people/km2; (vii) conduct researches development and application of science and technology in the sectors mentioned above, as well as involve the national industry in order to increase national capacity [4][9].


To be an excellent research university, Diponegoro University always supports research and developments throughout its faculties. Research on energy and environment are considered as one of the leading focuses in Diponegoro University as stated in research roadmap. The support is provided through competitive research grant by University to stimulate staffs and researchers in improving quality of their research. Other supports are provided by Indonesia governments through competitive research grants offered by Directorate General Higher Education, Ministry of National and Cultural, Ministry of Research and Technology, Ministry of Agriculture, as well as research collaboration with international institutes.

Some research on energy and environment at Diponegoro University can be described as follows :

Energy from Biomass

Research on biomass has been conducted by gasification and cracking processes. Another research is focusing on extracting biomass from microalgae, which can be used for feed and biodiesel.

Biodiesel and bioethanol have been intensively studied in Center of Biomass and Renewable Energy (C-BIORE) Diponegoro University, especially on the use of local source of vegetable oil (jatropha, nyamplung, cooking oil) and sugar cane.


Research on biogas is mainly focused on the use of cow manure and waste with high COD (palm oil waste, tofue, pharmaceutical) for biogas production. The current research at Department of Chemical Engineering is active in accelerating biogas production by using rumen.

Energy Conversion and Efficiency

This research is mainly done by Mechanical Engineering Department with activity of energy audit, efficient use of fuel and smart driving system.

Solar panel for convenience sitting ground

The electrical engineering department through research grant from Netherlands Government developed a sitting ground by using solar panel. This solar panel has capacity of 1000 W and utilize for ir conditioner and lightning.

Geothermal studies

The study of geothermal is mainly conducted by Physic Department and currently is supported by PERTAMINA to develop a Research group on Geothermal Studies.


Together with local government, Diponegoro University installed a microhydro for rural area at Central Java.

4. Conclusion; the potential contribution of the research to the country FUTURE energy demand and/OR supply

The research and development on renewable energy in Indonesia must be strengthened in order to achieve national energy policy of vision 25/25. This can be done through research partnership among Indonesian research institutes, governments and stake holders as well as international counter-partners. There are a lot of challenges in the area of energy efficiency, energy planning and energy economics which is not deeply studied in our institutes.

Currently, there is no direct implementation of research output to the country future energy demand, since the research is mainly focused on the technological side. However, Dipongeoro University researchers are actively invited by local government to give support and consultation on local energy planning by ministry of energy and mineral resources, as well as planning on reduction of green house gases.


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