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Indonesia Natural Gas Key to Greater Energy Access and Sustainability – Andalas Energy & Power (ADL)
Renewable energy is important, but natural gas is key to improving access to energy and more sustainable fuel resources. There is little doubt that natural gas can help improve access to electricity around the globe.
There have been many compelling cases that demonstrate the importance of natural gas in enabling sustainable energy policies in the future, especially in the United States.
It is believed that the fuel will solve grand global energy challenges. Electricity generated from natural gas-fired power plants can help the world meet strong growth in energy demand and civilizational expansion, as well as enable the replacement of older and less environmentally friendly power-generation technology.
Energy sustainability for a nation relies on access, affordability and environmental responsibility. These three pillars are all equally important and cannot be separated from one another. As noted, energy security challenges begin with access.
Experts say the global energy challenge for the next 50 years is finding ways to meet the needs of an estimated 2 billion people in areas with poor energy access.
The International Energy Agency estimates that about 80 percent of the world’s energy supply until 2050 will consist of fossil fuels.
Through the deployment of advanced natural gas combined-cycle technologies, not only can the cost profile for power generation be improved, but also efficiency and its environmental footprint.
Natural gas has led to significant growth in new electricity generation capacity in the United States, as it provides the most effective way to achieve comprehensive energy sustainability today, as well as in the future.
Indonesia is one of the world’s biggest liquefied natural gas exporters, along with Qatar, Australia and Malaysia.
Natural gas produced by Indonesia is consumed in Japan, South Korea, Britain and several countries in southern Europe.
Indonesia has enormous natural gas reserves. According to the BP Statistical Review, the archipelago had 103.3 trillion cubic feet of natural gas, or the equivalent to 1.6 percent of the total world’s reserves, in 2014.
The government has stated clearly that more gas should be allocated to the domestic market, because compared with diesel, gas is cheaper and cleaner when used for power generation.
That means the state can save trillions of rupiah from such conversion. From an environmental point of view, gas offers several competitive advantages, as it is generally odorless, nontoxic and non-corrosive.
President Joko “Jokowi” Widodo’s administration has set a target to develop 35,000 megawatts of new power generation capacity in five years to support the government’s target of 7 percent economic growth by 2019.
Of this figure, as much as 13,400 MW will be generated by natural gas-fired power plants, local media previously reported. State utility company Perusahaan Listrik Negara (PLN) has estimated that the nation would require about 1,250 billion British thermal units per day of natural gas to meet the 35,000 MW target.
However, despite its vast natural gas resources and this being one of its key exports, Indonesia’s gas production has started to dwindle.
In a report published by General Electric titled “The Age of Gas,” the American diversified conglomerate suggested that the Indonesian government pays more attention to the sector.
The report stated that a failure by utility companies in any specific country to make additional investment in power sources would put pressure on governments and populations.
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State firms told to triple investment to help stoke growth
by Viriya P. Singgih, Jakarta Post
State-owned companies are expected to triple their investment value in the next two years to reach Rp 895 trillion (US$68.02 billion) in 2018 in support of President Joko “Jokowi” Widodo’s 6 percent economic growth target.
State-Owned Enterprises (SOE) Minister Rini M. Soemarno said the President had urged all state firms to gradually increase their investment value from Rp 285 trillion this year to Rp 450 trillion in 2017 and Rp 895 trillion in 2018.
“It is part of the president’s plan to see 6 percent economic growth by 2018,” Rini said on Thursday, adding that most of the state firms’ investments would be related to infrastructure projects, including toll roads, public houses and electric power houses.
In meeting the target, the government has stressed once again the importance of establishing state-owned holding companies. It has planned to form six holding companies for the oil and gas, mining, food, banking and financial services, and construction and public housing sectors, with the aim of boosting their value, debt leverage and efficiency.
Therefore, those holding companies are expected to be financially independent and even give significant contributions to the state budget so that the government can expedite national development further.
Indonesia will need Rp 5.5 quadrillion for its infrastructure projects from 2014 to 2019, of which 19 percent is expected to be funded by state firms, 40 percent by the state budget, 10 percent by the regional state budget and the remaining 31 percent by the private sector, according to data from the National Development Planning Agency (Bappenas).
The infrastructure projects that will be done in the government’s priority include 2,6000 kilometers of new roads, 49 new dams and 35,000 megawatts (MW) of power plant procurement during President Jokowi’s tenure.
State electricity firm PLN, which is crucial to Jokowi’s electricity supply target, has even planned an 80,000 MW electricity procurement program until 2025, as it calculates electricity supply outside Java will grow exponentially.
“It is in accordance with the spirit of the Nawacita [nine goals] program under President Jokowi’s administration that aims to decentralize national development,” PLN corporate planning director Nicke Widyawati said.
Moreover, Maritime Affairs and Fisheries Minister Susi Pudjiastuti said the country needed to boost the development of infrastructure needed for sea toll roads, including cold storages, so that it could pave the way for integrated logistics services in the future.
She claimed that Russian company Blackspace planned to invest $200 million for the development of 12 to 15 cold storages across the country, while the Indonesian government would inject Rp 1.5 trillion for the project.
Meanwhile, Jokowi has also recently launched the One Fuel Price policy, which aims to make the price of fuel the same in all regions across the country, including Papua and Kalimantan.
The new policy, which is expected to run effectively by year-end, will force state-run oil and gas firm Pertamina to allocate Rp 800 billion in subsidies every year.
“That’s why state firms need to maintain their positive performance, because sometimes they have to make sacrifices in the interest of the people,” Rini said.
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