IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2018-02-23.html
   My bibliography  Save this article

Gas Monetisation Intricacies: Evidence from Indonesia

Author

Listed:
  • Dzikri Firmansyah Hakam

    (Centre for Energy, Petroleum and Mineral Law, and Policy. University of Dundee, Scotland, United Kingdom)

  • Ayodele O. Asekomeh

    (Department of Accounting and Finance, Aberdeen Business School, Robert Gordon University,United Kingdom)

Abstract

Indonesia s geographical spread as an archipelago results in a unique and sophisticated electricity distribution. Consequently, PLN, Indonesia s state-owned electricity company, faces several challenges in implementing a robust gas monetisation scheme given these peculiar features of Indonesia s electricity sector. We identify and evaluate the risks and critical issues regarding Indonesia s gas monetisation policy formulation and implementation, particularly the changing regulation and reforms of the past three decades. We surmise that a sound energy policy of gas investment and utilisation by PLN and other energy stakeholders is fundamental. This will manifest in sound business strategies, especially in addressing contractual difficulties and infrastructural deficiencies in securing long-term gas supplies for gas power plants. Some positive approaches are already being adopted by the Indonesian electricity sector stakeholders to tackle the challenges in gas transportation like small scale LNG, marine LNG and CNG but these efforts need to be consistently pursued over the planning horizon.

Suggested Citation

  • Dzikri Firmansyah Hakam & Ayodele O. Asekomeh, 2018. "Gas Monetisation Intricacies: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(2), pages 174-181.
    • Handle: RePEc:eco:journ2:2018-02-23
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/6005/3625
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/6005/3625
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shukla, P.R. & Dhar, Subash & Victor, David G. & Jackson, Mike, 2009. "Assessment of demand for natural gas from the electricity sector in India," Energy Policy, Elsevier, vol. 37(9), pages 3520-3534, September.
    2. Wamukonya, Njeri, 2003. "Power sector reform in developing countries: mismatched agendas," Energy Policy, Elsevier, vol. 31(12), pages 1273-1289, September.
    3. Dong, Jun & Zhang, Xu & Xu, Xiaolin, 2012. "Techno-economic assessment and policy of gas power generation considering the role of multiple stakeholders in China," Energy Policy, Elsevier, vol. 48(C), pages 209-221.
    4. Fernandes, Elton & Fonseca, Marcus Vinicius de A. & Alonso, Paulo Sergio R., 2005. "Natural gas in Brazil's energy matrix: demand for 1995-2010 and usage factors," Energy Policy, Elsevier, vol. 33(3), pages 365-386, February.
    5. Rachmatullah, C. & Aye, Lu & Fuller, R.J., 2007. "Scenario planning for the electricity generation in Indonesia," Energy Policy, Elsevier, vol. 35(4), pages 2352-2359, April.
    6. Khalilpour, Rajab & Karimi, I.A., 2012. "Evaluation of utilization alternatives for stranded natural gas," Energy, Elsevier, vol. 40(1), pages 317-328.
    7. Masten, Scott E & Crocker, Keith J, 1985. "Efficient Adaptation in Long-term Contracts: Take-or-Pay Provisions for Natural Gas," American Economic Review, American Economic Association, vol. 75(5), pages 1083-1093, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dzikri Firmansyah Hakam & Sudarso Kaderi Wiyono & Nanang Hariyanto, 2020. "Competition in Power Generation: Ex-ante Analysis of Indonesia’s Electricity Market," Energies, MDPI, vol. 13(24), pages 1-20, December.
    2. Noor Yusuf & Tareq Al-Ansari, 2023. "Current and Future Role of Natural Gas Supply Chains in the Transition to a Low-Carbon Hydrogen Economy: A Comprehensive Review on Integrated Natural Gas Supply Chain Optimisation Models," Energies, MDPI, vol. 16(22), pages 1-33, November.
    3. Dzikri Firmansyah Hakam, 2018. "Nodal Pricing: The Theory and Evidence of Indonesia Power System," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 135-147.
    4. Hakam, Dzikri Firmansyah, 2019. "Mitigating the risk of market power abuse in electricity sector restructuring: Evidence from Indonesia," Utilities Policy, Elsevier, vol. 56(C), pages 181-191.
    5. Hilda Hilmiyati-Mas’adah & Achmad Sudiro & Fatchur Rohman & Agung Yuniarinto & Dzikri Firmansyah Hakam & Herry Nugraha, 2023. "Assessing the Impact of Urban Lifestyle and Consumption Values on Conversion Intention: A Study towards Energy Sustainability," Sustainability, MDPI, vol. 15(8), pages 1-18, April.
    6. Satria Putra Kanugrahan & Dzikri Firmansyah Hakam & Herry Nugraha, 2022. "Techno-Economic Analysis of Indonesia Power Generation Expansion to Achieve Economic Sustainability and Net Zero Carbon 2050," Sustainability, MDPI, vol. 14(15), pages 1-25, July.
    7. Handrea Bernando Tambunan & Dzikri Firmansyah Hakam & Iswan Prahastono & Anita Pharmatrisanti & Andreas Putro Purnomoadi & Siti Aisyah & Yonny Wicaksono & I Gede Ryan Sandy, 2020. "The Challenges and Opportunities of Renewable Energy Source (RES) Penetration in Indonesia: Case Study of Java-Bali Power System," Energies, MDPI, vol. 13(22), pages 1-22, November.
    8. Siti Inayatul Faizah & Uus Ahmad Husaeni, 2018. "Development of Consumption and Supplying Energy in Indonesia s Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 313-321.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Hao & Geng, Hao-Peng & Ling, Hui-Ting & Peng, Song & Li, Nan & Yu, Shiwei & Wei, Yi-Ming, 2020. "Modeling the coal-to-gas switch potentials in the power sector: A case study of China," Energy, Elsevier, vol. 192(C).
    2. Dong, Jun & Zhang, Xu & Xu, Xiaolin, 2012. "Techno-economic assessment and policy of gas power generation considering the role of multiple stakeholders in China," Energy Policy, Elsevier, vol. 48(C), pages 209-221.
    3. Khan, Mohd Shariq & Lee, Moonyong, 2013. "Design optimization of single mixed refrigerant natural gas liquefaction process using the particle swarm paradigm with nonlinear constraints," Energy, Elsevier, vol. 49(C), pages 146-155.
    4. Dean V. Williamson, 2010. "Financial-Market Contracting," Chapters, in: Peter G. Klein & Michael E. Sykuta (ed.), The Elgar Companion to Transaction Cost Economics, chapter 24, Edward Elgar Publishing.
    5. Morgan Bazilian & Patrick Nussbaumer & Hans-Holger Rogner & Abeeku Brew-Hammond & Vivien Foster & Shonali Pachauri & Eric Williams & Mark Howells & Philippe Niyongabo & Lawrence Musaba & Brian Ó Galla, 2011. "Energy Access Scenarios to 2030 for the Power Sector in Sub-Saharan Africa," Working Papers 2011.68, Fondazione Eni Enrico Mattei.
    6. Bell, William Paul & Zheng, Xuemei, 2018. "Inclusive growth and climate change adaptation and mitigation in Australia and China : Removing barriers to solving wicked problems," MPRA Paper 84509, University Library of Munich, Germany.
    7. Karatayev, Marat & Clarke, Michèle L., 2016. "A review of current energy systems and green energy potential in Kazakhstan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 491-504.
    8. Mansoor Mustafa & Muhammad Omer Farooq Malik & Ahsen Maqsoom, 2024. "Barriers to Solar PV Adoption in Developing Countries: Multiple Regression and Analytical Hierarchy Process Approach," Sustainability, MDPI, vol. 16(3), pages 1-19, January.
    9. Luc Baumstark & Claude Ménard & William Roy & Anne Yvrande-Billon, 2005. "Modes de gestion et efficience des opérateurs dans le secteur des transports urbains de personnes," Post-Print halshs-00103116, HAL.
    10. Davor Dujak, 2017. "Mapping Of Natural Gas Supply Chains: Literature Review," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 17, pages 293-309.
    11. Singh, Anoop, 2006. "Power sector reform in India: current issues and prospects," Energy Policy, Elsevier, vol. 34(16), pages 2480-2490, November.
    12. Baoling Zou & Biliang Luo, 2018. "Why the Uncertain Term Occurs in the Farmland Lease Market: Evidence from Rural China," Sustainability, MDPI, vol. 10(8), pages 1-15, August.
    13. Ye, Bin & Yang, Peng & Jiang, Jingjing & Miao, Lixin & Shen, Bo & Li, Ji, 2017. "Feasibility and economic analysis of a renewable energy powered special town in China," Resources, Conservation & Recycling, Elsevier, vol. 121(C), pages 40-50.
    14. Mayer, Kyle J. & Teece, David J., 2008. "Unpacking strategic alliances: The structure and purpose of alliance versus supplier relationships," Journal of Economic Behavior & Organization, Elsevier, vol. 66(1), pages 106-127, April.
    15. Khalilpour, Rajab, 2014. "Multi-level investment planning and scheduling under electricity and carbon market dynamics: Retrofit of a power plant with PCC (post-combustion carbon capture) processes," Energy, Elsevier, vol. 64(C), pages 172-186.
    16. Rentizelas, Athanasios & Georgakellos, Dimitrios, 2014. "Incorporating life cycle external cost in optimization of the electricity generation mix," Energy Policy, Elsevier, vol. 65(C), pages 134-149.
    17. Carley, Sanya & Desai, Sameeksha & Bazilian, Morgan, 2012. "Energy-Based Economic Development: Mapping the Developing Country Context," Energy: Resources and Markets 123278, Fondazione Eni Enrico Mattei (FEEM).
    18. Navajas, Fernando H., 2008. "Infrastructure integration and incomplete contracts: natural gas in the Southern Cone," MPRA Paper 31025, University Library of Munich, Germany.
    19. Brian S. Klaas, 2003. "Professional Employer Organizations and Their Role in Small and Medium Enterprises: The Impact of HR Outsourcing," Entrepreneurship Theory and Practice, , vol. 28(1), pages 43-62, January.
    20. Erdogdu, Erkan, 2007. "Regulatory reform in Turkish energy industry: An analysis," Energy Policy, Elsevier, vol. 35(2), pages 984-993, February.

    More about this item

    Keywords

    gas monetisation; long-term gas supplies; gas transportation;
    All these keywords.

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2018-02-23. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.