Energy Policies Beyond IEA Countries: Indonesia 2015
Indonesia can claim many economic and political achievements over the last 15 years:
the country posted consistently high economic growth rates, joined the G20, stabilised
its young democracy, and devolved budgetary power and decision making. Extending this
track record further depends on Indonesia’s ability to deliver sustainable and sufficient
energy supply to markets and ultimately to consumers.
Even though it remains a net energy exporter due to the expansion of its coal and
liquid biofuel production, the country is consuming more energy as a result of rising
living standards, population growth and rapid urbanisation. Indonesia is already highly
dependent on oil imports. Meeting demand growth and ensuring the environmental sustainability
of energy supplies must remain key pillars of its economic and investment policies
and strategies.
Indonesia has implemented important changes since the IEA published its first review
of the country’s energy polices in 2008. Key milestones include the 2007 Law on Energy,
the 2008 National Energy Policy, the 2009 Law on Electricity, and the 2009 Law on
Mineral and Coal Mining. However, the government needs to continue this reform process
vigorously and implement further improvements to Indonesia’s institutional set-up,
alongside stronger policy planning and implementation, more investment in critical
energy infrastructure, and continued movement towards regulated energy markets and
cost-reflective pricing.
This review analyses the energy policy challenges facing Indonesia and provides critiques
and recommendations for further policy improvements. It is intended to help guide
the country towards a more secure and sustainable energy future.
Published on February 17, 2015
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