Kaleidoscope 2017: Real Actions of EMR Sector in Achieving an Energy Justice (Part 1/4)

JAKARTA - The year 2017 is the year in which the Government strives for equity, in line with the commitment of the Government of the Cabinet of Work in the third year to put more emphasis on equitable distribution, after two consecutive years taking focus on foundation development and development acceleration. In terms of equity, the energy sector is one of the spearheads, given that equity in the energy sector is a manifestation of social justice for all Indonesians.

"We must not allow our people in Papua, in border areas, and in remote and foremost islands to suffer injustice by having to buy fuel (fuel oil) at prices many times compared to Java and Sumatra We also should not allow the people we in the archipelago do not get electricity at night, "said President Joko Widodo in the 4th Plenary Session of DEN early 2017 ago.

Following the mandate of the President, the Ministry of Energy and Mineral Resources (ESDM) has made various efforts to realize the energy of justice for all the people of Indonesia, including increasing the national electrification ratio which currently has reached about 93% by continuing to accelerate the electricity infrastructure 35,000 MW, subsidizing energy prices as low as possible without sacrificing people's purchasing power, building gas network infrastructure for households, as well as distributing fuel-to-LPG converter kits for fishermen.

Especially for the 3T area, the Government has launched the One Billion Price Fuel Program so that people in all regions of Indonesia can enjoy fuel at the same price, as well as build local community-based power generating plants and distribute Solar Energy Saving Lights ( LTSHE) for areas not covered by PLN's electricity network.

The beginning of 2017 also became one of the most historic years in the management of the national oil and gas industry. The Ministry of Energy and Mineral Resources has issued a phenomenal policy in the oil and gas sector by changing the production sharing contract (PSC) cost recovery scheme which has been used for decades to become PSC gross split through Minister of Energy and Mineral Resources Regulation No. 8 of 2017.

In 2017 also for the first time, the Ministry of Energy and Mineral Resources has only 15 licenses with details of 6 oil and gas permits, 6 minerba permits, and 3 EBTKE licenses. As for the electricity subsector, the ESDM Ministry only issued 3 certification and 2 recommendations. All these permissions are further simplified through the implementation of an online system.

The following are reviews of incidents in the energy sector that occurred in 2017 first quarter:

JANUARY

January 1, the introduction of electricity tariff adjustment for the 900 VA community of capable customers. This adjustment is made to enable the electricity subsidy to be well targeted and can drive a reduction of approximately Rp 20 trillion in electricity subsidies in the 2017 APBN. The budgets resulting from subsidy savings will be diverted for more important development programs including electricity, health and education infrastructure.

January 11, Government Regulation No. 1 of 2017 is issued in the framework of implementing the increase of metal mineral added value through metal mineral processing and purification activities as referred to in Law No. 4/2009 on Mineral and Coal Mining. The birth of this PP provides optimal benefits for the state and provides legal certainty and business certainty for the holders of Production Operation IUP, Production Operation IUPK, Contract of Work, Coal Mining Concession Working Agreement.

January 13, Regulation of Minister of Energy and Mineral Resources Number 08 Year 2017 concerning Production Sharing Contract Gross Split is determined in the framework of the implementation of upstream oil and gas business activities based on profit sharing contract oriented to the improvement of efficiency and effectiveness without operating cost recovery mechanism.

January 18, signed a Working Area Contract (WK) Offhore North West Java (ONWJ) between SKK Migas with Pertamina Hulu Energi Cooperation Contract (KKKS) Contractor. The contract valid until January 18, 2037 is using the first Gross Split Production Sharing Contract (PSC) scheme applied in Indonesia.

In January also launched 3 hour investment services sector of EMR and ESDM One Map Indonesia as the embodiment of data integration in the EMR sector.

FEBRUARY

On February 10, the Ministry of Energy and Mineral Resources (ESDM) approves the submission of PT Freeport Indonesia (FI) and PT Amman Mineral Nusa Tenggara (AMNT) mining concession rights changes to Special Mining Operation License (IUPK). This demonstrates the Government's commitment to continue to create a conducive investment climate and implement good governance of the mineral and coal mining sector, thus providing greater benefits to the State.

MARCH

March 10, Villages on the border of Papua New Guinea have been able to enjoy electricity with the launch of eight packages of Central Solar Powered Power (PLTST) with a total installed capacity of 145 kilowatts (kW) and 65 units of Solar Street Light (PJU) Solar Power or PJU Cerdas in Keerom Regency, Papua Province.

March 18, President Joko Widodo (Jokowi) inaugurated 8 Power Plants (PLTG) Mobile Power Plant (MPP) spread in 8 locations with a total capacity of 500 Megawatts (MW) and 9 other electricity infrastructure in West Kalimantan.

March 21, Minister of Energy and Mineral Resources attends the naming ceremony of Floating Processing Unit (FPU) cricket ship, at Saipem Karimun Yard, Tanjung Balai, Riau Islands, which marks the immediate production of gas from Muara Bakau Block. The first gas is targeted mid-2017. The FPU is the largest floating facility in Indonesia, with a width of 46 meters and a length of 192 meters.

March 29, the signing of 10 New Renewable Energy (EBT) power supply agreements between PT PLN (Persero) and renewable energy development company.

In March, there was also an Electricity Supply Business Plan (RUPTL) for the period 2017 - 2026 by issuing the Decree of the Minister of EMR No. 1415 K / 20 / MEM / 2017. In this new RUPTL, energy mix for Renewable Energy (EBT) targets rose from 19.6% to 22.5% in 2025. RUPTL revisions also set new targets for electricity infrastructure, optimizing the use of local energy for power generation and selection more efficient technologies that can lower the cost of providing electricity.

Continued ... .. (KO)

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