indonesia

f i g u r e 1
Indonesia’s primary energy consumption
Share of energy consumption
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Oil
Gas
Coal
Hydropower
Other
0%
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Year
s o u r c e : BP plc, “BP Statistical Review of World Energy 2015,” June 2015.
n o t e : These numbers refer to total consumption in the country; many Indonesian sources exclude gas
consumption at the country’s liquefaction facilities from “domestic” demand. Hence, these numbers may
differ from some Indonesian sources.
production and transportation costs in this populous and geographically diverse country.
Indonesia, however, remains an energy-poor country, despite being rich in hydrocarbons and a
major energy producer. The energy system has been built on exports rather than domestic supply,
and delivering adequate, affordable, and reliable energy to the local market has been a perennial
challenge: in 2014, per capita energy use in Indonesia was 0.7 tons of oil equivalent versus 1.8
in Thailand and 3.0 in Malaysia. 3 Although low energy consumption is natural for an emerging
economy, Indonesia’s energy woes have been complicated by two additional factors: (1) heavy
subsidies for oil products and electricity have grown to unsustainable levels in recent years, and
(2) a complex and unpredictable regulatory system has stifled investment. Together, these factors
have produced an energy crisis—a crisis in oil, in gas, and in electricity.
In responding to this energy crisis, Indonesia now risks causing an environmental calamity. In
April 2015 the government rolled out an ambitious power-generation plan to add 35,000 MW of
36
NBR
3 Energy consumption data is from BP plc, “BP Statistical Review of World Energy 2015.” Population data is from World Bank, World
Development Indicators Databank, http://databank.worldbank.org/data/reports.aspx?Code=SP.POP.TOTL&id=af3ce82b&report_
name=Popular_indicators&populartype=series&ispopular=y.
SPECIAL REPORT u DECEMBER 2015