Lesson Learned Energy Crisis from Europe

The energy crisis has hit many countries in the world. Indonesia is no exception. Indonesia as part of the largest Asian country in the southeast has a role in maintaining its natural resources and other efforts to overcome the effects of the current crisis, coupled with the conflict between Russia and Ukraine.

 

An energy crisis is a shortage (or price increase) in the supply of energy resources to the economy. These crises usually point to a shortage of petroleum, electricity, or other natural resources. This crisis has had repercussions on the economy, with many recessions and others. The conditions currently experienced by Indonesia related to the energy crisis are starting to be felt, this of course has a negative and positive impact on Indonesia.

 

The negative impact is to encourage an increase in commodity prices including the price of fuel oil (BBM), LPG, and also the basic electricity tariff (TDL).The Russia-Ukrainian war became the source of the world's energy and food crisis, which worsened the global economy after two years of being hit by the Covid-19 pandemic. The world is now facing an energy and food crisis. The geopolitical tensions between Russia and Ukraine are very influential on the global economy, as both have strategic roles in international trade supply chains. Russia is the world's second largest exporter of crude oil, while Ukraine is the world's largest exporter of sunflower seed oil.

 

The war between Russia and Ukraine has had a huge impact on the world, especially Indonesia as the world's largest energy supplier. There are many things that can be learned from Europe regarding the impact of this energy crisis, one of which is by diversifying Indonesia's energy and mineral sources so as not to depend on countries such as China and Russia. Britain has been very dependent on energy supplies from Russia. However, in the midst of the onslaught of the Russia-Ukraine war, which is still heating up and the sanctions imposed by Europe on Russia, this has an impact on energy supply.

Negative impact:
1.       Indonesia should not rely on countries like China and Russia controlling strategic aspects of the energy supply chain.
2.       Indonesia should not rely on a single supplier for fuel or technology. Europe has shown such chaos after they lost Russia's energy supply.

Positive impact:
1.       Provide great opportunities for Indonesia, especially in terms of state revenues. As illustrated by Non-Tax State Revenue (PNBP), which is mostly contributed by commodity revenues, until August 2021 alone, it has reached 93.1 percent of the target set in the APBN.
2.       Indonesia itself for electricity supply is in an independent condition because of the surplus of energy and abundant energy resources through coal and New Renewable Energy (EBT).
3.       Optimizing domestic energy potential so that it does not depend on imports including NRE and also the development of nuclear energy.
4.       Indonesia to maintain energy security by reducing dependence on the fossil energy market and carefully preparing for the transition to new and renewable energy.
5.       To get rid of dependence on only one energy source, Indonesia needs to:
a)              Diversify energy supply and increase efficiency.
b)              Increasing the renewable energy mix should also consider energy storage over a long period of time.