Indonesian Political, Business & Finance News

RI told not to develop atomic plant

RI told not to develop atomic plant

JAKARTA (JP): Indonesia will be facing an energy crisis in the
near future due to high economic growth, but it need not resort
to nuclear energy, as it is rich in other energy resources, an
energy analyst said yesterday.

"With economic growth running at seven percent, our energy
consumption will increase by 7.28 percent. But production growth
of primary energy is only at three percent," energy analyst Prof.
Dr. Soebroto told the press after a luncheon meeting held by PT
Redecon here yesterday.

He pointed out that a great deal of energy is needed to
accelerate high economic growth. The energy needed depends on the
elasticity of the energy consumption and the income of the
people.

Subroto quoted economist Dr. Hadi Soesastro of CSIS (Centre
for Strategic and International Studies) as saying in a seminar
last year that the current elasticity is 1.04. This means that
economic growth of one percentage point will increase energy
consumption by 1.04%.

Since annual economic growth is projected at 7% for the course
of the current longterm development program (25 years, starting
in April 1994) Indonesia's energy consumption will increase by
7.28 percent a year.

"As the production of primary energy is only about 3%, we'll
see a discrepancy of 4.28 percent," he noted.

Nonetheless, he added, Indonesia doesn't need to build a
nuclear power plant to meet the shortfall, referring to the
planned nuclear power plant in Central Java.

The director general of the National Atomic Energy (BATAN),
Djali Ahimsa, said Indonesia will need between seven and 12
nuclear reactors to help provide the 27,000 megawatts of
electricity energy needed by homes and industry in Java and Bali
in the foreseeable future.

But Subroto, a former minister of mines and energy and former
secretary general of OPEC (Organization of Petroleum Exporting
Countries), argued that nuclear plants are very costly.

"We have other energy resources that can be exploited to
generate enough electricity for our needs," said Subroto.

He said that Indonesia had 60 sedimentary basins -- 21 in the
western part and 39 in the eastern part -- that are believed to
contain petroleum and natural gas equivalent to 84.5 billion
barrels of oil -- 48.4 billion barrels of petroleum and 216.8
trillion feet cubic of natural gas.

Indonesia also has large coal deposits. Proven reserves are
estimated at 4.6 billion tons and measured reserves are estimated
to reach 36.6 billion.

Hydropower -- a renewable energy -- can generate some 75,000
Mega Watt (MW) of electricity.

Subroto noted that until now, Indonesia has only utilized some
3,245 MW or 4.3 percent of the hydropower potential.

"Our country also has other renewable energy sources, such as
geothermal power. All over Indonesia, this energy is estimated at
16,000 MW, 50 percent of which in Java," he noted.

Subroto added that Indonesia is only using 309 MW of its
geothermal potential to generate electricity. In comparison, the
Philippines uses 1,075 MW of its geothermal resources, while the
United States uses 2,928.5 MW.

He said that Indonesia only needs to attract investment for
exploration and exploitation of its energy reserves. "We should
create fertile conditions," he said.

"We should learn from non-OPEC countries, such as Britain,
Norway, Malaysia, Columbia, Argentina, or Brazil," he stated.

These countries, he noted, managed to increase their energy
production through the application of the latest technology,
better energy management and incentives for investors.

Competition to attract foreign investment for the exploitation
of energy is getting tougher. "Only countries with more
attractive incentives will attract badly-needed investment," he
said, adding that the government should create a win-win
situation in its energy policy.

He said that the government should review its concept of
production-sharing arrangements for foreign investors in the
hydrocarbon sector. (13)

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