Reducing Economic Disparity in the Outermost and Border Regions: Assessing Barriers and Opportunities in the Electricity Sector

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Reducing Economic Disparity in the Outermost and Border Regions: Assessing Barriers and Opportunities in the Electricity Sector

Authors
  • Arisaktiwardhana, Dhandy
  • Akbar, Iqbal
Type
Published Article
Journal
E3S Web of Conferences
Publisher
EDP Sciences
Publication Date
Dec 21, 2018
Volume
73
Identifiers
DOI: 10.1051/e3sconf/20187301001
Source
EDP Sciences
Keywords
Disciplines
  • Energy Planning, Policy, and Management
License
Green
External links

Abstract

Economic disparity is still a major problem threatening Indonesia’s future prosperity. Spatial inequality between rural and urban areas remain to exist and is driven by unequal access to and unaffordable cost of the traditional electricity infrastructures. The national electrification ratio reached 91.16 % in 2016. This paper evaluates the feasibility of reforming existing regulations for Indonesia's electricity sector in its light to reduce economic disparities between-regions and intra- regions in Indonesia. A systematic review of the literature on the publications and research reports is used to provide inputs for revising the regulations of the electricity sector to address more focused mission-oriented objectives. Empirical models are discussed and established to predict the cost-saving from the reduction of CO2 emission by applying the technological solutions for renewable energy and energy efficiency. This study finds a cost-saving of Rp. 135 trillion per 40.000 hours-use for the whole electricity consumers in Indonesia that can be converted into financial instruments to support the development of electricity infrastructure in the disadvantaged regions. In the end, the study concludes that there is a clear financial benefit, in the form of opportunity cost, for reforming narration of the electricity policy and further transforming the institutional arrangement.

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