LAPSE:2019.0713
Published Article
LAPSE:2019.0713
Low-Carbon Energy Development in Indonesia in Alignment with Intended Nationally Determined Contribution (INDC) by 2030
Ucok W.R. Siagian, Bintang B. Yuwono, Shinichiro Fujimori, Toshihiko Masui
July 26, 2019
This study analyzed the role of low-carbon energy technologies in reducing the greenhouse gas emissions of Indonesia’s energy sector by 2030. The aim of this study was to provide insights into the Indonesian government’s approach to developing a strategy and plan for mitigating emissions and achieving Indonesia’s emission reduction targets by 2030, as pledged in the country’s Intended Nationally Determined Contribution. The Asia-Pacific Integrated Model/Computable General Equilibrium (AIM/CGE) model was used to quantify three scenarios that had the same socioeconomic assumptions: baseline, countermeasure (CM)1, and CM2, which had a higher emission reduction target than that of CM1. Results of the study showed that an Indonesian low-carbon energy system could be achieved with two pillars, namely, energy efficiency measures and deployment of less carbon-intensive energy systems (i.e., the use of renewable energy in the power and transport sectors, and the use of natural gas in the power sector and in transport). Emission reductions would also be satisfied through the electrification of end-user consumption where the electricity supply becomes decarbonized by deploying renewables for power generation. Under CM1, Indonesia could achieve a 15.5% emission reduction target (compared to the baseline scenario). This reduction could be achieved using efficiency measures that reduce final energy demand by 4%; This would require the deployment of geothermal power plants at a rate six times greater than the baseline scenario and four times the use of hydropower than that used in the baseline scenario. Greater carbon reductions (CM2; i.e., a 27% reduction) could be achieved with similar measures to CM1 but with more intensive penetration. Final energy demand would need to be cut by 13%, deployment of geothermal power plants would need to be seven times greater than at baseline, and hydropower use would need to be five times greater than the baseline case. Carbon prices under CM1 and CM2 were US$16 and US$63 (2005)/tCO₂, respectively. The mitigation scenarios for 2030 both had a small positive effect on gross domestic product (GDP) compared to the baseline scenario (0.6% and 0.3% for CM1 and CM2, respectively). This is mainly due to the combination of two assumptions. The first is that there would be a great increase in coal-fired power in the baseline scenario. The other assumption is that there is low productivity in coal-related industries. Eventually, when factors such as capital and labor shift from coal-related industries to other low-carbon-emitting sectors in the CM cases are put in place, the total productivity of the economy would offset low-carbon investment.
Keywords
Asia-Pacific Integrated Model/Computable General (AIM/CGE) model, economic development impact, efficiency measures, greenhouse gas emission reduction, Indonesia, Intended Nationally Determined Contribution (INDC), low-carbon energy development, mitigation cost, renewable energies
Suggested Citation
Siagian UW, Yuwono BB, Fujimori S, Masui T. Low-Carbon Energy Development in Indonesia in Alignment with Intended Nationally Determined Contribution (INDC) by 2030. (2019). LAPSE:2019.0713
Author Affiliations
Siagian UW: Center for Research on Energy Policy, Institut Teknologi Bandung, Jalan Ganesha 10, Bandung 40132, Indonesia
Yuwono BB: Center for Research on Energy Policy, Institut Teknologi Bandung, Jalan Ganesha 10, Bandung 40132, Indonesia
Fujimori S: National Institute for Environmental Studies, 16-2 Onogawa, Tsukuba 305-8506, Ibaraki, Japan; International Institute for Applied Systems Analysis (IIASA), Laxenburg A-2361, Austria [ORCID]
Masui T: National Institute for Environmental Studies, 16-2 Onogawa, Tsukuba 305-8506, Ibaraki, Japan
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Journal Name
Energies
Volume
10
Issue
1
Article Number
E52
Year
2017
Publication Date
2017-01-05
Published Version
ISSN
1996-1073
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PII: en10010052, Publication Type: Journal Article
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LAPSE:2019.0713
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doi:10.3390/en10010052
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Calvin Tsay
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