A Book Summary of “Ekonomi Energi: Teori & Aplikasi”

After nine-year hiatus, Prof. Purnomo Yusgiantoro, Ph.D finally once more published his new masterpiece as an Indonesia’s energy economy expert. This time, he brought a young energy economy expert whom also his first son, Dr. Luky Yusgiantoro to collaborate together in creating a new book, titled “Ekonomi Energi: Teori Dan Aplikasi”. This book consists of ten chapters, with each chapter bring different fundamental theories, the most updated data and fascinating issues in energy economics that could be a reliable reference for academics, practitioners as well as stakeholders.

The first chapter presents the introduction of the energy economics, which then leads to the description of why most of the energy market is imperfect market. There are also some global issues related to the energy such as energy resources region seizure, UNCLOS, and energy price fluctuations. The second chapter presents the application of micro-economy for the energy sector, such as the supply and demand model, cobweb theory, and non-equilibrium market. In addition to the previous chapter, the third chapter brings macroeconomic in the energy sector, such as the relationship between energy sector with the Gross Domestic Product (GDP), Gross National Product (GNP), various types of inflations, Gini index and exchange rates. The fourth chapter consists of various theories of production as well as energy costs such as production function, Constant Elasticity of Substitution (CES) using Cobb-Douglas function, energy depletion theories both for the non-renewable (Hotelling Theory) and renewable energy using (Maximum Sustainable Yield). The fifth chapter brings new studies about the economic criteria to measure the risk and uncertainty of energy investment such as Net Present Value (NPV), Rate of Return (RoR) and Payback Period (PB). The sixth chapter consists theories of investment financing in the energy sector, such as Weighted Average Cost Of Capital (WACC) and the scheme explanation of Public–Private Partnership. In the seventh chapter, there are explanations on how economy energy approaches the environmental impact that caused by the energy industry as well as energy conservation in each sector. Next, the eighth chapter delivers the industry into the energy economy perspective. The chapter also includes the difference between State-Owned (BUMN) and Private Owned Enterprises (BUMS) especially in their decision-making system as well as the explanation of Product Life Cycle and Technology Life Cycle inside the energy sector. The ninth chapter shows how the stakeholders determined the optimum energy pricing for both upstream and downstream industry. It also contains the explanation about the various types of price subsidy to the definition of the petroleum fund. The last chapter, tenth chapter, consists of the overview of the most updated conditions in global energy markets such as global oil supply, oil price information system, global oil crisis, as well as oil and gas investment.

If you have any questions regarding this book, you may contact the PYC publication team at: publication@purnomoyusgiantorocenter.org.

Prof. Purnomo Yusgiantoro, Ir., M.Sc., M.A., Ph.D.

Purnomo Yusgiantoro is the Founder of the Purnomo Yusgiantoro Center (PYC). He received his bachelor degree (Ir) in Petroleum Engineering from Institut Teknologi Bandung, Indonesia; MSc in Engineering from Colorado School of Mines, USA; MA in Economics from University of Colorado, USA; and PhD in Mineral Economics from Colorado School of Mines, USA. Since 2014, Purnomo dedicates much of his time, knowledge, and skills to teach the subject of energy economics at Institut Teknologi Bandung (ITB). Also, Purnomo is the Co-founder of Universitas Pertahanan (Unhan), Indonesia, where he teaches the subject of energy security until now. He is now a senior advisor for Executive Office of the President Republic of Indonesia.

He has vast experiences working and contributing in the energy and defense sector of Indonesia. He worked as a consultant for the World Bank and Asian Development Bank (ADB) in the field of energy economics and sustainable development. He also acted as the Chairman of Board of Commissioners for Pertamina. Purnomo also has held a position as Vice Governor of National Defense Agencies (Lemhannas). Purnomo was the Minister of Energy and Mineral Resources of Republic of Indonesia for three consecutive terms, from year 2000 until 2009. He also held the position of Minister of Defense of Republic of Indonesia between 2009 and 2014. In the global sphere, Purnomo served as the Governor of Organization of Petroleum Exporting Countries (OPEC) and its Secretary General as well as President, based in Vienna, Austria. He also carried the responsibility as the Chairman of the ASEAN Ministers of Energy Meeting (AMEM). He continues his devotion to the energy sector development by establishing PYC in 2016.