I.

INTRODUCTION
Indonesia has the 4th largest population in the world with more than 240 million inhabitants. In
2013, Statistics Indonesia reported that the population is growing by almost 4 million annually.
This rate is frequently associated with a steep increase in the consumption of both food and
nonfood products.
The Indonesia!s "#$ growth rate is one of the 20 in the world to ha%e reached &.'()
1
. *ith this
staggering economic growth, the country has been witnessing social changes which are
profoundly altering its society. +urrently, appro,imately &0 ) people li%e in urban areas and
ha%e %irtually adopted a urban lifestyle, pushing the percentage of consumption on nonfood
products to &1.0().
In 2013, the Indonesian mar-et registered an increase of 2'.3) of total in%estment from 2012.
The Indonesia In%estment +oordinating .oard /.$012 also reported that the 2013 3oreign
#irect In%estment /3#I2 reali4ation was up 1'.') from 2012. In 2014, a new in%estment record
was hit for the first quarter, as in%estments surpassed 5p10& bn. 6lmost half of the foreign
in%estment went to the manufacturing sector. In 2012, Indonesia has amended its import duty
regulations to moti%ate in%estment. In addition, the go%ernment has published its latest
in%estment regulation, which now allows for a broader share of foreign in%estment in se%eral
sectors7 such as electricity transmission and distribution, transportation, health, pharmaceutical,
and creati%e economy.
In regards to the o%erall high potential of the Indonesian mar-et, the energy sector remains
promising. Indonesian growth in energy consumption reached an a%erage of ') per year
2
.
8owe%er, the capacity of energy supply from e,isting structures cannot -eep up with demand. 6
ma9or response by the go%ernment was gi%en in 200: with the issuing of the national energy
policy, and which aimed for a mi,ed energy share to be reached in 202&. This was reinforced in
the current 1aster $lan for the 6cceleration and ;,pansion of Indonesia!s ;conomic
#e%elopment /1$3;I2, which acti%ely promotes a change in energy dynamics in order to foster
production efficiency, broader clean energy use and the dissemination of en%ironmental
technology.
+lean energy and en%ironmental technology can be subdi%ided in se%eral possible segments<
waste, water and air pollution management7 new and renewable energies /especially bio
energy, wind and solar27 ne,t generation of electricity transmission and smart grid7 sustainable
transport7 en%ironment consultancy7 and green building. The present study will focus on certain
fields, following the following categori4ation< waste management, new and renewable energies,
and =green building>.
1
Statistics Indonesia, 2014
2
Azahari (2012)
Those particular categories are rele%ant when discussing Indonesia!s current approach in
regards to an en%ironmental paradigm change in the country. Indonesia has a national
commitment to reduce carbon emissions by 2:) in 2020.
3irstly, policyma-ers ha%e identified waste management as a potential gateway to consolidate
the production of clean energy /also called =bioenergy>2. 6n acti%e approach to the latter is
considered -ey towards sustainably raising energy efficiency and minimi4ing waste production.
?econdly, concerning the de%elopment of renewable energy production, the go%ernment
established a feedin tariff policy for hydro power, geothermal, solar, bioenergy, landfill gas and
municipal waste applications using =4erowaste> technology. The feedintariff policy typically
requires the fulfillment of three -ey conditions< guaranteed access to the national grid, a long
term purchase agreement, and a payment le%el based on the generational costs of renewable
energy.
3
3inally, =green building> has been gi%en a particularly central role in the intended =energy shift>.
In 6pril 2013, the current @a-arta administration issued the go%ernor regulation Ao. 3(B2012
regarding green building for future building constructions. The new rules gi%e the "reen .uilding
+ouncil of Indonesia /".+I2 the power to certify buildings which ha%e applied the re%ised
Aational ?tandard of ;nergy +onser%ation ?ystem of 6ir 3lows and .uilding. The current policy
trend suggests that the go%ernment is indeed mobili4ing efforts to enforce, encourage and
promote the use of clean energy and en%ironmentallyfriendly technology. 3oreign in%estors and
producers ha%e been responding well to these recent de%elopments, %isible in the ongoing rise
of 3#I directed at clean energy technology.
II. MARKET ANALYSIS
1. Water, Waste, and Air Pollution Management
In 2012, a study reported that only 1C) of Indonesian people carry out waste sorting
4
. 6mong
the rest of people, only &C) would consider doing it. 6wareness among Indonesian people
regarding waste management is still %ery low, supported by a low output le%el concerning
municipal waste treatment. The collection and treatment of waste is performed by publicly
owned companies managed by municipalities, which struggle with a lac- of resources. In
addition, recurrent sca%enging and endemic misinformation regarding recycling habits
contributes to %ery poor treatment efficiency.
8owe%er, the notion that waste management technology for both landfill and open dumping can
become a source of bioenergy has been gaining momentum. 6s such, the central go%ernment
has been acti%ely pushing for municipalities to de%elop consolidated sanitation strategies,
highlighting solid waste management in its ob9ecti%e of streamlining local, regional, and national
3
Mendonca (2007)
4
Aprilia, et al. (2012)
efforts. The current Aational 1idTerm #e%elopment $lan of the 1inistry of Aational
#e%elopment $lanning and Aational #e%elopment $lanning 6gency /.6$$;A6?2, for the
period 20102014, states the following goals for solid waste treatment<
Increase waste collection rates and sanitary disposal
5eplace local and regional waste dumping with sanitary disposal
Increase solid waste ser%ice le%els and related budget for solid waste management.
#espite the abo%e plan, "o%ernment of Indonesia also pro%ides feedintariff for e,panding
de%elopment, increasing in%estment and increasing the ratio of electrified %illages. The 3IT is
usually applied differently based on the si4e and location. Dwhat!s the connection with the
abo%eEF
Table 1: Feed-in-tariff fr !"ni#i$al %a&te "tili'atin %it( 'er %a&te te#(nl)*
Re)in Fa#tr Medi"! +lta)e
,R$-
.i)( +lta)e
,R$-
/a0a1 2ali1 S"!atera 1 1,0&0 1,3C(
Kali!antan1
S"la%e&i1 NT21 NTT
1.2 1,2:0 1,:''.:0
Mal"3"45a$"a 1.3 1,3:& 1,(1'.40
Source: Azahari (2012)
*ith a mar-ed increase in urban population and general consumption, waste management is
becoming %ital for the welfare of the Indonesian people and the country!s en%ironment. In fact,
the already booming urban population is pro9ected to reach :0) in 202&, ma-ing the need for
acti%e sustainability policies all the more unquestionable. 6s mentioned abo%e, the go%ernment
has been acting on its concerns and has been promoting in%estment in green energy
technologies, particularly waste management. +urrently, there are se%eral pro9ects are
underway, supported by international de%elopment support in regional and metropolitan cities,
namely<
1. @atiwaringin solid waste treatment plant /Tangerang2, supported by @apan, with an
in%estment of 5p. 1.: trillion, aiming at increasing processing capacity of 2,&00 tonBday
&
.
2. ?olid waste management system impro%ement in 1alang, @ambi, @ombang,
$e-alongan, and ?idoar9o
:
, led by "ermany!s support, in an in%estment of G?H 100
million.
3. ?olid waste water management impro%ement in @a-arta, 1anado, and .ali-papan,
supported by the *orld .an-, with a pro9ect total of G?H 14& million
'
.
4. 3easibility ?tudy of the Iandfill 1ethane "as Gtili4ation $ro9ect in ?emarang in 200',
supported by @apan, with a total pro9ect cost of G?H 4,112,000
(
.
&
@oniansyah /20132
6
General irectorate !ipta "ar#a ( 2013)
7
$orld %an& (2013)
'
Glo(al )n*iron+ental !enter ,o-ndation (2007)
Table 6. Feed-in-tariff fr landfill )a& "tili'atin
Re)in Fa#tr Medi"! +lta)e
,R$-
.i)( +lta)e ,R$-
/a0a 2ali 1 S"!atera 1 (&0 1,1C(
Kali!antan1
S"la%e&i1 NT21 NTT
1.2 1,020 1,43'.:0
Mal"3"45a$"a 1.3 1,10& 1,&&'.40
Source: Azahari (2012)
3eedin tariffs are pro%ided for municipal waste utili4ation and landfill gas utili4ation. 8owe%er,
the pro9ect landfill gas utili4ation is not really de%eloped yet. #ue to its big population number, it
produces a huge amount of the waste. 8owe%er, most of the waste is disposed in open dumping
area. #ue to the lac- of preparation for landfill gas utili4ation system, it cannot generate the
potential energy Dagain, what!s the connection with the abo%eEF
In spite of the aforementioned underta-ings, there are se%eral planned waste management
pro9ects awaiting initiation, as instated in the go%ernment!s $ublic $ri%ate $artnership .oo-
De,plain what is the .oo-F, namely<
1. ?olid *aste Treatment and 3inal #isposal J .ogor K #epo- /*est @a%a2
$ro9ect +ode Ao < # 033 22 010C J 2:
$ro9ect concept< Lperation of a sanitary landfill site with household and commercial
waste from the district of .ogor and #epo-.
2. ?olid *aste Treatment K 3inal #isposal $utri +empo 1o9osongo, ?ura-arta, +entral
@a%a
$ro9ect +ode Ao < # J 033 22 0210 221
$ro9ect concept< establishment and operation of an integrated solid waste management
at a landfill in ?ura-arta.
3. #0I @a-arta ?ewage Treatment $lant
$ro9ect +ode Ao.< $ro9ect code< # J 00& 12 J 030
$ro9ect +oncept< establishment and impro%ement of wastewater system and sector
condition in #0I @a-arta
2. Ne and !enea"le #nerg$
Indonesia is stri%ing to create a lowcarbon economy and $resident Mudhoyono has ta-en the
lead in committing to cut productionled carbon emissions by 2:) in 2020 without international
support. In the national energy strategy, Indonesia has also committed to allocating 20) of the
energy mi, for renewable resources by 202&
Fi)"re 1. Natinal Tar)et f Ener)* Mi7
.
Source: National !esearch %ouncil (201&)
Indonesia!s energy sources are still dominated by oil, which reser%es are often estimated to
become depleted by 2022. The Aational ;nergy $olicy 2014 /A;$ 20142 De,plain what this is, if
necessary mention it e%en before in the introduction of the chapter7 if you do, then add =as
mentioned abo%e> to the beginning of this sentenceF aims to ele%ate renewable energies to
represent 23) of the share of the country! energy sources in 202&. In fact, Indonesia presently
boasts a highly promising mar-et regarding new and renewable energies, stemming mainly from
the country!s lac- of =old energy> infrastructure and its need for a more efficient energy
production to sustain economic growth7 but also ideal natural conditions, mainly for the
production of hydroelectric, geothermal, sea, biomass, solar and wind energy.
Table 8. Rene%able Ener)* 5tential 0& In&talled Ca$a#it*
NON-FOSSIL
ENER9Y
RESOURCES ,SD- INSTALLED
CA5ACITY ,KT-
RATIO KT4SD
.*dr
'&,:'0 1* :,(4(.4: 1* C.0&)
9et(er!al 2C,1:4 1* 1,341 1* 4,:)
Mini4Mi#r .*dr ':C.:C 1* 230 1* 2C.C)
2i!a&& 4C,(10 1* 1,:44.1 1* 3,3)
Slar Ener)* 4.(0 -*hBm2Bday 2'.23 1*
:ind Ener)* 3 J : mBs 2.'31 1*
O#ean 4C "* 0.01 1* 0)
Urani"! 3000 1* 30 1* 0)
Source: Ministry of Energy and Mineral Resources (2013)
The A;$ 2014 proposes that the country should new and renewable energies should represent
more than 20) of the energy mi,. 6s can be seen in the figure abo%e, there is still a long way
ahead in the de%elopment of renewable energies in Indonesia. It is often pointed out that a
ma9or obstacle is insufficient infrastructure, which pre%ents grid connection between these
country!s islands. In order to address this shortcoming, the Indonesian go%ernment has found a
potential solution to accelerate the de%elopment of the needed infrastructure in $ublic $ri%ate
$artnership /$$$2 and ta, relief schemes. In the latest ministerial regulation in 2012, Indonesian
authorities sought to decisi%ely encourage further in%estment by pri%ate and foreign companies
by granting 3eedinTariff /3iT2 to pro9ects which focus on de%eloping hydroelectric, biomass,
solar, wind and geothermal energy generation
C
. The de%elopment of ocean and wind power
plant is still a pilot pro9ect as a precondition prior to the stage of commerciali4ation. Thus the
Ddon!t understand what you mean by the this sentence, what is particular about ocean and wind
power in the conte,t of the 3iT gi%en to new energy generation pro9ectsEF $otential for uranium
e,traction is only found in 0alan, *est .orneo. 8owe%er, the Indonesian go%ernment has not
suggested that nuclear energy could be part of the country!s present reform master plan
regarding energy. The present study will focus only on the mar-et potential regarding
hydroelectric, geothermal, biomass and solar energy.
Hydro Power Plant
Indonesia is yet to impro%e its infrastructure to a degree that can allow for an optimal
e,ploitation of its potential hydroelectric resources, estimated to be around '&,000 1* for
8ydropower and ''0 1* for miniBmicro hydropower. The highest potential is found in outside
the island of @a%a. Lne landmar- e,ample in $$$ plans for 2013 was the initiation of the
implementation of the 0arama 8ydro ;lectric $ower $lant pro9ect. Iocated in the pro%ince of
*est ?ulawesi, the new structure is e,pected to hold a capacity of 4 , 112.&0 1*.
In most cases, independent power companies will be required to sell their electricity to $IA
/Perusaaan !istri" #egara, the ?tate ;lectricity +ompany which has a monopoly on the
national mar-et2. 8ydropower stations with a potential output of more than 10 1* ha%e to
negotiate the purchase price with $IA on an indi%idual basis. 3or hydroelectric power stations
below 10 1*, there is a 3iT that %aries according to %oltage and region.
3or regions outside @a%a, the basic tariff for the connection to the medium transmission line
/200N2 is 5p:&:, while the connection to the high %oltage networ- is set at 5p1004, multiplied
by a factor %arying between different regions. 6s a result, different 3iTs apply throughout the
country, as shown in the following table.
Table ;. Feed-in-Tariff fr .*dr$%er
Re)in Fa#tr
Medi"!
+lta)e
,R$-
.i)(
+lta)e
,R$-
.
Ministr# o/ )ner0# and Mineral 1eso-rces (2012)
/a0a1 2ali 1 :&: 1004
S"!atera1 S"la%e&i 1.2 '(' 120&
Kali!antan1 NT24NTT 1.3 (&3 130&
Mal"3"45a$"a 1.& C(4 1&0:
Source: Azahari (2012)
+on%ersely, 3iT for miniBmicro hydropower is still being re%ised. 8owe%er, it is already public
-nowledge that the tariff will be increased from 5p:&:B-*h to a new number between 5pC'&
10&0B-*h. +urrently, "ermany is supporting the de%elopment of technical ad%isory and
capacitybuilding concerning renewable energy offgrid installation and which includes up to 13:
microhydro power plants.
6ccording to the 1inistry of ;nergy and 1ineral 5esources /1;152, there are 20 pri%ate
hydropower suppliers officially registered in the country.
$eoter%al
Indonesia is home to 40) of the world!s geothermal energy resources. .ased on a letter of
#irectorate "eneral of Aew and 5enewable ;nergy in 2011, there are 33 licensed geothermal
energy companies. 8owe%er, the utili4ation of geothermal energy resources is still %ery low,
ha%ing contributed to only for &) of the total production of energy in Indonesia Dwhat yearEF.
Table <. 9et(er!al 5tential in Indne&ia =%(at *ear>?
Re&"r#e&
,M:e-
@ Re&er0e
,M:e-
@
S$e#"lati0e .*$t(eti#al
4&.3:)
5&&ible 5rbable 5r0en
&4.43) (,C0& 4,3C1 12,'&: (23 2,2((
132C: 1&(:'
Source: Ministry of Energy and Mineral Resources
The go%ernment of Indonesia has included the goal of increasing the utili4ation of its geothermal
energy potential in the currently ongoing reform of the sector. This concern was finally put into
action in 2012 in the latest 1;15 regulation with the amendment of the pre%ious 3iT for
prospecti%e producers of geothermal energy. The latter thus ad9usted the pre%ious nationwide
3iT, which was capped at G?H0.C'B-*h, to the following<
<
Table A. Feed-in Tariff fr 9et(er!al
L#atin
Tariff ,USD #ent& $er 3:(-
.i)( +lta)e Medi"! +lta)e
?umatra 10.0 11.&
@a%a, 1adura, .ali 11.0 12.&
?outh, *est, and ?outh ;ast
?ulawesi
12.0 13.&
Aorth and +entral ?ulawesi
and "orontalo
13.0 14.&
*est and ;ast Ausa Tenggara 1&.0 1:.&
1alu-u and $apua 1'.0 1(.&
Source: 'asan and Wah(osudi"(o (201&)
In response to the industry!s demand, the go%ernment plans to amend the regulation that
establishes a differentiation of 3iT according to the characteristics of the technology used /e.g.
si4e, type or origin2 The new 3iT proposal establishes a classification based on capacity di%ided
into 4 groups< more than && 1*7 20&& 1*7 1020 1*7 and smaller than 10 1*. In addition,
the classification also attributes a distinction according to the temperature generated by energy
production DI added this, is this correctEF< high temperature /higher than 22&
o
+2 and mediumBlow
temperatures /lower than 22&
o
+2
10
.
6lthough Indonesia has committed to increasing the deployment of renewable energies by
including, among others, the introduction of 3iT schemes for green electricity, se%eral barriers
must still be o%ercome for the country to reach its full potential. In particular, geothermal pro9ects
require integrated efforts and ris- management between upstream and downstream acti%ities.
.eyond in%estment factors, there is also the fact that about (0) of the country!s geothermal
reser%es are located in designated protected forest areas. Lnly a $residential #ecree could
allow for the e,ploitation of geothermal energy in these areas Dmention why it would be so hard
for a $residential #ecree to pass. Too longE ;n%ironmental impactE In 2013, there were 2(
pro9ects scheduled to begin implementation until 201' awaiting pending licenses and
certificates.
#e%elopment of geothermal energy is costly. It is estimated that for 1 1* of energy, G?H3
million need to be in%ested. In addition, the high drilling costs are a ris- for de%elopers, as each
well e,ca%ation can cost between G?H3 and G?H& million, regardless of the operation!s
success.
11

#espite this, the Indonesian authorities belie%e that this field has an important role to play in the
country!s future and are determined to attract in%estment towards it. In 2013, the .0$1
/Indonesian In%estment +oordinating .oard2 opened some in%estment opportunities in
geothermal power plant pro9ects. These are to be located in ?umedang*est @a%a, .lawanI9en
/potential 2'0 1*2, Agebel1t. *illis /potential 120 1*2, ;ast Iombo- 5egency /potential '0
1w2 and #ompu 5egency*est Ausa Tenggara /potential :C 1*2.
&io%ass'&iogas Energy
3ossil energy resources are feared to become e,hausted in 2022. 3ortunately, Indonesia is rich
in agricultural products, many of which are plants which are apt for the production of bioenergy.
5ecogni4ing this potential, the go%ernment has also set as a priority to accelerate the country!s
progress in the transition from oil to bio fuel /solid, gas and liquid2.
In 2013, the current total biomass potential of Indonesia is 4C,(10 1*e, with a real utili4ation
capacity of :(C.43 1*e for offgrid installation and 20'.3 1* for ongrid installation
12
. The
highest potential is located in the pro%ince of *est @a%a, followed by +entral @a%a and ;ast
@a%a. .iomass can be sourced from %arious -inds of industrial product residues, such as palm
oil /shell, fiber, trun- and frond2, bagasse, coconut shell, rubber, rice hus-, corn rod and lea%es,
cassa%a stem, and wood waste.
10
2asan and $ah3-s-di(3o (2014)
11
Grie(eler (2012)
12
Ministr# o/ )ner0# and Mineral 1eso-rces (2014)
Table B. Feed-in Tariff in bi!a&&4bi)a& $lant&
Re)in Fa#tr Medi"! +lta)e
,R$-
.i)( +lta)e
,R$-
/a0a1 2ali1 S"!atera 1 C'& 132&
Kali!antan1
S"la%e&i1 NT21 NTT
1.2 11'0 1&C0
Mal"3"45a$"a 1.3 12:'.&0 1'22.&0
Source: Azahari (2012)
The Indonesian electricity mar-et is still dominated by $IA, which has a monopoly for feedin
electricity in the national grid. In order to foster e,pand total national capacity, pri%ate electricity
pro%iders were gi%en the opportunity to become independent power producers /I$$2 and to sign
power purchasing agreements /$$62 with $IA. The $$6 determines the agreed terms and
conditions under which electricity can be fed onto the $IA grid.
International equipment suppliers can act as pro9ect de%elopers who sell their equipment to the
owner of the power plants, which would be in most cases the owner of the palm oil mill or
specific pro9ect %ehicle DI don!t understand this sentence. To me it sounds li-e this< Peo(le wo
sell e)ui(%ent can *eco%e (ro+ect de,elo(ers J what is a pro9ect de%eloper in this senseE *y
selling teir e)ui(%ent to te owners of te (lant- wo are in turn owners of a (al% oil %ill J
from which they e,tract the biomass to be used on their plant I assume J7 or owners of a
s(ecific (ro+ect ,eicle J I don!t -now what this isF In%esting sta-eholders are also encouraged
to coordinate their operations with the local go%ernment closely, to foster capacitybuilding and
-nowledge of bioenergy among the local authorities.
Solar Energy
Indonesia!s geographic location, along the equator, pro%ides the country with an a%erage of 10
12 hours /depending on location2 of daily sunlight throughout the year. The solar electricity
generation potential stands, in most regions, at 4.( -*hBsqmBday and up to &.4 -*hBsqmBday in
;astern Indonesia
13
. Lne of the ma9or challenges in this subsector is the lac- of the logistics
supply necessary to reach the more remote areas. To ma-e the most of this resource, the
go%ernment launched the bid Dwhat is =the bid>E when was it launched, what is itE the following
only mentions who can participate and what documents they should sign, but it does not e,plain
the policy instrument.F. The programme is open to stateowned enterprises, local go%ernment
owned enterprises, pri%ate Indonesian incorporated enterprises, and bidding consortia. 3oreign
companies can participate in consortia, 0?L /$ro9ect @oint +ooperation J what is thisE2, and
9oint %entures with pri%ate Indonesian incorporated or stateowned enterprises.
Fi)"re 6. T(e Ca$a#it* f 5(t0ltai# 5%er 5lant in Indne&ia
13
Ministr# o/ )ner0# and Mineral 1eso-rces (2012), p. 22.
Source: )ruse (201&)
.efore the 5egulation no.1'B2013 of 1;15 came into force, $IA was allowed to purchase
electricity from solar power producers through direct appointment without tender. +on%ersely,
new regulation establishes an 3iT for solar photo%oltaic power pro9ects capped at
G?H0.2&B-*h, or G?H 0.30B-*h /if at least 40) of the production unit!s components are made
in the country2.
In 2013, the #irectorate"eneral for Aew and 5enewable ;nergy and ;nergy +onser%ation of
the 1;15 announced the opening of a bid for se%eral solar energy plant pro9ects, which should
achie%e the output of 140 1* in many areas in Indonesia
14
. .ids open to stateowned
enterprises, local go%ernmentowned enterprises, pri%ate Indonesian incorporated enterprises
and bidding consortia. $articipation of international companies requires establishment of a 0?L
/$ro9ect @oint Lperation2, +onsortium or @N with pri%ate Indonesian incorporated or stateowned
enterprises. Drepeats what was written abo%e i(sis ,er*isF
+urrently, there are mere & locations being e,ploited by 4( successful participants. The pro9ects
are located in the eastern part of Indonesia, mostly in the Ausa Tenggara islands. The
in%estment on solar power plants is pro9ected as 5p2.( billion for a total output of 140 1*.
Thus, there are still 124.& 1* power %olume left in '2 locations for tender. It is estimated that in
order to produce 1 1*, an area of 1.2 ha is necessary.
6t present, "ermany is supporting technical ad%isory and capacitybuilding regarding offgrid
installation, counting 11' $N Dwhat!s $NEF minigrids in total.
14
Antara 4e5s (2013)
In the longterm, the production of solar energy can e%ol%e to become increasingly cheaper with
the emergence of a local production of solar cells. $resently, there is no production of solar cells
in Indonesia. +urrently, e,isting companies in the photo%oltaic business are dedicated to
assembling solar cell modules using imported solar cells. 6t the moment, there are eight such
companies in Indonesia. 6s a result, this demand creates a large e,port mar-et for international
producers and suppliers in Indonesia.
.ind and /cean Energy
The de%elopment of wind and ocean energyrelated initiati%es is currently made solely through
the implementation of pilot pro9ects. In 2014, the country!s output capacity of wind energy
stands at a mere 1.4 1* installed. *ith respects to ocean energy, a few small pro9ects ma-e
up a total capacity of 10-*. The go%ernment is engaging in foreign partnerships targeting
capacity building and technology transfer to foster further de%elopment. The wind and ocean
energy 3iT is also being wor-ed on to find figures which can attract more in%estments. In
parallel, the go%ernment also e,pressed a concern towards de%eloping the manufacturing of
related components in the country, which is e,pected to be reali4ed in upcoming policies for this
area. DI added this, is this L-EF
*. +reen ,uilding
Indonesian authorities ha%e reali4ed that in%esting in de%eloping new and renewable energy
production would in%ol%e high ris-s if energy efficiency is not impro%ed. This concern has been
put forth in recent de%elopments in the real estate and ci%il construction regulatory landscape.
In 6pril 2013, the current @a-arta administration issued the new go%ernor regulation Ao. 3(B2012
regarding green building for future building constructions. *ith this regulation, the city
go%ernment wants to reduce carbon emissions from buildings by 13( 1T +L2 /4' 1T for
commercial buildings and C1 1T for residential building2 annually.
1&
In addition to this regulation,
the International 3inance +orporation /I3+2 has shown interest in facilitating the funding for
retrofit pro9ects and has begun cooperating with local ban-s for financing such pro9ects.
1:
This
new regulation will be applied to<
Offi#e b"ildin)&1 &($$in)
!all&1 a$art!ent #!$le7e&
O &0,000 1
2
.tel& and (&$ital O 20,000 1
2
Ed"#atin Fa#ilitie& O 10,000 1
2
Source: +o-ernor !egulation no. *. /ear 2012
6ccording to the new regulation, new buildings ha%e to comply with se%eral energy efficiency
standards. 3or instance, the o%erall thermal transmittance %alue /LTTN2 for the building shall
not e,ceed 4& watts per sqm. #etails regarding the LTTN can be found in the national product
standard regulation ?AI 03:3(C.
1'
+ooling systems ha%e to pro%ide efficiency according to the
16
7a&arta Green %-ildin0 8ser G-ide (2013).
16
i(id
17
7a&arta Green %-ildin0 8ser G-ide 9ol. 6 (2013).
national product standard regulation ?AI :3C02011. +hilled water pipes ha%e to be insulated.
1(
Through the obser%ance of the standards for the building en%elope alone, it is e,pected that
energy sa%ings hit between :) and 1C).
1C
Aonetheless, the "reen .uilding +ertification /".+2 applies for both new and e,isting buildings.
There are : aspects in the assessment< /12 6ppropriate ?ite #e%elopment /6?#27 /22 ;nergy
;fficiency K 5efrigerant /;;527 /32 *ater +onser%ation /*6+27 /42 1aterial 5esources K +ycle
/15+27 /&2 Indoor 6ir 8ealth K +omfort /I8+27 and /:2 .uilding K ;n%ironment 1anagement
20
.
+urrently, the "reen .uilding +ouncil Indonesia /".+I2 is the only authori4ed institution in the
country to perform the assessment and issue the +ertification. The ".+I has also been trying to
promote the notion that the costs of the ".+ will be compensated by lower building
maintenance and e,penditure in the future Dcan we say that the ".+I has been promotingE I
added thatF.
III. Mar3et $tential in Indne&ia Clean Te#(nl)*
L%erall, there are se%eral general challenges in de%eloping clean technology acti%ities in
Indonesia. The main challenges are as follows.
3irstly, the high production costs become an inherently primary challenge in competing with
traditional energy and products. In addition, the go%ernment!s insistence on maintaining
subsidies which directly benefit fossil energy competiti%eness creates a loc-down for endusers
and clean technology businesses. 1oreo%er, components must be imported, which ine%itably
burdens any type of in%estment in the field.
?econdly, the in%estment and property ownership regulations may constitute an obstacle for
foreign in%estors that are interested in entering the Indonesian mar-et. 8owe%er, partnering with
a local in%estor can open many doors, added to the fact that the probability to find a partner is
now high, gi%en the high demand for in%estments in new and renewable energy. #espite this,
the country!s resources remain highly promising, although in fact still to be further unloc-ed by
more agile regulations and go%ernance.

Iast but not least, Indonesia lac-s in both technology and human resources to be able to
implement and de%elop clean technology industries in a consistent fashion. 1oreo%er, the
consumer and the a%erage citi4en!s awareness about cleantechnology is still low.
Ae%ertheless, sur%eys ha%e postulated that due to the influence of societal changes which stem
from the country!s steady economic growth and rising middle class, a future mar-et for clean
technologies and energy production is increasingly well percei%ed.
1'
7a&arta Green %-ildin0 8ser G-ide 9ol. 3 (2013).
1.
7a&arta Green %-ildin0 8ser G-ide 9ol. 6 (2013).
20
Green %-ildin0 !o-ncil Indonesia 1atin0 :ools (2014)