Indonesia

Index rank 73

Balance Score

ACD

Energy Sustainability Index Rankings and Balance Score

 2011  2012  2013  Trend Score
Energy Performance  89  87  68   
Energy Security  39  37  17  A
Energy Equity  93  94  83  C
Environmental Sustainability  108  109  104  D
         
Contextual Performance  69  71  72   
Political Strength  88  92  95   
Societal Strength  74  82  82   
Economic Strength  50  41  42   
         
Overall Rank  83  85  73  ACD
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Fossil Fuel Reserves

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Key Metrics

Industrial sector (% of GDP) 46.5
TPEP / TPEC  (net energy exporter) 2.28
Emission intensity (kg CO2 per USD) 0.43
Energy affordability (USD per kWh) 0.06
GDP / capita (PPP, USD); GDP Group 4,669 (IV)
Energy intensity (million BTU per USD) 0.22
CO2 emissions (metric tons CO2 per capita) 1.76
Population Access to Electricity (%) 94.2
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Index Commentary

Indonesia moves up 12 places in this year’s Index and sees substantial improvements across all three energy dimensions. However, Indonesia faces the same challenges in balancing the competing sides of the energy trilemma as its peers in the ‘Highly-industrialised’ group of countries do, with the very strong energy security ranking offset by weaker energy equity and environmental sustainability performance. Energy security is robust, with a very favorable total energy production to consumption ratio, and a slowing energy consumption growth rate. Energy equity improves as gasoline and electricity become slightly more affordable, but is still low overall. Performance on the environmental sustainability dimension also lags quite a bit, as the country is extremely energy- and emission-intense, and emits large quantities of CO2 in generating electricity, which it does overwhelmingly by burning fossil fuels. Contextually, performance on indicators of political and societal strength is stable, but on the lower end of the spectrum – with the exception of education, which is quite good. Economic strength, buoyed by a strong macroeconomic stability, is Indonesia’s best contextual dimension.

Trends and Outlook

Fossil fuels remain the main energy source, and levels of development and deployment of efficient and low-carbon and carbon-free energy technologies is slower than expected to fulfill sustained energy demand growth, which remains positive under significant energy subsidies to support social and economic development.

Recent energy policy developments include: 1) energy policy targets of the Presidential Decree No. 5, 2006 on National Energy Policy and its Blueprint of National Energy Management 2005-2025. The targets include: reducing energy elasticity to less than 1, aligned with the target of economic growth; enhancing the national energy mix with oil below 20%, natural gas more than 30%, coal to more than 33%, and the remaining 17% from new and renewable energy; 2) the Ministerial Decree on feed-in-tariffs for renewable energy that gives more opportunity for development of small renewable energy with private participations. This will give remote islands the opportunity to accelerate access to electricity; and 3) preparations to issue a new national energy policy as the implementation of Energy Law No. 30, 2007.

Key issues policymakers need to continue to focus on include: 1) removing energy subsidies; 2) intensifying the efforts to increase the use of new and renewable energy through research and development, pilot projects, providing incentives, capacity building; 3) imbed low-carbon and carbon-free technologies in the long-term energy plan; 4) increase energy efficiency on supply and demand sides; and 5) attract more investments to the energy sector.