Indonesia to push renewable energy: president

Yahoo News 15 Aug 08;

Stung by high oil prices, Indonesia plans to tap more into renewable energies and change course from a "nation that splurges" to one that saves, President Susilo Bambang Yudhoyono said Friday.

"The soaring prices of oil on the global level during these last six years have reminded us of the importance of safeguarding energy security in our homeland," Yudhoyono said in his annual state-of-the-nation address.

"We're raising the energy supply capacity through accelerated energy diversification, the utilisation of non-fuel oil alternative energy, including new and renewable energy such as micro-hydro, geothermal and biofuel."

Indonesia is Asia's only member of the Organisation of Petroleum Exporting Countries, but Jakarta is planning to pull out of the cartel at the end of the year as falling production has turned it into a net importer.

The vast archipelago enjoys some of the lowest domestic fuel prices in the region thanks to generous subsidies, feeding demand for cars and motorbikes while sucking state money away from welfare and infrastructure projects.

Yudhoyono's poll ratings ahead of elections next year have suffered since he authorised an average 30-percent domestic fuel price rise in May, but he appeared in no mood Friday to sidestep the energy debate.

"In addition (to tapping renewable energies), we must effectively save energy. Thus far, we have been a nation that splurges on the use of energy," he said, adding that he had ordered the creation of an "Energy Saving Tax Force."

"The whole of society is ... expected to save, whether in private offices or in households."

He said energy savings of 20 percent would free up 17.6 trillion rupiah (1.9 billion dollars) of state funds for other projects.

"This is a very significant amount as we can make use of it for the development of our education, health, infrastructure and even defence," the president said.

Yudhoyono also said the country would step up the capacity of power generation across the archipelago by 10,000 megawatts to gradually end an electricity supply crisis.

"God willing, by the middle of 2009, the power crisis on Java and Bali will begin to be overcome," he said.

Despite the fuel price rises, Indonesian new vehicle sales jumped 59 percent year-on-year and 11 percent month-on-month to 60,836 units in July, the Indonesian Car Assembler Association said Wednesday.

New vehicle sales rose nearly 50 percent to 353,501 from January to July, against 235,702 in the same time a year ago.