Enabling Energy Efficiency in Indonesia
Bagus Mudiantoro March 19, 2013
Contents
ADB Program in Indonesia
ADB’s Clean Energy Program
Potential for EE in Indonesia
ADB’s EE Program in Indonesia
ADB’s Program
in Indonesia
1. Inclusive Growth
• Infrastructure and connectivity enhancement
• Human resources development: Improved vocational education for higher productivity and wages
• Financial sector development: long-term finance, access to finance for SMEs and in emerging areas
• Decentralized public management
ADB Indonesia Country Strategy
Pillar 1
2. Environmental sustainability with climate change mitigation and
adaptation
• Renewable energy & energy efficiency
• Improved water supply & sanitation
• Natural resources management
• Environmental safeguards in all operations
ADB Indonesia Country Strategy
Pillar 2
ADB has invested over $27 billion since 1966
Largest shares in cumulative lending:
Public sector management (19%)
Agriculture and natural resources (15%)
Finance (14%)
Energy (13%)
In 2012, $1.2 billion in lending operations
ADB Operations
in Indonesia
ADB’s
Clean Energy Program
1. Promoting Energy Efficiency (EE) and Renewable Energy (RE)
• Develop renewable energy projects
• Improve EE from both the Demand Side and Supply Side
• Identify EE options and prepare financial assistance and guarantee
ADB’s Policy in the Energy Sector
(1)
2. Maximizing Access to Energy for All
• Sustainable rural electrification
• Focus on remote communities
• Encourage cleaner technologies
• Support the financing of natural gas- based power plant
• Support installation of modern
transmission and distribution system
ADB’s Policy in the Energy Sector
(2)
3. Promoting Energy Sector Reforms
• Assist the establishing competitive electricity market
• Encourage the adoption of tariff structures that promote energy
conservation and penalize peak hour and peak season consumption
• Capacity development in the Energy Sector
ADB’s Policy in the Energy Sector
(3)
EE Market in Indonesia
Historically, demand side energy efficiency projects in Indonesia have not been successful because of
low tariffs and low tariff of awareness
• Residential and commercial buildings offer large opportunities for EE measures
• Sector’s total energy consumption is 60% of total electricity usage
• Industrial sector has huge demand for EE
• Some private companies have undertaken EE measures
• Public Private Partnership (PPP) on EE is possible through energy service companies (ESCO)
EE in Indonesia
1 Indonesia Energy Sector Assessment Worldbank
The potential for EE improvements remains significant, such that about 181,180 GWh of electricity consumption could be saved by 2025.
ADB’s
EE Program in Indonesia
1. CTF - Global Climate Partnership
Fund Indonesia Investment Program 2. Exim Bank/ADB EE Program
3. Retrofitting municipal street and substation lamps
ADB’s EE Program
in Indonesia
The CTF Investment Plan prioritizes investments that:
• Improve EE, especially in heavy industries including cogeneration and cleaner production
• Improve EE in existing and new commercial and residential buildings
• Support the reduction of GHG emissions in developing countries through RE and EE investments
• Establish FI business lines through aggregators of private sector EE and RE investments
1. CTF - Global Climate
Partnership Fund Indonesia Investment Program
USD $50 million investment allocation from the Clean Technology Fund (CTF) to support
financial sector investments in EE and RE (ADB-GOI co-investment)
• Eximbank to promote the financing of EEPs, as one of its lending products in Indonesia, by providing:
• EE Financing Products
• Capacity Building
• ADB is providing $30 million loan to Eximbank for EE Lending, and $0.8 million for consultations
2. Exim Bank/ADB
Energy Efficiency Program
• Develop pilot for energy efficient street lighting management
• Implement the street lighting
management system (limited area in Medium-Big Cities in Java)
• Evaluate the piloting of energy efficient street lighting
• Develop pilot project for Street Lighting Management for two cities in Java
3. Retrofitting municipal
street and substation lamps
• Lack of available financing schemes from banks
• Lack of qualified energy auditors and/or ESCO
• Lack of success stories in Indonesia
• Low electricity tariff
Barriers to EE
in Indonesia
• Develop policy frameworks for EE,
particularly for the government agency
• Encourage private banks to finance EE programs
Enabling EE in Indonesia
www.adb.org
Thank You
www.adb.org
