President Prabowo Subianto has stated his vision regarding the future\ndirection of Indonesia\u2019s energy sector development. On various\noccasions, Prabowo has frequently emphasised that Indonesia must achieve\nenergy self-sufficiency as soon as possible. The intended\nself-sufficiency covers not only fossil-based energy but also new and\nrenewable energy (EBT).<\/p>\n
Efforts to achieve energy self-sufficiency are certainly not an\nordinary idea; it is a grand vision. This is because, so far, the\ndiscourse regarding energy has focused more on energy security.<\/p>\n
The level of discourse regarding energy self-sufficiency clearly\n\u201cexceeds\u201d the discussion on energy security. Energy self-sufficiency\nmeans Indonesia must be able to meet domestic energy needs through its\nown production capabilities, without imports or purchasing energy from\nabroad. On the other asides, the development of our current energy\nsector shows that the import component is high and tends to increase\nevery year.<\/p>\n
Sources of Vulnerability in the National Energy Sector<\/p>\n
In the oil and gas sector, particularly oil (crude and fuel),\nIndonesia has been a net oil importer since 2004, with a trend of\nincreasing imports annually. The increase in oil imports is caused by\nthe declining domestic crude oil production, while on the other hand,\ndomestic oil and fuel consumption continues to rise alongside the\ngrowing population, number of vehicles, and increased business\nactivities.<\/p>\n
BPS statistical data shows that the growth of the oil and gas mining\nsector has tended to be negative (contracted) every year over the last\n15 years. While 20 years ago, domestic crude production reached more\nthan 1 million barrels per day (bpd), it is now below 700,000 barrels\nper day (bpd).<\/p>\n
This condition creates vulnerability for national energy security if\ngeopolitical conflicts involving oil-producing countries occur, such as\nthe current situation in the Middle East.<\/p>\n
Geopolitical conflicts involving oil-producing nations will\nundoubtedly disrupt the global oil supply, not only due to hindered\nproduction and distribution activities but also due to the expansion of\nprotectionist policies aimed at maintaining energy security in each\nsupplying nation.<\/p>\n
Recently, China announced it would halt its fuel exports. China is\nunique; it is one of the world\u2019s largest oil importers, yet it also\npossesses large-scale oil refineries capable of meeting domestic fuel\nneeds (self-sufficiency) and becoming an exporter of fuel and other\npetroleum products. Now, to maintain its domestic energy security, the\nChinese government has halted its fuel exports.<\/p>\n
In addition to supply disruptions, Indonesia also faces the risk of\nincreased State Expenditure in the form of rising fuel subsidies and\ncompensation burdens due to rising oil prices. Based on sensitivity\nanalysis in the 2027 Draft State Budget (RAPBN) Financial Note, it is\nstated that a US$1 per barrel increase in the realised Indonesian Crude\nPrice (ICP) above the 2027 APBN assumption will increase the budget\ndeficit by Rp8.5 trillion. This occurs because the impact of an ICP\nincrease on state expenditure is much larger than its impact on state\nrevenue.<\/p>\n
The global energy crisis is also a source of vulnerability for\nIndonesia\u2019s electricity sector. There are at least two sources of\nvulnerability faced by the electricity sector due to these external\nfluctuations.<\/p>\n
First, external fluctuations in the form of rising oil prices are\nusually followed by rising prices of other primary energy, especially\ncoal. Consequently, rising global coal prices will encourage coal\nproducers to export their production, potentially causing a coal supply\nshortage for domestic power generation.<\/p>\n
Second, instability in the energy sector (in the form of rising oil\nprices) is usually followed by volatility in the financial market in the\nform of a weakening of the currency (including the Rupiah) against the\nUS Dollar (USD). The weakening of the Rupiah leads to an increase in the\nBasic Cost of Electricity (BPP).<\/p>\n
This is because most components of the BPP are paid in USD, whereas\nthe electricity sales revenue received by PLN is in Rupiah. This\ncondition creates a mismatch that results in exchange rate losses, which\npotentially reduces PLN\u2019s financial capacity.<\/p>\n
Based on the author\u2019s calculations, between 2009 and 2024, PLN\nrecorded a net loss due to exchange rate differences of Rp86.43\ntrillion, which is equivalent to PLN\u2019s net profit over the last four\nyears. If these exchange rate losses continue, PLN\u2019s existence as a\ngovernment agent to achieve energy security or self-sufficiency will be\ndisrupted.<\/p>\n
Weakening Investment Performance in the Energy Sector<\/p>\n
To achieve energy self-sufficiency, or at least energy security,\nstrategic efforts are required; \u201cbusiness as usual\u201d is not enough. This\ninvolves massive resources and the involvement of stakeholders on a\nlarge scale.<\/p>\n
The resources required are primarily investment funding. Stakeholder\ninvolvement includes not only regulators and energy sector players but\nalso fiscal authorities, auditing authorities such as the Audit Board of\nIndonesia (BPK RI), Bank Indonesia (BI), and the Financial Services\nAuthority (OJK), financial institutions, and law enforcement agencies\n(APH).<\/p>\n
So far, energy issues are often viewed solely through the lens of\nsectoral regulatory responsibility, in this case, the Ministry\u2026<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/achieving-energy-resilience-and-self-sufficiency-1791186833", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }