This content is from: Local Insights

Indonesia: New energy plan issued

In early March of this year, Indonesia's president, Joko Widodo, issued a new regulation laying out his administration's view of the nation's long-term energy policies and priorities. The plan's detail was formulated by the National Energy Board, and was adopted in the prevailing regulation signed by Mr Widodo.

The plan sets out policies regarding energy supply and resource production, and clarifies priorities in energy utilisation and transportation.

The plan calls for a gradual reduction in oil imports, with the goal of eliminating all imports by 2025. This is to be achieved by increasing the production capacities of the nation's oil refineries to more than two million barrels per day by 2025, reducing exports and prioritising domestic users, and optimising oil production.

In terms of natural gas, the plan envisions, among other things, a production volume of not less than 6,700 million cubic feet per day by 2025, ending all exports by 2036, and increasing the natural gas reserves recovery ratio to 100% by 2025.

With respect to coal, production is to be increased to 400 million tons in 2019, coal exports are to be eliminated by 2046, and clean-coal technology is to be utilised. The plan seeks to increase coal use to 55.2 million tons by 2025 and to 115 million tons by 2050.

On renewable energy sources, the plan seeks to establish a new government-authorised entity that will develop, utilise, and purchase energy generated from these sources. The plan also pledges support for a power generation system based on renewable energy sources.

Finally, the plan calls for the construction of 632 natural-gas fuel stations by 2025 and 2,888 stations by 2050; fiscal incentives for manufacturers of electric vehicles (2,200 units of four-wheeled vehicles and 2.1 million units of two-wheeled vehicles targeted to be manufactured by 2025); and, the development of public transit (light-rail and tram systems) in 13 cities.

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