Thank you for Subscribing to Energy Business Review Weekly Brief
Requirement of Non-renewable Energy Mobilities for Energy Transition in Indonesia
Energy Business Review | Friday, October 28, 2022
The government has created a roadmap to address various risks and problems associated with future climate change to demonstrate its commitment to achieving net zero emissions (NZE) by 2060.
FREMONT, CA: To show its commitment to reaching net zero emissions (NZE) by 2060, the Indonesian government has developed a plan to address numerous risks and issues that can be related to future climate change. To achieve the zero-emission goal, the government is putting into action five key principles: increasing the use of new renewable energy (NRE), lowering the consumption of fossil fuels, encouraging the use of electric vehicles in the transportation sector, increasing the use of electricity in homes and businesses, and utilising carbon capture and storage (CCS).
Stay ahead of the industry with exclusive feature stories on the top companies, expert insights and the latest news delivered straight to your inbox. Subscribe today.
The promise to attain net zero emissions is now insufficient because of the discrepancy between the 2025 plan and the existing position. In the 2025 plan published by the Ministry of Energy and Mineral Resources (Kementerian Energi dan Sumber Daya Mineral/ESDM), the new and renewable energy percentage was estimated at 23 per cent, while the actual utilisation rate was only at 12 per cent. Therefore, to be able to entirely give up fossil fuels or non-renewable energy sources, rigorous and thorough preparation is necessary. The existing rules and regulations governing new and renewable energy, or RUU EBT, which have not been able to develop a robust, complete legal basis and assurance, can be one of the causes.
The national energy policy is intended to act as a roadmap for national energy management to achieve energy independence and security as well as support sustainable national development. The 2025 road map is contained in the National Energy Policy (Kebijakan Energi Nasional/KEN), which was developed by the National Energy Council/Dewan Energi Nasional/DEN and authorised by the President as Government Regulation (Peraturan Pemerintah/PP) Number 79 of 2014 concerning National Energy Policy. The three points in the PP are the targets for NRE composition of 23 per cent in 2025 and 31 per cent in 2050, as well as the targets for annual electricity consumption per person of 2,500 kWh in 2025 and 7,000 kWh in 2050.
Only 8.8 gigawatts of Indonesia's 442 gigawatts of potential renewable energy were used in 2018. Satya Widya Yudha, a National Energy Council (DEN) member, stated that fossil energy in the form of natural gas and oil is still required for the optimisation of the NRE mix as a transitional fuel and as a supporting fuel for NRE plants. The technology sought in the transition phase is carbon capture and storage (CCS) technology, which can lower greenhouse gas emissions from operations requiring fossil fuels. This shows that geothermal, hydro, and wind technologies have advanced to the point that fossil energy will still play a part in the switch to NRE.
The use of NRE is not optimal because of intermittent or discontinuous energy integration. Solar power plant (PLTS) electricity also decreases or lowers as the amount of sunlight does. Similar to this, the issue of developing NRE is unanswered by the extensive use of geothermal or geothermal energy when the erratic water discharge hinders the water turbine from maximising the use of hydraulic power. Indonesia has a lot of geothermal potentials which, if used effectively, might allow it to produce electricity all day long because of its numerous volcanoes.
The drop in the cost of EBT power production and the dearth of fossil fuels that can be used at high rates will undoubtedly result in commercial opportunities on a local and international level. The electrical mix that includes NRE as the main source of energy supply needs to be supported, notably in the electricity industry, to attain a future with zero emissions. To shut down 118 coal-fired power plants, Indonesia is expected to require up to 37 billion US dollars, or around Rp 568 trillion. In actuality, 250,000 people are employed in the coal business, which still produces 60 per cent of Indonesia's power.
However, Indonesia's energy transition to NRE is generally extremely complex given that some regions still rely on local revenue from the oil and gas industry and state assets in the steam power plant (PLTU) market are quite significant. In comparison to Singapore, Malaysia, Thailand, and Singapore, Indonesian personnel are among the least qualified in Southeast Asia for the NRE sector. However, the energy transition still necessitates a continuous process and takes a variety of elements into account.
Furthermore, the announcement of the postponement of the carbon tax, enacted in 2021 in article 13 of Law No. 7/2021, which stipulates that the carbon tax takes effect on April 1, 2022, may be violated by this postponement. It demonstrates the government's lack of commitment to the energy transition. According to theory, the distribution of the proceeds from the coal carbon tax can support the advancement of NRE technology in Indonesia, allowing fossil fuel mobility to positively impact Indonesia's preparation for NRE. Although fossil fuel use and investment are still essential for Indonesia's energy transition, there hasn't been any significant work done to determine how to do so far.
More in News
The storage tank market is experiencing significant growth and innovation due to the growing demand for reliable, efficient storage solutions in various industries.
The global storage tank market is growing with increased demand for strong solutions across industries. This is mainly due to technological advancements, changes in industry requirements, and a growing focus on safety and sustainability.
The market for storage tanks is at a crossroads, with tremendous room for expansion and many creative alternatives. The demand for dependable and practical storage solutions will continue to drive the industry and change the storage infrastructure landscape as industries worldwide grow and change.
Market Growth and Drivers
The storage tank market, estimated to be worth USD 26 billion in 2023, is anticipated to expand at a compound annual growth rate (CAGR) of more than 5.1% from 2024 to 2032. The primary cause of this expansion is the increasing need for oil and gas storage, fueled by increased exploration efforts and production levels. By 2028, the demand for oil alone is predicted to rise by 6% to 105.7 million barrels per day.
Technological Innovations
The market benefits from introducing innovative materials and construction techniques that enhance storage tanks' durability and safety standards. Remote monitoring capabilities are becoming increasingly prevalent, allowing operators to manage and monitor storage tank facilities from a distance.
Challenges and Opportunities
The market for storage tanks is expected to grow. However, there are still obstacles to overcome, including high upfront costs and a changing regulatory environment with changing safety and environmental regulations. Notwithstanding, these obstacles also offer prospects for expansion and novelty as enterprises endeavor to manage the financial feasibility of ventures and conform to evolving statutes.
Industry Applications
The expansion of the oil and gas, food and beverage, and power industries drives the global storage tank market. The need for more efficient solutions, particularly in exploring shale gas and tight oil fields, prompts the demand for storage tanks. The growing focus on water conservation and wastewater treatment also contributes to the market expansionists.
Sustainability and Environmental Considerations
Sustainability is starting to matter in the storage tank business. Businesses are looking into eco-friendly materials and designs to reduce their carbon footprints, which are connected with storage solutions since there is a growing emphasis on minimizing environmental effects.
Future Outlook
The storage tank market is set to continue its growth trajectory with a strong emphasis on safety, compliance, and technological innovation. Integrating advanced materials, intelligent monitoring systems, and sustainable practices will likely shape the future of storage solutions, ensuring that they meet the ever-growing demands of various industries.
...Read more
The construction, maintenance, and operation of storage tanks create jobs and stimulate local economies.
Storage tanks play a crucial role in energy infrastructure, ensuring the efficient and reliable supply of energy resources such as crude oil, refined petroleum products, and natural gas liquids. They manage supply and demand to support economic stability and maintain and enhance global energy systems. Their multifaceted role in maintaining and improving energy systems identifies their importance for maintaining and strengthening global energy systems.
Storage tanks allow their release during peak consumption times, stabilizing supply and mitigating the risk of shortages. They are critical components in the refining and processing of hydrocarbons. In refineries, tanks store raw materials like crude oil before processing. Post-refinement, they hold finished products such as gasoline, diesel, and jet fuel. Intermediate storage is crucial for the smooth operation of refineries, allowing for the continuous and efficient processing of crude oil into various end products. The ability to store intermediate and final products ensures operational flexibility and efficiency.
The global trade of energy resources heavily relies on storage tanks. These tanks serve as temporary holding facilities for oil and gas at ports and terminals, facilitating the transfer of energy resources between production sites, transportation vessels, and distribution networks. Storage tanks at strategic locations, like pipeline hubs and shipping ports, enable the efficient movement of energy resources across regions and countries. The logistical support is vital for maintaining energy flow in international trade. Storage tanks' economic impact extends beyond energy stability.
Energy security is a significant concern for nations worldwide, and storage tanks are crucial in enhancing it. Many countries maintain strategic petroleum reserves, consisting of large storage tanks filled with crude oil, to safeguard against supply disruptions. The reserves can be tapped in emergencies, like geopolitical conflicts or natural disasters, ensuring a continuous energy supply. Storage tanks buffer against external shocks and contribute to national energy security and economic stability. Storage tanks are becoming increasingly important in the renewable energy sector. Tanks store biofuels produced from organic materials as an alternative to fossil fuels.
Large-scale energy storage solutions, like hydrogen storage tanks, are being developed to support integrating renewable energy into the grid. Modern storage tanks are designed with advanced technologies to minimize environmental impact and enhance safety. Double-walled tanks, leak detection systems, and secondary containment measures are implemented to prevent spills and contamination. Vapor recovery systems capture volatile organic compounds (VOCs) emissions, reducing air pollution. The innovations ensure that storage tanks operate safely and sustainably, protecting the environment and surrounding communities.
Industries reliant on a stable energy supply, like manufacturing and transportation, benefit directly from the reliable performance of storage tanks. Storage tanks are indispensable to the energy infrastructure, providing critical support for energy storage, supply management, refining, trade, and security. Their role in integrating renewable energy and maintaining environmental safety underscores their importance in the evolving energy landscape. The significance of storage tanks in ensuring a stable, efficient, and secure energy supply becomes ever more apparent. Investing in advanced storage solutions will sustain and enhance energy systems worldwide.
...Read more
The tanks enhance energy system flexibility and reliability and contribute to the transition to a resilient energy future.
Thermal storage tanks are essential to global energy systems, addressing the imbalance between energy supply and demand. They store surplus thermal energy at low demand or times of high renewable energy generation, which would otherwise go to waste and not be used efficiently to tackle the issue of intermittency. They can be primarily used in conjunction with concentrated solar power plants.
Solar radiation is intermittent, varying throughout the day, and affected by weather conditions. Thermal storage tanks enable CSP plants to store excess heat generated during high solar irradiance periods and utilize it later to generate electricity during periods of low or no sunlight, providing a more reliable and dispatchable renewable energy source. Thermal storage tanks can enhance the efficiency of conventional power plants by enabling them to operate more flexibly. Another promising application of thermal storage tanks is the electrification of heating and cooling systems.
Thermal storage tanks can be integrated into district heating and cooling systems, where they store excess heat or cold generated by combined heat and power (CHP) plants, industrial processes, or waste heat recovery systems. During periods of low demand, such as at night or in mild weather, excess thermal energy can be stored in these tanks and later used to meet peak demand or provide heating or cooling when the primary energy source is unavailable or insufficient. These plants can operate at their optimal efficiency levels for longer durations, reducing fuel consumption and emissions.
Thermal storage tanks offer a versatile and efficient solution to the energy sector's challenges, including integrating renewable energy sources, electrifying heating and cooling systems, and optimizing conventional power plants. In conventional power plants, such as those fueled by natural gas or coal, ramping up and down to match fluctuating demand can be inefficient and costly. As countries strive to decarbonize their energy sectors, there is increasing interest in electrifying heating and cooling processes currently reliant on fossil fuels. The intermittency of renewable electricity sources poses a challenge for reliably meeting heating and cooling demand.
Thermal storage tanks can store excess electricity and use it to provide heating or cooling when needed, increasing the efficiency and reliability of electrified heating and cooling systems. In addition to improving energy system efficiency and reliability, thermal storage tanks can provide grid services such as peak shaving, load leveling, and frequency regulation. By strategically discharging stored thermal energy during periods of peak demand or grid instability, these tanks can alleviate stress on the grid and help integrate higher levels of renewable energy.
...Read more
The energy sector has always relied on conventional business models where utility companies generate, distribute, and sell electricity to consumers. However, the rise of renewable energy sources, smart grid technologies, and consumer demand for sustainability have initiated a paradigm shift. Among the innovative solutions reshaping this landscape is Energy as a Service (EaaS), an emerging business model transforming how energy is delivered, consumed, and managed.
EaaS is remodeling the energy sector by offering comprehensive solutions beyond traditional utility models. At its core, EaaS encompasses several key components. Energy supply management allows providers to source energy from various channels, including renewable sources such as solar, wind, and biomass, enabling clients to procure green energy without direct investments in infrastructure. Energy efficiency and optimization initiatives include real-time energy monitoring, audits, and advanced efficiency technologies that minimize waste while maximizing output. Demand response services help organizations manage peak loads through energy storage systems and smart grid integration, ensuring a dynamic balance between supply and consumption. Sustainability consulting supports businesses in meeting regulatory requirements and consumer expectations by providing expertise in carbon neutrality strategies, clean energy utilization, and sustainability reporting. Additionally, financing and risk management eliminate upfront capital expenditures, as EaaS providers invest in necessary infrastructure and charge customers based on results or service levels, mitigating financial risk.
EaaS fundamentally transforms the utility business model by driving decentralization, enhancing customer-centric services, integrating smart technologies, promoting renewable energy adoption, and diversifying revenue streams. Unlike traditional centralized energy production and distribution, EaaS leverages distributed energy resources (DERs) such as rooftop solar panels, microgrids, and battery storage to reduce reliance on large-scale infrastructure. This decentralization allows for localized energy generation and greater resilience. Utility companies are also shifting from being mere energy suppliers to service providers, offering tailored energy management solutions to meet diverse client needs. Integrating smart technologies—including IoT devices, AI-driven analytics, and predictive maintenance tools—enhances operational efficiency, reduces costs, and optimizes energy consumption. Moreover, EaaS accelerates renewable energy adoption by enabling businesses and households to access green energy without significant capital expenditures, fostering a more sustainable energy landscape. Lastly, it facilitates revenue diversification for utility providers, moving beyond traditional energy sales toward stable income sources through subscriptions, service fees, and performance-based contracts. Through these advancements, EaaS redefines how energy is produced, managed, and consumed in the modern era.
As digitalization and decentralization continue to reshape the energy sector, the prospects for EaaS are bright. Policymakers are increasingly pushing for renewable energy adoption and efficiency, creating fertile ground for EaaS providers to expand their offerings. Moreover, the rise of EVs and energy storage technologies will drive demand for integrated energy services.
EaaS represents a groundbreaking departure from traditional utility business models. By focusing on tailored energy solutions, supporting sustainability goals, and leveraging technological advancements, EaaS offers providers and customers new ways to thrive in the evolving energy ecosystem. While challenges remain, the potential to create a more efficient, decentralized, and greener energy future makes EaaS a compelling model for future generations.
...Read more
