Indonesia听must move to meet demand growth and ensure the environmental sustainability of its energy supplies, the International Energy Agency,听IEA,听said on Tuesday.听
The agency said that the country is improving the control and transparency of its energy institutions and state-owned companies, reducing fuel subsidies and facilitating much-needed infrastructure investments. However the new IEA review underlined听that even though Indonesia remains a net energy exporter due to the expansion of its coal and liquid biofuel production, the country is consuming听more energy as a result of rising living standards, population growth and rapid urbanization.
Energy subsidies are a challenge听to developing the country鈥檚 energy sector, the EIA said in the "Energy Policies beyond IEA Countries: Indonesia 2015."
The agency听said the听decreasing fossil fuel subsidies and听the government鈥檚 recent move to phase out gasoline subsidies is a powerful sign for change but added that it needs to be sustained and extended to other fuels.
"Unrealistic targets and unclear regulations, difficult land and licensing acquisition, and limited options in private financing for small and medium-sized project developers are all major barriers to investment in Indonesia鈥檚 energy sector development,"听IEA Executive Director Maria van der Hoeven said.
"In the power sector, Indonesia鈥檚 achievements are notable,"听said the听IEA, underlining a steady increase of installed capacity, the partial opening of the electricity sector and a substantial increase in the electrification rate. However, EIA suggested that听to avoid electricity shortages and large-scale brown-outs, the country must take action to increase investment immediately in generation transmission and distribution infrastructure.
Indonesia needs to reform its wholesale pricing to bring it closer to reflecting听global market听pricing as well as implementing an integrated long-term development plan for natural gas infrastructure, and establish an independent regulator to monitor and co-ordinate the downstream sector.
The recommendation for Indonesia鈥檚 economy is that its听national energy plans and policies should be updated based on reliable data and on听realistic implementation aims.
By Huseyin Erdogan听听听听听听听
Anadolu Agency
huseyin.erdogan@aa.com.tr
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