Indonesia’s energy security hinges on EV-green energy approach, says ERIA. Switching to electrified vehicles (xEVs) will only improve Indonesia’s economy and energy security significantly if the move is combined with a shift to renewable energy, says a recent study by the Economic Research Institute for ASEAN and East Asia (ERIA).
ERIA researcher Alloysius Joko Purwanto told reporters on Sept. 18 that the aforementioned scenario was possible because the increased electricity output needed to power the vehicles would offset any carbon emission savings from reduced fuel consumption, since most power plants in Indonesia relied on fossil fuels to generate electricity.
“Without proper regulation, there is a possibility that electricity production will be based on dirty sources [of energy] like coal, as is happening in China and Germany,” Joko said at a press briefing on the ERIA study, which was published in August.
The “Study on Electric Vehicle Penetrations’ Influence on 3Es in ASEAN” has projected that the Indonesian economy would be 1.2 percent larger than the current economy by 2040, or around US$2.64 trillion. The projection assumes that all cars on the roads are electric and renewable energy contributes 28 percent to power generation in 2040 Indonesia.
According to the Energy and Mineral Resources (ESDM) Ministry, renewables presently contribute 15 percent to Indonesia’s installed electricity generation capacity.
“xEVs’ impact on GDP is slightly positive because suppression of net imports such as petroleum and investments (additional cost for conventional technology) in xEVs (and low-carbon power) stimulate the economy,” says the study.
In comparison, the 2040 economy would only be 0.5 percent larger than the 2019 economy if Indonesia adopted electric cars without enforcing the renewable energy targets stipulated in the General Planning for National Energy (RUEN).
“Electric vehicles can reduce our reliance on fossil fuels and reduce gasoline and diesel imports,” said Joko.
His statement echoes the energy ministry’s position.
The ministry’s renewable energies director, Harris, said that, like ERIA, the government expected the adoption of electric vehicles to help curb Indonesia’s growing oil imports, which posed a threat to energy security.
“At this time, around 43 percent of our national energy supply still relies on fossil fuels, and most of it goes to the transportation sector,” he told The Jakarta Post in a text message.
He added that solar energy was a lucrative choice for powering electric cars, since it was readily available anywhere in the country.
However, top ministry officials have expressed skepticism toward Indonesia’s ability to meet its own renewable energy target. The country has a 2025 target for a 23 percent renewable energy mix, yet ESDM Minister Ignasius Jonan expects the country to achieve a 20 percent energy mix by 2025.
The ministry’s records show that Indonesia imported 278.7 million barrels of oil in 2018, almost quadruple the 76.7 million barrels of oil it exported in the same year.
Imported oil is one of the largest contributors to the trade deficit, and reached $1.81 billion in January-August 2019 according to Statistics Indonesia (BPS).
Assuming that Indonesia adopts xEVs and switches to renewables, the ERIA study projects that Indonesia’s net energy imports will reach $7 billion by 2040.
The combined xEV-renewables move would result in lower net energy imports than if Indonesia adopted electric vehicles but did implement its renewable energy target, a scenario that would lead to a project $11 billion in net energy imports.
If Indonesia proceeded without any changes to present conditions, net energy imports would hit $30 billion by 2040.
In comparison, the study projects 2040 net energy imports of $4 billion for Malaysia, $52 billion for Thailand and $24 billion for Vietnam, if these countries fully adopted xEVs and met their renewable energy targets. Indonesia’s energy security hinges on EV-green energy approach, says ERIA (Norman Harsono, The Jakarta Post)