Presidential Regulation No. 5/2006 on National Energy Policy

1997 No. 23, Supplement to Statute Book No. 3676); energy sources, which will not naturally be used up and sustainable if managed properly, amongst others, 5. Law No. 22/2001 on Oil and Gas (Statute Book of geothermal, biofuel, river flow, solar heat, wind, bio-

2001 No. 136, Supplement to Statute Book No. 4152) mass, biogas, sea waves, and sea-depth temperature. as already amended by Decision of the Constitutional Council No. 002/PUU-1/2003 dated December 21, 6. Energy Diversification is diversification of supply and

2004 (State Gazette of the Republic of Indonesia No. exploitation of various sources of energy in the frame- work of energy supply optimization. 1/2005); 7. Energy Conversion is exploitation of energy efficiently 6. Law No. 27/2003 on Geothermal Power (Statute Book and rationally i,yithout reducing exploitation of im- of 2003 No. 115, Supplement to Statute Book No. portant energy, which is really needed. 4327); 8. Energy Elasticity is ratio bebNeen energy consump- 7. Law No. 25/2004 on National Development Planning tion and economic growth. System (Statute Book of 2004 No. 104, Supplement to Statute Book No. 4421); 9. Economic Price is cost of production of per unit of energy including c·ost of environment and cost of DECIDES: margin. Business News 7323/10-2-2006 CHAPTER ..... 26A CHAPTER II c. Stipulation of policy on energy price adjusted to- PURPOSES AND TARGETS OF ward economic price in consideration of the abil- NATIONAL ENERGY POLICY ity of small enterprises and aid to the poor within Article 2 a certain period. (1)The goal of the National Energy Policy is to direct d. Environmental conservation by application of sus- efforts to the creation of sufficiency of domestic en- tainable development principles. ergy supply. (3)The supporting policy as meant in paragraph (1) con- (2)Targets of the National Energy Policy are: sists of: a. Achievement of energy elasticity of less than one a. Development of energy infrastructure including (1) in 2005; increase of consumers access to energy; b. Creation of mix (printer) energy optimally in 2020, b. Partnership between government and business namely the role of each type of energy in na- world; tional energy consumption: c. Social empowerment; 1) Oil becomes less than twenty percent (20%); d. Development of research and development and 2) Gas becomes less than thirty percent (30%); education and training. 3) Coal becomes less than thirty-three percent (33%); Article 4 4) Biofuel becomes more than five percent (5%); (1)The Minister of Energy and Mineral Resources shall 5) Geothermal becomes more than fi'{e percent stipulate National Energy Management Blueprint af- (5%}; ter being discussed in the National Energy Coordi- 6) other new energy and renewable energy, par- nating Board. ticularly biomass, nuclear, hydropower, solar power, and wind power becomes more than (2)The National Energy Management Blueprint as meant five percent (5%); in paragraph (1) shall at least contain: 7) Liquified coal becomes more than two percent a. Policy regarding assurance of sufficiency of do- (2%). mestic energy supply; CHAPTER III b. Public service obligation policy; POLICY STEPS c. Management of energy sources and the exploita- Article 3 tion thereof. (1)The targets as meant in Article 2 paragraph (2) shall be achieved through main policy and supporting (3)The blueprint as meant in paragraph (1) shall be- policy. come foundation for arrangement of policy for de- velopment and exploitation of each kind of energy. (2)The main policy as meant in paragraph (1) consists of: CHAPTER IV a. Energy supply, by: ENERGY PRICE 1) Assurance of availability of domestic energy Article 5 supply; (1)Price of energy shall be adjusted gradually until a 2) Optimization of energy production; certain time toward its economic price. 3) Realization of energy conversion. b. Energy exploitation, by: (2)The gradual adjustment of price as meant in para- 1) Energy exploitation efficiency; graph (1) must create an optimal effect on energy 2) Energy diversification. diversification. Business News 7323/10-2-2006 {3) Further ..... 27A (3)Further provisions regarding energy price as meant (3) Further provisions regarding the giving of facilities in paragraphs (1) and (2) and support to low-eco- and incentives as meant in paragraph (2) will be stipu- nomic society as meant in Article 3 paragraph (2) lated in regulations of the relevant Ministers. clause c shall be realized pursuant tothe applicable laws. CHAPTER VI CLOSING PROVISIONS Article 7 CHAPTER V This Regulation shall be valid from the date it is FACILITIES AND INCENTIVES stipulated. Article 6 (l)The Minister of Energy and Mineral Resources shall Stipulated in Jakarta decide certain alternative energy sources: On January 25, 2006 THE PRESIDENT OF THE REPUBLIC OF INDONESIA (2)The government may give facilities and incentives to Sgd operators of energy conservation and developers of DR. H. SUSILO BAMBANG YUDHOYONO certain alternative energy sources as meant in para- graph (1). -===(E)===-