Indonesia and its more than 260 million citizens are exposed to a climate which is mostly Tropical. The average temperature across the more densely populated islands of the archipelago is relatively stable today around 28 degrees Celsius year-round. Climate change projections at 2050 forecast that there would be 93 more days above 27.5°C under an RCP 8.5 scenario of global warming.

Considering the already hot temperatures, households in Indonesia use few cooling appliances so far. While as a foreign traveler you may get the impression that Air Conditioning is quite widespread in Indonesia, less than 5 percent of households have Air Conditioners installed, as depicted in the figure below. Looking at the same figure, you can notice that the vast majority of the Air Conditioners can be found in households at the very top of the income distribution, while middle class households still live mostly without them.

Refrigerator, Air Conditioning and Household distribution in Indonesia, according to income – 2012 figures

Refrigerators are a more basic appliance and are thus more common, but not as much as one could expect. Again, the ownership rates still depend strongly on income and only 35 percent of households on average do have a refrigerator at home. The ownership curve is clearly steeper than the one for Air Conditioning, s-shaped but surprisingly flattens out at a 70 percent ownership rate at the very top of the income distribution.

Thinking about the prospects of future cooling demand, two major factors will be at play. First, demand for AC and refrigerators is highly dependent on income growth. With sustained economic growth, ownership rates are likely to grow along an s-shaped path with possibly higher growth rates expected for high income households. Second, it will be critical to see how households actually react to changing climate conditions.

Within Energy-a we are currently combining climate data analyses with household survey data to shed light on this aspect, and we will post the first results in Spring 2019.