RI needs over $505b for energy development
RI needs over $505b for energy development
JAKARTA (JP): Indonesia's energy sector needs at least US$505
billion in new investment during the current 25-year development
program, which ends in 2019, to meet increasing demand for
energy, an official said.
Secretary-General of the Ministry of Mines and Energy Umar
Said told a seminar organized by French alumni yesterday that
approximately $480 billion is required in the electricity sector
alone.
He said Indonesia needs at least $240 billion to build power
plants with a total generation capacity of 160 gigawatts and a
further $240 billion to construct electricity transmission and
distribution networks before 2019.
"That national electricity system will create a really
competitive market. The private sector and state-owned
electricity firm PT PLN will compete, in real terms, in that
market," Umar said.
He said the government will no longer be able to provide
sufficient funds for electricity investment, but will act as a
market regulator to ensure a level playing field.
As most future electricity plants will be coal powered,
Indonesia must build new infrastructure to transport
approximately 170 million tons of coal per annum from coal mines
to power plants. Such facilities include railway lines,
locomotives, train cars, conveyors and ports.
Although Indonesia's energy consumption is slowly shifting
from oil to gas and coal, the oil industry will remain important
because many existing industries and consumers still rely on oil-
generated energy.
Oil currently fulfills 65 percent of Indonesia's energy needs.
A further 21 percent is provided by gas, 7.5 percent by coal and
4.7 percent by other sources. By 2019, only 15 percent of the
total energy consumed in Indonesia will come from oil.
The per capita consumption of energy is predicted to increase
from the current level of 2.6 barrels of oil equivalent to 12.3
barrels in that time.
Umar projected that during that period the output of
Indonesia's crude oil will decrease from the current 558 million
barrels per annum to 495 million barrels.
To meet continuing demand for oil-generated energy, Indonesia
needs $15 billion to build at least five oil refineries, each
with a processing capacity of 125 barrels of crude oil per day.
A further $10 billion is required for oil-related
infrastructures such as ports, tankers and oil depots as well as
distribution pipelines, networks and outlets.
"Some of that investment cost can be avoided by using a free
trade system, that is importing some of our energy needs from
foreign sources. However, we still need to build related
infrastructures here, such as distribution networks," Umar said.
He said Indonesia's current challenge is to diversify its
energy sources to meet increasing demand for energy, which is
anticipated to reach 3.2 billion barrels of crude oil by the year
2019.
Indonesia must also equip itself with advanced energy
technology, eliminate energy subsidies, create a competitive
energy market and diversify the ownership of energy projects, he
said. (rid)