The domestic energy supply has failed to meet demand. In fact, Indonesia is facing a crisis as the gap between supply and demand has widened.
Indonesia, a former member of the Organization of Petroleum Exporting Countries (OPEC), is facing the fact that oil will run out in 12 years, as will the gas reserve claimed to be one of the largest in the world. It will run out in 33 years unless new sources are found. Meanwhile, coal will relatively survive longer as it will run out in 82 years.
Indonesia has been a net oil importer since 2004. The country also imports 5 million tons of gas per year or two-thirds of the national LPG demand. The country is predicted to import liquefied national gas (LNG) in 2019.
The widening gap between energy supply and demand is because of the high economic growth, while oil and gas reserves are declining. Even if there are oil and gas reserves, they are located in spots that are hard to reach and the infrastructure is not feasible. With the global oil price of US$55 per barrel, exploration for new oil reserves in hard terrain is becoming less attractive to investors.
Such situation has raised questions regarding national energy sovereignty and resilience. The alternative to fossil energy is new energy and renewable energy (EBT), from geothermal energy, solar energy, hydro energy, wind energy, waste energy and nuclear energy.
Indonesia has targeted to see the use of new energy reach 23 percent of the total energy supply in 2025 and 25 percent for electricity generation. Some measures have been taken by the government and state-owned companies to meet that target. Today, for example, there are 62 private companies that have signed an agreement with state electricity company PLN to develop power plants using new energy and renewable energy.
In practice, not all of them run as expected. There are renewable energy powered power plants that have failed. There are regions that see oversupply because the local administration cannot create power demand through industrial growth in their respective territory. The negotiation over the prices of the electricity produced by the private company between the producer and the PLN is also a concern. Another concern is the ever-changing regulation with the revision is claimed to ease investment.
Energy is a crucial prerequisite for economic growth, even distribution of development and fulfilling of justice for the people. On the other side, many parties have personal or group interests in the energy industry that hamper the efforts to expedite the fulfilling of energy demand. This is the hardest challenge in energy sovereignty and we hope the regulator can handle it.