The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025

Ukar Wijaya Soelistijo; Aryo Prawoto Wibowo; Makmun Abdullah

doi:doi:10.11648/j.earth.20130206.16

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The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025

Ukar Wijaya Soelistijo, Aryo Prawoto Wibowo, Makmun Abdullah

Published in Earth Sciences (Volume 2, Issue 6)

Received: 9 November 2013 Published: 30 November 2013

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Abstract

One of the objectives of the National Energy Policy (KEN) of Indonesiawhich is listed in Perpres (Presidential Regulation) number 5/2006 is the realization ofan optimal energy mix in 2025 by lowering oil consumption to 20% and increased utilization of coal to greater than 33%. KEN also mandates that more than 2% of national energy needs is derived from coal liquefaction process. This research aim is to analyze atthe economic impact and linkages among sectors using Indonesian 2005 Input-Output Table which will be projected to 2025 by entering low-rank coal synthetic oil (CSO) sector as a new classification. Econometric models (regression analysis) and linear programming are applied in this research. The result of economic calculation of investation in CSO plants indicates that on the coal price assumption of US$60/ton, synthetic coal oil price of US$111/bbl, and the interest rate (i) 5%, in general will give the Internal Rate of Return (IRR) is less than 10%. Analysis of backward linkages shows that the CSO sector will have a potential increasing a new output for the economy higher than the other energy sectors, but lower rate of forward linkage (downstream). Meanwhile, the multiplier effect indicates that the development of CSO plant is capable of moving national economy sectors equivalent to the petroleum refining sector and other energy provider sectors.The lower surplus multiplier shows that the investment in the CSO sector will be attractive if the government gives incentives on the enterprise, things such as regulation and investing financial support, tax incentives/tax holiday, price subsidies, and the coal prices scheme arrangements.

Published in	Earth Sciences (Volume 2, Issue 6)
DOI	10.11648/j.earth.20130206.16
Page(s)	149-157
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Energy Policy, Coal Liquefaction, Linkages, Multiplier, Linear Programming

References

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[3]	Anonymous (c), Laporan Gasifikasi Batubara Indonesia Volume I, II, III 1999-2000. Departemen Energi dan Sumber Daya Mineral, 2000.
[4]	Anonymous (d), Coal Technology. Proceedings of Seminar on Coal Technology and the Indonesian Needs, Jakarta, October 19-26. Republic of Indonesia-Federal Republic of Germany, 1980.
[5]	Anonymous (e), Feasibility Study on Direct Liquefaction of Banko Coal in Indonesia. BPPT and NEDO, Kobe Steel Ltd, 2002.
[6]	Anonymous (f), Coastal Case-Coal Liquefaction. BPPT, NEDO, Kobelco, 2003.
[7]	Anonymous (g), Bahan Menteri ESDM Pada Rapat Kerja Pemerintah dan Peran BUMN Dalam Percepatan dan Perluasan Pembangunan Nasional. Istana Bogor, 21 Februari, 2011.
[8]	Anonymous (h), 2011. Low-rank Coal Upgrading Technology Development, Final Report. Research and Development Center for Mineral and Coal Technology (tekMIRA) and Japan Coal Energy Center (JCOAL)/Kobe Steel, Ltd, 2011.
[9]	BadanPusatStatistik, Tabel Input-Output Indonesia, Jakarta, Indonesia, 2005.
[10]	BP-PEN, Blueprint Pengelolaan Energi Nasional 2006-2025, (BPEN), Jakarta, 2010.
[11]	V. Bulmer, and Thomas, I-O Analysis in Developing Countries, John Wiley & Sons Ltd, London, 1982.
[12]	B. Daulay, Techno-Economic Low Rank Coal Projects in Indonesia, PuslitbangTekmira,2008.
[13]	Direktorat Jenderal Mineral and Batubara, Statistik Batubara, Jakarta, 2012.
[14]	Direktorat Jenderal Minyak dan Gas, Statistik Minyak Bumi, Jakarta, 2012.
[15]	M. Huda, and S. Munir, Persiapan Semikomersial Pencairan Batubara, Puslitbang Tekmira, Bandung, 2008.
[16]	Menko Perekonomian, Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia (MP3-EI),Tahun2011-2025, 2011.
[17]	W.H. Miernyk,The Elements of Input-Output Analysis, Random House, New York, 1965.
[18]	W.H. Miernyk, Regional Analysis and Regional Policy, Oelgeschlager, Gunn &Hain, Publishers, Inc, Cambridge, Massachusetts, 1982.
[19]	S. Nazara, Analisis Input-Output, Lembaga Penelitian Fakultas Ekonomi, UI, 2005.
[20]	U.W. Soelistijo, "Beberapa Indikator Nilai Tambah Ekonomi Indonesia: Sektor Energi dan Sumber Daya Mineral (Several Indicators of the Indonesia Economy Added Value : Energy and Mineral Resource Sector) ," JurnalTeknologi Mineral dan Batubara, vol. 9,No.1, Januari 2013.
[21]	U.W. Soelistijo, and R. Damayanti, Waste Gases and Particulates Resulted from Briquette Combustion. Air Quality VIII, An International Conference on Carbon Management, Mercury, Trace Substances, SOx, NOx, and Particulate Matter, Arlington, VA, USA, October 24-27, 2011.
[22]	U.W. Soelistijo, R. Saepudin, T. Suseno, and S.Palamba, Economic evaluation of the NEDO (Japan) – BPPT (Indonesia) feasibility study on the Indonesia Banko coal liquefaction, Proceedings, the Coal Technology Association, "The 28th International Technical Conference on Coal Utilization & Fuel Systems", Sheraton Sand Key Hotel, Clearwater,Flrorida, USA, March 10-13,2003.
[23]	S.Wasaka, Coal Liquefaction Development in NEDO, IEA Coal Industry Advisory Board workshop, 2 November 2006, IEA Headquarters, Paris, 2006.

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APA Style

Ukar Wijaya Soelistijo, Aryo Prawoto Wibowo, Makmun Abdullah. (2013). The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025. Earth Sciences, 2(6), 149-157. https://doi.org/10.11648/j.earth.20130206.16

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ACS Style

Ukar Wijaya Soelistijo; Aryo Prawoto Wibowo; Makmun Abdullah. The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025. Earth Sci. 2013, 2(6), 149-157. doi: 10.11648/j.earth.20130206.16

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AMA Style

Ukar Wijaya Soelistijo, Aryo Prawoto Wibowo, Makmun Abdullah. The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025. Earth Sci. 2013;2(6):149-157. doi: 10.11648/j.earth.20130206.16

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@article{10.11648/j.earth.20130206.16,
  author = {Ukar Wijaya Soelistijo and Aryo Prawoto Wibowo and Makmun Abdullah},
  title = {The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025},
  journal = {Earth Sciences},
  volume = {2},
  number = {6},
  pages = {149-157},
  doi = {10.11648/j.earth.20130206.16},
  url = {https://doi.org/10.11648/j.earth.20130206.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.earth.20130206.16},
  abstract = {One of the objectives of the National Energy Policy (KEN) of Indonesiawhich is listed in Perpres (Presidential Regulation) number 5/2006 is the realization ofan optimal energy mix in 2025 by lowering oil consumption to 20% and increased utilization of coal to greater than 33%. KEN also mandates that more than 2% of national energy needs is derived from coal liquefaction process. This research aim is to analyze atthe economic impact and linkages among sectors using Indonesian 2005 Input-Output Table which will be projected to 2025 by entering low-rank coal synthetic oil (CSO) sector as a new classification. Econometric models (regression analysis) and linear programming are applied in this research. The result of economic calculation of investation in CSO plants indicates that on the coal price assumption of US$60/ton, synthetic coal oil price of US$111/bbl, and the interest rate (i) 5%, in general will give the Internal Rate of Return (IRR) is less than 10%. Analysis of backward linkages shows that the CSO sector will have a potential increasing a new output for the economy higher than the other energy sectors, but lower rate of forward linkage (downstream). Meanwhile, the multiplier effect indicates that the development of CSO plant is capable of moving national economy sectors equivalent to the petroleum refining sector and other energy provider sectors.The lower surplus multiplier shows that the investment in the CSO sector will be attractive if the government gives incentives on the enterprise, things such as regulation and investing financial support, tax incentives/tax holiday, price subsidies, and the coal  prices scheme arrangements.},
 year = {2013}
}

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TY  - JOUR
T1  - The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025
AU  - Ukar Wijaya Soelistijo
AU  - Aryo Prawoto Wibowo
AU  - Makmun Abdullah
Y1  - 2013/11/30
PY  - 2013
N1  - https://doi.org/10.11648/j.earth.20130206.16
DO  - 10.11648/j.earth.20130206.16
T2  - Earth Sciences
JF  - Earth Sciences
JO  - Earth Sciences
SP  - 149
EP  - 157
PB  - Science Publishing Group
SN  - 2328-5982
UR  - https://doi.org/10.11648/j.earth.20130206.16
AB  - One of the objectives of the National Energy Policy (KEN) of Indonesiawhich is listed in Perpres (Presidential Regulation) number 5/2006 is the realization ofan optimal energy mix in 2025 by lowering oil consumption to 20% and increased utilization of coal to greater than 33%. KEN also mandates that more than 2% of national energy needs is derived from coal liquefaction process. This research aim is to analyze atthe economic impact and linkages among sectors using Indonesian 2005 Input-Output Table which will be projected to 2025 by entering low-rank coal synthetic oil (CSO) sector as a new classification. Econometric models (regression analysis) and linear programming are applied in this research. The result of economic calculation of investation in CSO plants indicates that on the coal price assumption of US$60/ton, synthetic coal oil price of US$111/bbl, and the interest rate (i) 5%, in general will give the Internal Rate of Return (IRR) is less than 10%. Analysis of backward linkages shows that the CSO sector will have a potential increasing a new output for the economy higher than the other energy sectors, but lower rate of forward linkage (downstream). Meanwhile, the multiplier effect indicates that the development of CSO plant is capable of moving national economy sectors equivalent to the petroleum refining sector and other energy provider sectors.The lower surplus multiplier shows that the investment in the CSO sector will be attractive if the government gives incentives on the enterprise, things such as regulation and investing financial support, tax incentives/tax holiday, price subsidies, and the coal  prices scheme arrangements.
VL  - 2
IS  - 6
ER  -

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Author Information

Ukar Wijaya Soelistijo

University of Islam Bandung, Institute of Technology Bandung, Mineral and Coal Technology R&D Center, Bandung Indonesia
Aryo Prawoto Wibowo

Institute of Technology Bandung, Bandung Indonesia
Makmun Abdullah

Institute of Technology Bandung, Center for Education and Training Center for Mineral and Coal, Bandung Indonesia

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APA Style

Ukar Wijaya Soelistijo, Aryo Prawoto Wibowo, Makmun Abdullah. (2013). The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025. Earth Sciences, 2(6), 149-157. https://doi.org/10.11648/j.earth.20130206.16

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ACS Style

Ukar Wijaya Soelistijo; Aryo Prawoto Wibowo; Makmun Abdullah. The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025. Earth Sci. 2013, 2(6), 149-157. doi: 10.11648/j.earth.20130206.16

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AMA Style

Ukar Wijaya Soelistijo, Aryo Prawoto Wibowo, Makmun Abdullah. The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025. Earth Sci. 2013;2(6):149-157. doi: 10.11648/j.earth.20130206.16

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@article{10.11648/j.earth.20130206.16,
  author = {Ukar Wijaya Soelistijo and Aryo Prawoto Wibowo and Makmun Abdullah},
  title = {The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025},
  journal = {Earth Sciences},
  volume = {2},
  number = {6},
  pages = {149-157},
  doi = {10.11648/j.earth.20130206.16},
  url = {https://doi.org/10.11648/j.earth.20130206.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.earth.20130206.16},
  abstract = {One of the objectives of the National Energy Policy (KEN) of Indonesiawhich is listed in Perpres (Presidential Regulation) number 5/2006 is the realization ofan optimal energy mix in 2025 by lowering oil consumption to 20% and increased utilization of coal to greater than 33%. KEN also mandates that more than 2% of national energy needs is derived from coal liquefaction process. This research aim is to analyze atthe economic impact and linkages among sectors using Indonesian 2005 Input-Output Table which will be projected to 2025 by entering low-rank coal synthetic oil (CSO) sector as a new classification. Econometric models (regression analysis) and linear programming are applied in this research. The result of economic calculation of investation in CSO plants indicates that on the coal price assumption of US$60/ton, synthetic coal oil price of US$111/bbl, and the interest rate (i) 5%, in general will give the Internal Rate of Return (IRR) is less than 10%. Analysis of backward linkages shows that the CSO sector will have a potential increasing a new output for the economy higher than the other energy sectors, but lower rate of forward linkage (downstream). Meanwhile, the multiplier effect indicates that the development of CSO plant is capable of moving national economy sectors equivalent to the petroleum refining sector and other energy provider sectors.The lower surplus multiplier shows that the investment in the CSO sector will be attractive if the government gives incentives on the enterprise, things such as regulation and investing financial support, tax incentives/tax holiday, price subsidies, and the coal  prices scheme arrangements.},
 year = {2013}
}

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TY  - JOUR
T1  - The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025
AU  - Ukar Wijaya Soelistijo
AU  - Aryo Prawoto Wibowo
AU  - Makmun Abdullah
Y1  - 2013/11/30
PY  - 2013
N1  - https://doi.org/10.11648/j.earth.20130206.16
DO  - 10.11648/j.earth.20130206.16
T2  - Earth Sciences
JF  - Earth Sciences
JO  - Earth Sciences
SP  - 149
EP  - 157
PB  - Science Publishing Group
SN  - 2328-5982
UR  - https://doi.org/10.11648/j.earth.20130206.16
AB  - One of the objectives of the National Energy Policy (KEN) of Indonesiawhich is listed in Perpres (Presidential Regulation) number 5/2006 is the realization ofan optimal energy mix in 2025 by lowering oil consumption to 20% and increased utilization of coal to greater than 33%. KEN also mandates that more than 2% of national energy needs is derived from coal liquefaction process. This research aim is to analyze atthe economic impact and linkages among sectors using Indonesian 2005 Input-Output Table which will be projected to 2025 by entering low-rank coal synthetic oil (CSO) sector as a new classification. Econometric models (regression analysis) and linear programming are applied in this research. The result of economic calculation of investation in CSO plants indicates that on the coal price assumption of US$60/ton, synthetic coal oil price of US$111/bbl, and the interest rate (i) 5%, in general will give the Internal Rate of Return (IRR) is less than 10%. Analysis of backward linkages shows that the CSO sector will have a potential increasing a new output for the economy higher than the other energy sectors, but lower rate of forward linkage (downstream). Meanwhile, the multiplier effect indicates that the development of CSO plant is capable of moving national economy sectors equivalent to the petroleum refining sector and other energy provider sectors.The lower surplus multiplier shows that the investment in the CSO sector will be attractive if the government gives incentives on the enterprise, things such as regulation and investing financial support, tax incentives/tax holiday, price subsidies, and the coal  prices scheme arrangements.
VL  - 2
IS  - 6
ER  -

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