Indonesia Energy Strategy : Short Term or Long Term ?

Wildly successful entrepreneurs, for example Jeff Bezos and Mark Zuckerberg, like to think long term. Long term mindset works not only in business, but also everything else. It works universal.

This is statement from Bezos as Amazon CEO in Amazon 1997 shareholder letter :

“We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.”

Other statements from Bezos in other occasions related to long-term thinking :

Well, if you’re long term oriented, customer interests and shareholder interests are aligned. In the short term, that’s not always correct. Also, we like to invent and do new things, and I know for sure that long term orientation is essential for invention because you’re going to have a lot of failures along the way

I ask everybody to not think in two-to-three-year time frames, but to think in five-to-seven-year time frames

bezos long term

Look at Amazon now. Amazon captures 45% market share of e-commerce retail in America. Amazon Web Service (AWS) captures around 40% in cloud service. Its revenue in 2016 reach almost $136 billion, from only $7 billion in 2004. Amazon Prime members is around 80 million people. Amazon is 5th Most Valuable Company on Earth with market capitalization $475 billion.

As I note in the beginning of article, long term mindset works not only in business, but also everything else. Lets analyze Indonesia energy strategy landscape over the next few years until 2025. As a long-term guideline, the Government of Indonesia’s National Energy Policy targets a 23 percent renewable contribution in primary energy in 2025 from the baseline of 4 percent in 2014.

The Real Question here is, is 23% enough for renewables ? Then why also government keep pushing coal to run around 30% ?

More efforts need to be made in terms of removing barriers in regulation and financing, and to improve the institutional and technical capacity to promote sustainable renewable energy investments.

Look at other countries effort for its renewable energy. China, that few years ago was still coal-based powered countries, now suddenly build tons solar power plant. China install 77,420 MW solar power plant.

Panda-Green-Energy-Full-Width-600x397
Panda Solar Power Plant in China

About 3 million home in California generates its electricity from solar.

chartoftheday_5188_california_outshines_other_states_in_solar_power_n

The scandinavia countries like Denmark and Sweden are even more ‘wild’ about renewable energy strategy, ambitious target for almost 100% run by renewables.

renewable-energy-scandinavia

Indonesia government and stakeholders related to energy still think that renewable energy such as solar and wind has very high capital cost. It’s true that the cost for building massive power plant for renewables are still high, but current development and massive capacity built by countries like China and Germany making renewable energy cost drop significantly.

Fast forward, I don’t think Indonesia can enjoy its current strategy if our country still focus on fossil fuel coal as main primary to support Indonesia energy demand.

 

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