The 18th AIM International Workshop
National Institute for Environmental Studies - Japan

Indonesia Low Carbon Emission Development
Strategy Scenario 2020 & 2050 in Energy Sector
14-16 December, 2012

Dr. Retno Gumilang Dewi, Dr. Ucok Siagian,and Prof Dr Rizaldi Boer

INSTITUT TEKNOLOGI BANDUNG (ITB)
INSTITUT PERTANIAN BOGOR (IPB)

Outline• Introduction• Development of The Scenario• Simulation Results• Policy Gap Analysis• Concluding Remarks

2Introduction
 This presentation discusses LCEDS in Energy Development Scenario 2020 & 2050
 LCEDS is usually intended to assess long-term vision. Particular emphasis of this
discussion is to be the short-term scenario (up to 2020) to address the options
for achieving GHG emission reduction target in conjunction with National Action
Plan for GHG emissions reduction to meet the GOI non-binding commitment toreduce emissions 26% below Indonesian baseline projection in 2020 of the SNC.
 Power generation sector is discussed in more detailed as there is a new planthat intends to revise power development plan (more coal compared to previousplan (RUPTL 2009-2018) will be deployed gradually by 2020).
 The baseline of power sector in the SNC is projected based on RUPTL 2009-2018.
It is necessary to investigate the impact of this revised plan, if implemented, tothe achievement of emission reduction target of energy sector set in National
Action Plan and mitigation actions need to be undertaken to achieve the target.
 Policy gap analysis and recommendation relevant to the achievement of the RAN
GRK target are also addressed in this study.

GHG Emissions level

Introduction
Baseline
Reduction target(non bindingcommitment, 26%)
Emission level target
2005
Sector2020
Emission Reduction (Giga ton CO2e)
26%

15%

Total(41 %)Forestry and Peatland

0.672

0.367

1.039

Waste

0.048

0.030

0.078

Agriculture

0.008

0.003

0.011

Industry

0.001

0.004

0.005

Energy

0.038

0.018

0.056

Total

0.767

0.422

1.189

Development Scenario• Business as Usual (BAU) Scenario and Mitigation (M) Scenarios• The BAU 2050 scenario is the projection of snapshot of what
would happen and be achieved in 2050 as the results of futureenergy sector development up to 2050.
• The BAU assumes that the existing society orientation, technology
deployment, and economic condition will continue until 2050.
• The BAU 2020 scenario assumes that the current trend ineconomy, social orientation as well as technology deployment inenergy sector will continue until 2020.
• The mitigation scenarios for the BAU 2020 i.e. the M1 and M2
scenarios, assume that there will be changes in technology
deployment orientation in the future.

• There is new plan to attempt to improve the economics of power
generation by revising the master plan by installing more coal
power (share of coal would increase to 65% in 2018 from 53%
according to previous plan that is used as baseline in the SNC).
• Adding more coal plants obviously will lead to higher GHG level,
which is in-opposite with national mitigation action plan objective.
• As energy sector has already had a target of GHG emission levels(0.038 Gton) in 2020 from the baseline. The baseline of power
sector in the SNC is projected based on the RUPTL 2009-2018.
• The new plan to revise the RUPTL 2009-2018 may alter theestimates of GHG emission level of the 2020 baseline of the SNC.

Socio Economic Assumptions
Population: 219 million (2005), increase with 1.03%/year (20052020); and 0.89%/year (2020-2050).
GDP growth: 6% (2005–2010), 6,5% (2010-2020), 7% (2020-2050).
Socio Economic Parameter
Population, Million
Person per household
GDP (at constant price 2000), trillion IDR
GDP per capita, million IDR
Gross output, trillion IDR- Primary- Secondary- Tertiary (commercial)
Passenger Trip Generation (Ptg), trips
Passenger-transport demand, billion psg km
Freight-transport demand, billion ton km

Base Year
2005
219
3.68
1,787
8.152
3,533
329
1,953
1,251
3.6
1,763
274

Target Year2020261
3.68
4,572
17.51910,657
629
4,506
5,522
3.6
2,145
1,062

Target Year
2050
327
3.3
30,24492.50870,490.1
4,157
29,80736,525
3.3
2,463
7,022

Mitigation Scenarios
For long term (2050), mitigation options are generally relatively
wide (efficiency measures to deployment of advanced technology
such electric cars fueled using renewable sources ,etc.)
This study is emphasized for relatively short (snapshot in 2020),
the mitigation actions to be included in the study are those
options that are likely readily applicable and deployable in thenear future such as energy efficiency measures.
M1 scenario: energy efficiency measures at the end-user sides.
M2 scenario: energy efficiency measures at the end-user sides +EE measures at the supply sides (generator and T&D network).

End-user energy efficiency measures, applied in M1 and M2

SectorEfficiency
Penetration
improvement of BAT
share ofRemarks
compared toBAT
existing device

Industry30%

10 – 30%

Commercial

15%

20 - 30%

Residential

10%

10 - 20%In the model thisefficiency improvement
varies, depend on thetype of device (notsectoral aggregate)

Note: Penetration share of BAT in industry sector 30% means that in2020 the technology (devices) used in the industry activities willcomprise 30% BAT and 70% existing technology (less efficient).

Simulation Results

Trillion IDR
80

Commercial

70

Cement60

Iron and Stel50

Other Industries
Construction

40

Chemicals
30

Textile, Wood, Paper

20

Food and Beverage

10

Mining and Quarying
Agriculture

2005

2020

2050

Gross output of production sectorSnapshots of population, GDP, energy demand and GHG
emissions development (BAU)
18Base16

2020

2050

Value of 2005=1141210
86420
Population

GDP

Final Energy
DemandGHG Emissions

Million ton CO2

GHG emissions by sector
7,000Power Generation
6,000

Tertiary Industries
Cement5,000

Iron and StelOther Industries
Construction

4,000

Chemicals
Textile, Wood, and Paper

3,000

Food and Beverage
Mining and Quarying

2,000

Agriculture
Households

1,000

Freight transport
Passenger transport

2005

2020BaU

2050BaU

1,6002,500

Commercial
Cement1,400

Iron and Steel
1,200

Milion toe

Million toe

Scenario 2050

2,000

Other Industries
Construction

1,000

Biomass

1,500

Geothermal

Chemicals
800

HydroPower

Textile, Wood, and Paper
Food and Beverage

600Natural Gas
1,000

Oil

Mining and Quarying
400

Coal

Agriculture
500

Households
200

Freight transport
Passenger transport

2005

2020BaU

2050BaU

Final energy demand projection

2005

2020BaU2050BaU

Primary energy supply mix

900
2,500
800
700
Biomass

600

Geothermal

500

Million ton CO2e

Million toe

Scenario of 2050 for Power generation

2,000

1,500

Natural Gas

HydroPower
400

Natural Gas

300

Oil
Coal200

Oil
1,000

Coal500100-2005
2005

2020BaU

2020BaU 2050BaU

2050BaU

Power generation by fuel type

GHG emissions of power sector

Scenario 2020
Table 1. Simulation results of the effect of ‘higher coal power’ to the SNC scenarios
Parameter
GDP (trillion IDR)
Population (million)
Energy demand (million toe)
Energy demand per capita (toe)Energy intensity (toe/million IDR)
Energy Elasticity
CO2 emission (million ton-CO2)*
Carbon Intensity- Ton CO2 per capita- Ton CO2 per million IDR

2005
Base Year
1,787
219
115.3
0.5
63.6
290
3.6
208

*It does not include CO2 emission from fugitives

2020 (SNC projection)
BaU
M1
M2
4,572
4,572
4,572
261
261
261
307
299
299
1.2
1.1
1.1
67.2
65.3
65.3
1.06
1.03
1.03
949
915
897
3.6
208

3.5
200

3.4
196

Effect of higher coal in 2020
BaU
MR1
MR2
4,572
4,572
4,572
261
261
261
307.3
298.7
298.7
1.2
1.1
1.1
67.2
65.3
65.3
1.06
1.03
1.03
977
915
906
3.7
214

3.5
200

3.5
198

350

Commercial
Cement300
Iron and SteelOther Industries

250

Million toe

MillionTOE

Final Energy Demand 2020
350

300

250

Construction
200

Chemicals

150

Textile, Wood, andPaper
Food and BeverageElectricity
200

Biomass
Natural Gas

150

Oil

Mining and Quarying
100

Agriculture

Coal100

Households
50

Freight transport50Passenger transport
2005 2020BaU 2020M1 2020M2by Sector

2005

2020BaU 2020M1by Fuel Type

2020M2

Million toe

Primary Energy Supply by Type of Energy
450
400
350
Biomass300

Geothermal

250

HydroPower

200

Natural Gas

150

Oil
Coal

100
50
2005

2020BaU

2020M12020M2

900

1,000

Power Generation

1,000

902

Tertiary Industries
Cement800

Iron and StelMillilion tonCO2

million tonCO2

CO2 Emission 2020

900
800

natural gas
700

oil

600

coal

700

Other Industries

600

Construction

500

Chemicals

400

Textile, Wood, andPaper
Food and Beverage

400

Mining and Quarying

300

200

Agriculture

200

100

Households

300

902

500

100

Freight transport

2005

2020BaU 2020M1 2020M2

CO2 Emissions by Sector

Passenger transport

2005

2020BaU

2020M12020M2

CO2 Emissions by Fuel TypeEffect of the revised power development plan to the amount of GHG
that have to be reduced from the “higher coal in power” scenario“Higher coal in power” scenario

GHG Emissions levelBaseline

Revised reduction target
Reduction target

902
Emission level target (to meetgovernment emission reductioncommitment)

2005

Type of energy
CoalOilNatural gashydrogeothermal

2020

Base year 2005
40.7%
30.6%
15.1%
8.4%
5.2%

RUPTL 2009-2018
53%
4%
26%
10%7%

Revised PLN plan*
65%
3%
20%
5%
7%

Revised PLN Plan

Million ton CO2-e

CO2 Emissions Power Sector
450400350300

natural gas
oilcoal

250
200
150
1005002020BaU

2020BaU Higher Coal

Mitigation Scenarios
for “Higher Coal Power”

Efficiency measures (end-user and supply sides+
transport mode shiftEnd-user energy efficiency measures, applied in M1 and M2

SectorEfficiency
Penetration
improvement of BAT
share ofRemarks
compared toBAT
existing device

Industry30%

10 – 30%

Commercial

15%

20 - 30%

Residential

10%

10 - 20%In the model thisefficiency improvement
varies, depend on thetype of device (notsectoral aggregate)

Note: Penetration share of BAT in industry sector 30% means that in2020 the technology (devices) used in the industry activities willcomprise 30% BAT and 70% existing technology (less efficient).

Change of transport mode
100%

Modal share

90%
80%

Airplan70%

Bicycle

60%

Walk

50%

Ship

40%

20%

19%

10%

Small Vehicle30%

Large Vehicle

20%
10%
0%

Motorcycle

20%
15%
2%
2005

15%
2%
2020 Higher
Coal

6%
2020M2(R)

BusTrainMillion tonCO2-e

GHG emissions 2020, Higher Coal and Mitigations
1,000

902

900

Power Generation
Tertiary Industries

800

Cement700

Iron and Stel600

Other Industries

500

Construction
Chemicals

400

Textile, Wood, and Paper

300

Food and Beverage

200

Mining and Quarying

100

Agriculture

0Households
2020BaU

2020BaU 2020 M1(R) 2020 M2(R)Higher Coal

Freight transport

Policy Gap Analysis
The target of National Action Plan For Reducing GHG Emissions could beachieved through Energy Efficiency (EE) measures in supply/demand side.
Demand side EE could be implemented when following conditions prevail:• Efficient appliances are available and relatively easy to access• Producers have technical & financial capability to produce eff. appliances• Producers have the needed drive to produce efficient appliances (there isa market demand of their product)• Energy users have the drive to safe energy.
• Energy consumers have financial capacity to acquire efficient appliances(usually expensive)
Supply side EE could be implemented when following conditions prevail:• There is an economic drive or stimulant for power generators to improve
efficiency. Under current subsidy system such drive may not exist• Strict regulation that prevent construction of less efficient power plant.
The GOI should set minimum thermal efficiency for new power plants

Gap of policy to implement energy efficiency measures exists. To close thegap, the following recommendation may be considered:
In demand side, the following policy/regulations are recommended:• To ensure the use of efficient energy appliances, introduce incentive
packages for energy consumer such as help for financing of expensive but
efficient appliances.
• Introduce building codes that promote energy efficiency: make the use ofefficient appliances & energy efficient design as requirement forconstruction approval.
•••

Introduce EE as a major criteria in rating of industrial environmental compliance
Strengthen capacity of government officials in EE arena such as in evaluating andinspecting the efficiency of energy systems and energy audit document reported
by industry&building sector; the government officials that need to be strengthen
is not limited to energy ministry but also for officers at other ministry that deals
with energy related issues such as ministry of environment, ministry of public
works, ministry of industry, ministry of finance etc.
Introduce energy pricing policy that promotes energy efficiency: gradual removal
electricity and oil subsidies.

In the supply side, the following policy/regulations arerecommended:• Introduce regulations for power sector that will increase theefficiency of power plant by making a mandatory to use best
available technology in new coal power plant construction;
new coal power plants options include circulated coal
fluidized bed combustion (CFBC), sub- or super-critical coal
power plants; stoker-type coal power system may need to bephased out; this regulation should apply to PLN and IPP as
well as to industry that generate their own electricity• Introduce regulations that would force the electricity
company continuously to reduce technical losses at theirtransmission and distribution systems e.g. by using higher
voltage transmissions lines and improvement of transformer
at the power substations.

Concluding Remarks• This study shows long term BaU scenario of what would be happen in 2050 as
the results of future energy sector development up to 2050.
• The increase of GHG emission due to revised plan in power generation would
be in opposite direction to the GOI commitment to reduce GHG emission in2020 as stated in National Action Plan
 “higher share of coal power“ would result in emission level of 0.975Gton
CO2 (2020), which is 0.028Gton higher than the emission in 2020.
 To achieve GHG emission reduction target of 0.038 Gton in 2020 moreemission reduction efforts have to be made.
• Next research plan is to complete the development of: Mitigation scenario for 2050 by considering new plan in power sector End use model for 2020, to identify required technology and cost to meetnational mitigation action plan, if higher share of coal power is implemented
 CGE model for 2020 and 2050 scenario to shows short term and long term
impacts of mitigation actions to the economic conditions of Indonesia

Thank You
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