National Energy Board left in limbo
Amid the disappointing progress made toward energy-related targets set in the National Energy Policy (KEN), the National Energy Board (DEN) has found itself in limbo with no independent board members following the House’ rejection of all the candidates from the government in the middle of last year. Rumors are swirling that politicians are eyeing the vacant seats.
President Joko "Jokowi" Widodo should have appointed independent DEN members last year when the 2014-2019 members concluded their tenure. In January 2019, Jokowi proposed 16 names to participate in the House’s confirmation test. The House’s Commission VII was supposed to pick eight names, and yet, it rejected all the names, saying they were all unqualified for the job, requiring the government to repeat the selection process.1
Until today, the government has not proposed new candidates to the House, leaving the positions vacant. According to our source, the House deliberately rejected all the candidates because certain political parties wished to place their members who had lost in the 2019 legislative election on the board (see what we've heard).
The House also asked the government to strengthen the role and power of the DEN by revising the existing government regulation on the DEN and adding related regulations. The House argued the DEN's current power was limited, causing the board to fail to make significant progress toward many energy-related goals described in the KEN (see what’s more).
Such a power play is understandable due to the strategic position and power the board holds, tempting political parties to seek to control such influence. Headed by the President himself, the board has the power to design and revise the KEN – a policy framework that describes how the country will fulfill its national energy needs, decides which energy sources to develop and utilize and ensures the availability of energy reserves in the country.
Given the board's strategic position and power, especially if the House manages to increase its power later, the politicization of the posts is worrying, even more so if the appointed politicians are not up to the standard required by the regulation. A presidential regulation stipulates that the elected members for the board must, among other requirements, have energy-related professional experience and have been proposed by an academic institution, professional organization or association.2
President Susilo Bambang Yudhoyono established the DEN back in 2009 based on Energy Law No. 30/2007, a legal basis of Indonesia's energy policies both for the upstream and downstream sectors. The DEN is a governmental agency led by the president, vice president and the energy and mineral resources minister.
The DEN has 15 members, seven of whom are representatives of seven supporting ministries – the Finance Ministry, the National Development Planning Agency (Bappenas), the Transportation Ministry, the Industry Ministry, the Agriculture Ministry, the Research and Technology Ministry and the Forestry and Environment Ministry. The other eight are independent members representing five different stakeholders: academia, industry players, the technology sector, the environmental sector and consumers.
In 2014, the DEN released the 2014-2050 KEN, in which several targets were set for the period by the DEN and approved by the House. One of the DEN's primary responsibilities is to devise strategies to achieve such targets, called the National Energy Plan (RUEN), and to make sure related institutions, including state-owned electricity company PLN and state-owned oil and gas holding company Pertamina, are working together toward that goal.
The worst progress so far has been the government's performance in achieving the renewable energy target in the country’s energy mix. As stated in the KEN, renewable energy must constitute 23 percent of all energy production.
However, as of September last year, renewable power plants in Indonesia were only able to produce 7,292 megawatts (MW) of electricity or about 12.36 percent of the total capacity of all installed power plants – compared to 60.5 percent from coal-based power plants.3 The government needs to install additional renewable plants with a total capacity of 35 gigawatts (GW) until 2025 to achieve this target,4 which is very unlikely to occur as most of the power plants currently under development will use coal as a power source.5
Another challenge for KEN is to achieve a 100 percent electrification rate for the whole of Indonesia by the end of this year. Although currently, the national electrification rate has reached 98.86 percent as of last September,6 the remaining areas to electrify are mostly remote areas. For example, 27 percent of households in East Nusa Tenggara (NTT) still do not have access to electricity.
A government source said that after rejecting all 16 candidates for the DEN board, the House sent a letter to President Jokowi on July 12, 2019, asking that the government revise the Energy Law, particularly the section on DEN governance. Following this revision, the government can restart the selection process for independent DEN members.
The 16 candidates who participated in the July selection process then sent a letter to President Jokowi, questioning the House’s decision. They argued that the selection process should be completed first, and then the Energy Law could be revised.
Later, the House realized that it would take time to amend the Energy Law while the tenure of the 2014-2019 DEN members would come to an end. Once President Jokowi had named his Cabinet in November, therefore, House Commission VII urged the newly installed Energy and Mineral Resources Minister, Arifin Tasrif, to start an entirely new process for selecting the independent DEN members.
Complying with the House’s request, the Energy and Mineral Resources Ministry sent out letters to relevant stakeholders to nominate their DEN candidates. According to the source, the House also sent out letters in December requesting industry associations and education institutions to recommend new candidates.
Another source has said that the House's plan to restart the selection process was a scheme to accommodate politicians who lost in the 2019 general election and would likely nominate these politicians through the relevant institutions representing academics, industry players, the technology sector, the environment sector and consumers.
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