Greetings from Rio as power crisis looms

The Jakarta Post, Jakarta

For Indonesia there is perhaps no better example of the urgency of sustainable development than the energy sector.

The country is on the brink of a power crisis 10 years after it promised energy sustainability as part of the 1992 Rio declaration.

"The fact is that it (conservation) hasn't work," said Achmad Safruddin of the Indonesian Forum for the Environment Forum (Wahli) and the chairman of a government-sponsored team to phase out the use of leaded fuel.

Over the past decade Indonesia's economy has gone from boom to bust, but energy consumption here has more than doubled during this period. Energy consumption has been growing by 8 percent to 10 percent per year.

Indonesia pledged to promote energy efficiency when it took part in the 1992 Earth Summit in Rio de Janeiro, Brazil.

Under the Rio declaration, the government is committed to implementing the principles of sustainable development.

A second summit will take place in Johannesburg, South Africa, from late August to September. Preliminary meetings for the summit are underway in Bali until next month.

As host for the final round of pre-summit talks, Indonesia's own progress toward sustainable development in the energy sector has been minimal.

The country now faces a power crisis even as its laggard economy is muting demand for energy.

State electricity company PT PLN has warned that power demand may outstrip supply next year. By then peak demand will likely hit 15,441 megawatts (MW), compared to a capacity of 15,285 MW.

A widespread power shortage would stall the already frail recovery of the economy, hurting the manufacturing sector and employment here.

The immediate government response has been to call for increases in power generating capacity across the country.

This would call for extra funds of some US$28.45 billion over the next 10 years, according to government data.

A tight state budget means that most of the investment in new power plants will have to come from private funds.

But Indonesia's battered power sector is a disincentive and efforts to restructure it advance too slow for new power plants to come onstream, analysts have said.

The outlook in the oil sector is less gloomy, but consumption is more wasteful.

Fuel oil has long been a favorite energy source, and Indonesians were pampered with three decades of generous subsidies on fuel oil.

Transportation is the biggest culprit, making up an average of 50 percent of the country's total fuel consumption. Industries and PLN follow with about 20 percent and 10 percent respectively of the country's total fuel consumption.

The Indonesian Consumers Foundation (YLKI) warned that if fuel consumption continues at the current rate, Indonesia will be out of oil in 20 years.

Recent oil discoveries and new oil recovery techniques, however, likely would push that date back several years.

Still, government data shows that for every $1 million in goods and services produced, Indonesia consumes on average 48 percent more energy compared to developed countries.

"We are now trying to take on energy conservation efforts from the supply and demand side," said Luluk Sumiarso, the director general for electricity and energy development at the Ministry of Energy and Mineral Resources.

On the supply side, he said, renewable energy like wind, solar and geothermal have priority in the construction of power plants.

Saving opportunities are high on the demand side as well. Indonesians use some 200 million light bulbs a year that consume five times the amount of energy that fluorescent lights require.

Luluk said a government-sponsored program encouraged people in the lower income brackets to use fluorescent lamps by offering them the chance to pay for the more expensive lamps on installment.

But where the energy conservation campaign fails to cut back national fuel oil consumption, higher prices must do.

The government plans to stop subsidizing fuel oil by 2004 and prices now hover at 75 percent of market levels.

With fuel oil becoming more expensive, more industries have switched over to alternative sources of energy, with natural gas being in demand.

Wahli's Achmad said this development was still a long way from the principles set out under the Rio declaration.

"Indonesia has fallen short of the Rio declaration three times," he said, referring to a lack of progress in energy conservation, diversification and the use of cleaner energy sources.

Principle eight of the declaration stipulates that countries should eliminate unsustainable patterns of production and consumption.

To put an end to Indonesians' habit of wasting energy, the government employs a staff of three people with no budget.

The failure to come out in full support of the Rio declaration has landed the energy sector in its current predicament, Achmad said.

He noted that Indonesia's 20-year-old national energy policy had the tools to tackle these issues, but were useless without regulations.

"The energy policy as a concept will never be of any good unless the government can enforce it to the public," he said.

Blocking the move from theory to practice are a multitude of interest groups within and outside the government.

"People who sell energy want demand to rise ... and conservation cuts demand," Achmad said.

The government may be facing another test of wills as it gears up for two weeks of talks in Bali on sustainable development.