Energy Supply Security of Indonesia

Indonesia's Energy Security and Supply Outlook

Overview

• Total Primary Energy Supply (TPES): Indonesia's TPES increased from 165 Mtoe in 2002 to 209 Mtoe in 2011, reflecting a 27% growth.
• Economic Growth: Rapidly growing economy and the fourth most populous country in the world drive the energy consumption rate at around 7% per year.
• National Energy Policy (NEP): Forecasted TPES to reach 400 Mtoe in 2025, 480 Mtoe in 2030, and 1,000 Mtoe in 2050.

Oil Sector

• Domestic Production: Crude oil production declined from 944 kb/d in 2007 to 824 kb/d in 2013.
• Imports: In 2013, oil imports were 990 kb/d, comprising 382 kb/d of crude oil and NGL, and 608 kb/d of refined products.
• Subsidies: The country maintains subsidies on gasoline, diesel, and kerosene.
• Refining Capacity: Ten refineries with a combined capacity of around 1.2 mb/d.
• Operational Stocks: Operational stocks amount to 21-23 days of consumption.
• Emergency Stocks: The government aims to create a national energy reserve system including Energy Buffer Reserves (EBR) for public emergency stocks. The plan is to hold 30 days of net imports, with operational stocks increased to 30 days of consumption.

Natural Gas Sector

• Production: In 2012, natural gas production was 76.7 billion cubic meters.
• Demand: Natural gas demand significantly increased from 35 bcm in 2002 to 39 bcm in 2012.
• Consumer Sector: The transformation/energy sector was the largest consumer in 2011, representing about 49% of total natural gas consumption.
• Gas Allocation: The Indonesian government introduced a priority allocation mechanism for DMO gas, prioritizing oil and gas production, fertilizer industry, power generation, and other industrial sectors.
• Infrastructure: Several LNG regasification terminals have been installed recently, including a floating storage and regasification unit (FSRU) in West Java and Lampung.
• Emergency Measures: Local gas shortages are managed through emergency measures such as pushing back lost production, allocating gas from other fields, and renting fuel power generators.

Electricity Sector

• Generation: Domestic electricity production totaled 188 TWh in 2013, a 40% increase from 2009.
• Demand Forecast: Electricity demand is forecast to increase to 287 TWh in 2018 and 386 TWh in 2022.
• Consumption: The residential sector was the largest consumer, accounting for 41% of total electricity consumption in 2013.
• Network: The transmission network is poorly connected, with PLN operating eight main electricity transmission network systems.
• Stocks: PLN sets an internal minimum requirement for operational reserves, including 7 days of refined products stocks for dual-fuel power generators and around 25 days of coal stocks for coal-fired power generators.
• Emergency Management: PLN is responsible for maintaining power system security, reliability, efficiency, and quality of electricity supply through emergency management resources and practices such as over/under frequency load shedding and restoration plans.

Conclusion

• Energy Mix: Oil remains the dominant energy source, followed by natural gas and coal.
• Challenges: Declining domestic oil production, rising natural gas demand, and poor transmission network connectivity pose challenges to energy security.
• Strategies: The government aims to enhance energy security through emergency stock management, infrastructure development, and efficient emergency response measures.