Syed Abbas Hussain describes the importance of energy efficiency in Indonesia’s economy and describes how CDKN-supported initiatives have laid the groundwork for cost savings and avoiding greenhouse gas emissions.

Indonesia is among the top ten emitters of greenhouse gases in the world. Furthermore, with low lying areas dominating its terrain, the country is highly susceptible to climate change and its impacts – such as rising sea level. The Government of Indonesia has, accordingly, geared several policy commitments towards climate resilient growth and investing in low carbon initiatives.

Indonesia’s rapid economic growth has led to a high demand for energy and transport. The country has to keep its greenhouse gas emissions in check as per the mitigation targets set in its international commitments – a pledge to reduce emissions by 29% through its own efforts, or a total of 41% with international support by 2030 (see Outlook: Indonesia Special Edition for more information).

CDKN has played a key role in supporting the Government of Indonesia in delving into climate compatible development, particularly in the energy sector. The support has been in the form of technical assistance and knowledge brokering at the province, district and city level. CDKN has supported the integration of climate change mitigation measures in energy policies and programmes – including targeted support to the Ministry of Energy and Minerals Resources (ESDM) to develop a Nationally Appropriate Mitigation Action (NAMA) for energy efficient motors.

The Ministry of National Planning (BAPPENAS) assigned relevant government departments with the task of proposing sector specific NAMAs from 2012-14. The Ministry of Energy and Mineral Resources (ESDM) formulated a NAMA concept relating to electric motor systems, to reduce the demand for energy and for energy subsidies in the industrial sector, and so generate greater revenues for government and industry.

Motors form the cornerstone of industrial machinery. Therefore, promoting the efficiency of electric motor systems can reduce the consumption of energy considerably, since 60% of the energy demand in the industrial sector can be linked to electric motors. Old and outdated machinery tends to use copious amounts of energy. Therefore, ‘carbon friendly’ electric motor systems have to be developed and used on a wider scale to reduce energy wastage and help to conserve energy.

An impediment to the development of this technology and its uptake could be consumers’ perception that it is expensive. However, if the total expenses incurred in the long-run are calculated, energy efficient motors are shown to save cost dramatically. In fact, the purchase expense of the motors accounts for only 5% of the total cost while the remaining 95% of it relates to power usage. Furthermore, a recent IEA report found that, even though many benefits are difficult to quantify, in some cases a €1 investment in energy efficient measures can deliver a return as high as €4 when multiple benefits are taken alongside traditional benefits. A detailed exploration of the technical feasibility and the cost savings is explained in this webinar by energy experts Lachlan Cameron, Jeffrey Sipma and Maarten van Werkhoven at the Energy Research Centre of the Netherlands.

In Indonesia, there is a demand for the development of this kind of technology: when a wide set of industrial machinery was studied, it was revealed that only 22% of machines qualified as energy efficient. CDKN worked with ESDM and ECN in a collaborative initiative to analyse the potential for NAMAs in the energy sector, under the project: Indonesia Energy Sector NAMA Coordination. The target of the project has been to provide a strategy to describe and track energy mitigation actions and make sense of how these actions link to energy targets which already exist. The project also aims to increase the evidence base for describing and comparing mitigation actions.

The conclusions of the project show that there is a large role for Indonesia’s private sector to take up energy efficient motors and invest in technological innovations that can reduce the country’s carbon footprint. The NAMA proposal may be submitted to international donor networks, to augment funding for the development of this technology. The NAMA was also developed in parallel with a Common Accounting Framework for Energy – as detailed further by Xander van Tilburg in Outlook: Indonesia Special Edition  - and this framework offers the possibility to guide Indonesia in its larger climate mitigation actions.