Indonesia's energy consumption
Indonesia, the world's fourth most populated country, has a diverse energy consumption landscape influenced by its geography and demographics. As of 2016, Indonesia's energy production was heavily reliant on fossil fuels, with approximately 88% of its electricity generated from conventional sources like coal, natural gas, and oil. Specifically, coal accounted for nearly half of the electricity generation capacity, while natural gas and oil contributed significantly as well. The country boasts substantial reserves of coal and natural gas, positioning it as a major player in global energy markets; it was the largest exporter of coal by weight as of 2011 and remains a leading exporter of liquefied natural gas.
Electricity consumption is concentrated mainly in populous regions, particularly on the islands of Java, Sumatra, and Sulawesi. Here, residential and industrial sectors dominate energy use, with residential consumption making up 42% of the total in 2014. Despite its rich energy resources, Indonesia grapples with electricity shortages due to underinvestment in infrastructure. Additionally, the nation has potential in renewable energy sources, particularly geothermal, where it ranks third globally and has significant untapped capacity. Overall, Indonesia's energy landscape reflects the complexities of balancing resource abundance with infrastructural challenges.
Indonesia's energy consumption
Official Name: Republic of Indonesia.
Summary: As one of southeast Asia’s largest economies, Indonesia helps support the region through its exportation of energy resources, in particular as a major supplier of coal and natural gas.
Indonesia is the world’s fourth most populated country after China, India, and the United States, with approximately 261.12 million residents as of 2016, according to the World Bank. With nearly 18,000 islands covering an estimated 741,000 square miles, Indonesia is among the twenty largest countries in the world in terms of landmass. Indonesia also hosts the world’s third-largest rain forests (the largest being South America’s Amazon, followed by that of equatorial Africa). Indonesia is the world’s third most populous democracy (after India and the United States), the world’s largest archipelago, and home to the world’s largest Muslim population.
Geography of Indonesia’s Energy Production
With extensive and diverse natural resources, a large population, and a growing economy, the country relies on a rich geography of energy. To understand Indonesia’s energy production and energy consumption, it is critical to understand its unique geography. According to data for 2016 from the US International Trade Administration's Export.gov, Indonesia had 58.54 gigawatts of installed electricity-generating capacity. As of 2013, 88 percent of power production came from conventional fossil-fuel thermal sources (oil, natural gas, and coal), 8 percent from hydroelectric sources, 5 percent from geothermal, and less than 1 percent from other renewable energy sources.
To generate electricity, Indonesia relies primarily on coal. According to the US Energy Information Administration (EIA), Indonesia's electricity generation capacity in 2013 was 47 percent coal-based. In addition, gas produced 29 percent and oil 12 percent.
Coal
Based on the EIA’s 2013 estimates, Indonesia had 34.6 billion short tons of recoverable coal reserves. These were mostly located on Indonesia’s western island of Sumatra and in East an South Kalimantan.
In 2011 Indonesia surpassed Australia as the world's largest exporter of coal in terms of overall weight. By 2014 it was the lead exporter of thermal coal, though declines in global demand and prices in the 2010s resulted in a drop in production and revenues.
Natural Gas
Oil and Gas Journal posted Indonesia’s proven gas reserves at 103.4 trillion cubic feet as of 2015, making it the world’s thirteenth-largest holder, and second-largest holder throughout the Asia-Pacific region. Indonesia was the world’s fifth-largest exporter of liquefied natural gas (LNG) in 2014. The Indonesian government reports that more than 70 percent of the country’s natural gas reserves are located offshore, with the largest reserves found off Natuna Island (near the northwest coast of Kalimantan), East Kalimantan, South Sumatra, and West Papua.
Strategically placed near Indonesia’s natural gas reserves, Indonesia’s two major LNG production plants are Arun (located in North Sumatra) and Bontang (located in East Kalimantan). However, both of these plants have been experiencing declining production, and consequently several newer projects are being developed, such as the Tangguh LNG project in Western Papua. Operated by BP, Tangguh exported close to 330 billion cubic feet of LNG in 2010.
Regarding the transmission and distribution of Indonesia’s natural gas, the state-owned gas firm Perusahaan Gas Negara (PGN) operates more than 3,100 miles of natural gas lines. To improve the connectivity of Indonesia’s natural gas pipelines, the World Bank, the Asian Development Bank, and PGN are developing the Integrated Gas Transportation System to link the islands of Sumatra, Java, and Kalimantan via a 2,600-mile pipeline. These three islands (especially Java) are both consumers and producers of Indonesia’s natural gas. Indonesia also provides natural gas via pipelines to Singapore and Malaysia. Furthermore, Indonesia is involved in a Trans-ASEAN (Association of Southeast Asian Nations) Gas Pipeline that is expected to link major natural gas producers (such as Indonesia) and consumers throughout Southeast Asia. This concept was initially proposed in 1997 as part of ASEAN’s Vision 2020 initiative.
Hydropower and Geothermal Power
According to 2013 data from the EIA, Indonesia generated approximately 8 percent of the country’s total electric generation from hydropower sources. Hydroelectric facilities are spread throughout Indonesia, including the provinces of South Sulawesi, South Sumatra, and Riau, along with West and Central Java.
Indonesia over 1.3 gigawatts of electricity production capacity from geothermal sources in 2013, according to the IEA—significant enough to rank third in the world after the United States and the Philippines. The Indonesian government further estimates a potential supply of up to 29 gigawatts of generating capacity from geothermal resources, which could make Indonesia the world’s largest producer. Approximately half of this geothermal potential is located on the Indonesian islands of Java and Bali, both of which are heavily populated.
Petroleum
While oil produces a significant portion of Indonesia’s electricity output, most oil is used in the transportation sector, particularly as gasoline and diesel fuel. It is important to note that Indonesia was once a member of the Organization of Petroleum Exporting Countries (OPEC), and if still a member today, Indonesia would be the only nation from the Asia-Pacific region. However, Indonesia became a net importer of oil in 2004 and suspended its OPEC membership as of 2009.
This said, Indonesia’s two largest oil fields are Minas and Duri, which are on Sumatra’s eastern coast. Another significant oil field is the Cepu block, located in East and Central Java. ExxonMobil’s local subsidiary estimated that the Cepu block could hold up to 600 million barrels of recoverable oil reserves.
According to the EIA, as of 2014 Indonesia had slightly more than 1,055,000 barrels per day of refining capacity at eight facilities, with the largest refineries being Cilicap in Central Java (approximately 324,000 barrels per day), the Balikpapan facility of Kalimantan (approximately 242,000 barrels per day), and the Dumai/Sei Pakning refinery of Central Sumatra (approximately 158,000 barrels per day).
Energy Consumption
While Indonesia is an archipelago with nearly 18,000 islands, Indonesia’s energy consumption is mainly concentrated on the islands of Sumatra, Sulawesi, and especially Java, where approximately 70 percent of Indonesia’s population resides.
Indonesia’s electricity consumption is primarily in the residential and industrial sectors. According to 2014 statistics from the EIA, 42 percent of power consumption went to residential use, 33 percent to industrial, and 18 percent to commercial. Despite being a large exporter of coal and natural gas, Indonesia still faces electricity shortages due to underinvestment in new generating capacity.
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