How Should Indonesia Manage Their Transition to Cleaner Energy Consumption? Reflecting Back

The threat of fossil energy scarcity due to massive usage over the last few years and the harm of fossil energy to the environment has prompted countries to consider energy transition to their alternative energy (cleaner and renewable energy), to keep the balance of their environment system. Including Indonesia, where 60% of their energy consumption since 2000 lean on the fossil energy, especially in oil energy. Indonesia’s oil consumption has been higher than its consumption since 2004, which cause Indonesia’s to import tons of barrel of oil every year. The crisis of Indonesia’s energy consumption rises when in 2008, global oil prices increase rapidly which shaken most of the world’s energy and economic system.

To handle the crisis, Indonesia since 2007 has successfully executed an energy transition program, named “Conversion Program from Kerosene to LPG (Liquefied Petroleum Gas)” which targeted household and small business consumption. The program has managed to increase the LPG consumption and reduce energy subsidies by 197 million rupiahs by 2012. This program is highlighted since Indonesia has not yet considered being successful in executing similar programs, which is the conversion program from petrol to gas fuel for road transportation.

In the future, Indonesia will be facing lot more transition program, to the cleaner and renewable energy, as can be seen on Indonesia energy mix. This indicates the needs to evaluate the successful and the unsuccessful system of the implemented energy transition program in Indonesia.

SEMS aim to explore the government policy structure which believed has a strong role to support or block people adoption on the conversion program of kerosene to LPG. Using System Dynamic Modelling, researchers propose to design a model which describe the system of conversion program and analyze the interactions among variables within the system of the successful conversion program. Furthermore, the analysis of the research also comparing government policy structure between the successful and the unsuccessful program.

The simulation of system dynamic shows that from the sets of policy intervention on the conversion program kerosene to LPG, kerosene supply withdrawal and the government push to increase production capacity of supporting equipment has a huge influence to support the energy transition program. From the comparison between the successful and the unsuccessful conversion program in Indonesia, researchers can indicate some differences. However, the most importance policy intervention in conversion program of kerosene to LPG, kerosene withdrawal and government push to increase production capacity of supporting equipment, has not yet implemented in conversion program from petrol to gas fuel to for road transportation.

This research is conducted by Theresa Devina and Akhmad Hidayatno