When people think about the smart grid — technology that brings things like power infrastructure into the digital age via computing, the Internet and automation — they generally think of affluent countries like the United States. But in fact the smart grid is becoming a part of everyday life around the globe, especially in Asia. Indonesia should be particularly poised to use smart grid technology to solve a myriad of challenges: poor energy infrastructure; unreliable power sources and environmental degradation.
The enormous changes in energy policy and strategy throughout Asia makes it a perfect time for Indonesia to embrace the smart grid. Consider just a few recent regional developments.
Indonesia is home to 40 percent of the world’s known geothermal resources and offers opportunities in wind, solar, biomass and hydropower. By 2025, one report states, Indonesia aims to install 6.7 gigawatts of new renewable energy capacity by increasing the proportion of renewables from 7 percent to 15 percent of total energy production.
While Indonesia’s geothermal energy capacity is estimated at 28 gigawatts, only 5 percent has been developed. There are proposals afoot to triple Indonesia’s electricity output by 2025 while reducing reliance on imported oil and switching to local coal, gas, and renewable and nuclear energy.
The changes come as both Indonesia and Asia in general experience considerable growth. The countries that make up the Asia-Pacific region hold about two-thirds of the world’s population and are set to become the largest economic region during the next two decades; by 2030, the Asian gross domestic product will eclipse that of the G-7 major industrial economies.
This demonstrates a clear need for strategies to generate, distribute and manage energy.
The smart grid is one of the answers. Why? It’s not just a digital meter that reads your personal power usage; it’s a new way of thinking about and using energy. If applied in Indonesia, smart grid technology could lead to far better regulation and use of power. This conserves precious natural resources and helps consumers save money.
Second, a smart grid system is far more attuned to potential energy problems or shortages and could prevent significant problems like blackouts or brownouts. Another advantage is that smart grid systems have the potential to allow Indonesian consumers to install solar panels, produce extra energy from their homes and save money if they create more than they use.
It won’t be easy. There are strategic challenges like increasing kilowatt-hours to support growth. And there are environmental challenges like lowering harmful emissions. But if used the right way, an intelligent infrastructure can help Indonesia by maximizing the energy life cycle from production to consumption. Just like hybrid cars maximize fuel efficiency to travel more effectively with less cost, countries that maximize their own energy efficiency can grow more effectively with less cost.
Smart grid capabilities in Indonesia will also help bring consumers (private, commercial or industrial) into the decision mix to balance supply and demand. Everyone needs to be involved when it comes to critical energy decisions affected by ecological pressures, natural disasters and even terrorism.
President Susilo Bambang Yudhoyono has asked Indonesian industrialists to take innovative initiatives in energy to answer the challenges of population growth in the country and the world. His support is crucial for Indonesia to capitalize on renewable energy. It shouldn’t stop there; we all should strive to become a world leader in smart grid technology.
It’s time to act so Indonesia’s future can be both prosperous and green. The county has inadequate energy infrastructure given its growth projections. Energy generation projections for Asian countries outstrip the global projections by a factor of almost three. Global generation is projected to increase by over 70 percent through 2030 while Asian countries are projecting an increase of 200 percent.
Indonesia shouldn’t be discouraged by these challenges — the time to act is now.
Sonita Lontoh is an executive at Trilliant, a venture-backed smart grid company in Silicon Valley. She is a graduate of MIT, UC Berkeley and the Kellogg School of Management. Follow her on Twitter @slontoh.