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Issues

The dominance of meeting national energy needs in 2012-2018 still comes from fossil energy in the form of oil 46%, coal 21% and natural gas 18%. Meanwhile, renewable energy only contributes 5%. The characteristics of fossil energy sources are not renewable (unrenewable) because their reserves are limited and continue to decline (depletion). This situation implies the existence of national energy security vulnerabilities. In addition, this vulnerability is also driven by high energy demand and increasing dependence on the use of fossil fuels. Thus, insofar as new (fossil) energy reserves and non-conventional technologies have not been discovered in exploration and exploitation, a situation of high inequality between energy supply and demand nationally will continue to occur. (Handayani I.G.A.K.R, As’Adi E, Hamzah.G, Leonard T, Gunarto G., 2017)

Given the characteristics of fossil energy sources are not renewable (unrenewable) because their reserves are limited and continue to decline (depletion), when compared with world reserves of oil is only 0.20%, gas 1.60% and coal 1.10%. This situation implies the existence of national energy security vulnerabilities. In addition, this vulnerability is also driven by high energy demand and increasing dependence on the use of fossil fuels. Thus, insofar as new (fossil) energy reserves and non-conventional technologies have not been discovered in their exploration and exploitation, a situation of high inequality between energy supply and demand nationally will continue to occur. (Surachman A, Handayani I.G.A.K.R, Taruno Y., 2017)

The data shows that in general, Indonesia’s oil and gas reserves over the past 10 years have tended to decline. Petroleum reserves from 8.21 billion barrels in 2008 dropped to around 7.5 billion barrels in 2018. Reserve to Production (calculated against Proven Reserves) is in the range of 10-11 years. Indonesia’s natural gas reserves also continue to decline. Natural gas reserves in 2008 amounted to 170 TSCF and continued to fall to around 136 TSCF in 2019. However, for the Reserve to Production of Indonesian natural gas (against Proven Reserves), it tends to remain stable in the range of 34 years from 2009 to 2018, after dropped significantly from 41 years in 2008. This was partly because the amount of reserves proved to be able to be maintained, even though the production rate continued to run. (Handayani I.G.A.K.R, Sulistiyono A, Leonard L, Gunardi A, Najicha F.U., 2018)

The solution to this problem is the need to optimize the utilization of new renewable energy sources (EBT). Indonesia has various types of renewable energy such as hydro, geothermal, wind, solar, marine and biomass that have not been used optimally. Energy development for the long term by optimizing the use of EBT as an alternative to reducing the share of fossil energy use. Indonesia has a very high potential of EBT, Data from the Ministry of Energy and Mineral Resources in 2019 states that the potential of EBT in the geothermal / geothermal sector reaches more than 28,617 MW, which has only been used at 1,341 MW, while hydro power with a potential of 75,000 MW has only been utilized 7,059 MW, and biomass plants with a potential of 13,662 MW have only been utilized 1,772 MW. Among the EBT resources, biomass energy resources either for electricity generation fuels or as raw materials to be processed into biofuel (BBN) are types of renewable energy resources that are very prospective for development. (Subekti R, Sulistiyono A, Handayani I.G.A.K.R, 2017) The development of this EBT resource, besides reducing dependence on BBM, which is currently around 50% coming from imports, can also reduce pollution in the form of pollutants (solid, liquid and gas) and greenhouse gas (GHG) emissions. The development of EBT strengthens the Results of the 21st party conference (COP 21). The convention produced Paris Agreement to The United Nations Framework Convention on Climate Change, then ratified by Law Number16 of 2016 concerning Ratification Paris Agreement to The United Nations Framework Convention on Climate Change. (Algonin A.A, Shleag A.M, Handayani I.G.A.K.R, Setyono P., 2017)

Following the Act, the Minister of Energy and Mineral Resources established three ministerial regulations governing the use of renewable energy sources for electricity supply. The Minister of Energy and Mineral Resources initially issued the Minister of Energy and Mineral Resources Regulation No. 12 of 2017 to regulate the use of renewable energy. However, the regulation was changed into the Minister of Energy and Mineral Resources Regulation Number 43 of 2017. The Ministry of Energy and Mineral Resources Regulation Number 50 of 2017 concerning the Utilization of Renewable Energy Sources for Electric Power Supply, revoked Ministerial Regulation Number 12 of 2017. (Akhmaddhian S, Hartiwiningsih, Handayani I.G.A.K.R., 2017) Changes to regulations in this very short period of time have disrupted the construction of facilities for the utilization of new renewable energy. Investors who will utilize renewable energy sources need business certainty before carrying out development. Business certainty can be obtained if there is a clear and unchanging legal umbrella. Without a guarantee of business certainty, investors will be reluctant to utilize renewable energy. Regulations issued by the government through the Minister of Energy and Mineral Resources are considered detrimental to investors. The loss arises because of the tariff policy set by the government between the developer and PT. PLN (Persero) is not consistent. In addition, the low price of electricity causes entrepreneurs to get into trouble. (Handayani I.G.A.K.R, Sulistiyono A, Leonard L, Gunardi A, Najicha F.U., 2018)