Volume 2, Issue 6, December 2013, Page: 149-157
The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025
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
Received: Nov. 9, 2013;       Published: Nov. 30, 2013
DOI: 10.11648/j.earth.20130206.16      View  2593      Downloads  180
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.
Keywords
Energy Policy, Coal Liquefaction, Linkages, Multiplier, Linear Programming
To cite this article
Ukar Wijaya Soelistijo, Aryo Prawoto Wibowo, Makmun Abdullah, The Potential Share of Coal Liquefaction in the Indonesian Economy in 2025, Earth Sciences. Vol. 2, No. 6, 2013, pp. 149-157. doi: 10.11648/j.earth.20130206.16
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