Energy Policy 169 (2022) 113184

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Energy Policy
journal homepage: www.elsevier.com/locate/enpol

Implication of the Paris agreement target on Indonesia electricity sector

transition to 2050 using TIMES model
Nadhilah Reyseliani a, Akhmad Hidayatno b, Widodo Wahyu Purwanto a, *
a
Sustainable Energy Systems and Policy Research Cluster, Chemical Engineering Department, Faculty of Engineering, Universitas Indonesia, Depok, 16424, Indonesia
b
Industrial Engineering Department, Faculty of Engineering, Universitas Indonesia, Depok, 16424, Indonesia

A R T I C L E I N F O A B S T R A C T

Keywords: This study examines the transition of Indonesia’s electricity system 2020–2050 to achieve Paris Agreement target
Electricity system planning using TIMES model. Three scenarios, including Reference Case, Current Policy, and Paris Agreement are
Decarbonisation reviewed. Reference case system will be 77% dominated by unabated coal power plant, and Current Policy will
Paris agreement
only reduce its share by 10% in 2050. Furthermore, the emissions from these scenarios are still half of estimated
Net-zero emission
Policy
electricity emission in NDC due to different demand level between the policy target and current level indicating
Indonesia the ambition gap. Achieving well below 2◦ C long-term target, 50% of RE and 40% of IGCC-CCS in electricity
production are needed. There will be 48% increase in investment compare to reference case and constant
electricity production to current level. Uncertainty of carbon budget will not shift the emission peak or pene­
tration of solar PV utility-scale, but will greatly affect the deployment time, as soon as 2030 or as later as 2040,
and capacity of IGCC-CCS and the presence of BECCS up to 2050. Reform of Indonesia’s electricity system needs
to be carried out because of changes in technology and investment directions, the need to accelerate techno­
logical readiness, coupled with the current condition of market structure and electricity prices.

1. Introduction
The Paris Agreement at COP21 has become a significant step for the
world in tackling and adapting to the climate impact by maintaining the
global temperature rise below 2 ◦ C and encouraging all efforts to reduce
temperature rises to 1.5 ◦ C above the pre-industrial level in 2100 (IPCC,
2018a). To achieve this target, the remaining global carbon budget from
2020 is estimated at 1150 GtCO2 and 400 GtCO2 to achieve targets of
2 ◦ C and 1.5 ◦ C with a probability of success of 67%, respectively (IPCC,
2021). All forms of each country’s target ratifying the agreement were
set out in the Nationally Determined Contributions (NDC). This makes
the decarbonisation agenda or environmental factors, in addition to
socio-economic growth factors, become one of the main focuses in a
country’s long-term national strategy.
Several studies related to the evaluation of decarbonisation strate­
gies to achieve the Paris Agreement targets have been carried out.
Fragkos et al. (Fragkos et al., 2021) examined the integration of global
and national models from 11 major GHG-emitting economies, including
Indonesia, which aims to see the impact of transforming low-carbon
energy systems. A similar approach was also carried out by Roelfsema
et al. (Roelfsema et al., 2020). The main point of this study is that there
are gaps in the implementation and ambition of the NDC toward the
Paris Agreement. The NDC can only reduce the emission gap by
one-third from national climate policies toward the Paris Agreement
targets. den Elzen et al. (den Elzen et al., 2019) evaluated the synerg­
isation of current national policies with NDCs from G20 countries,
including Indonesia. The results shown by 6 countries already have
national policies that are in line or more to achieve NDC, but that does
not mean that the NDC already has sufficient ambition. A study that
evaluates the general characteristics of energy systems when they reach
global net zero emission from a technological, environmental, regional
and economic perspective from 177 countries was conducted by
DeAngelo et al. (DeAngelo et al., 2021). The modelling of the roadmap
towards net zero emission in the ASEAN electricity sector was carried
out by Handayani et al. (Handayani et al., 2022). In contrast to the
previous studies that reviewed several countries, there were several
studies conducted at national and sub-national levels in achieving their
decarbonisation targets. However, these studies about Portugal
(Amorim et al., 2014; Pina et al., 2013; Krajačić et al., 2011), China
(Chen et al., 2020), Europe (van Zuijlen et al., 2019), and Fiji Island
(Michalena et al., 2018) mainly focus on the technical aspect. A thor­
ough review which not only looked at the technology aspect, but also
policy was conducted by Capros et al. (Capros et al., 2014) and Knopf

* Corresponding author.
E-mail address: widodo@che.ui.ac.id (W.W. Purwanto).

https://doi.org/10.1016/j.enpol.2022.113184
Received 14 April 2021; Received in revised form 7 July 2022; Accepted 25 July 2022
Available online 8 August 2022
0301-4215/© 2022 Elsevier Ltd. All rights reserved.
N. Reyseliani et al.
Nomenclature
ICE Internal Combustion Engine
Coal SbC PP Subcritical Coal Power Plant
Coal ScC PP Supercritical Coal Power Plant
Coal USC PP Ultra-Supercritical Coal Power Plant
Coal IGCC PP Integrated Coal Gasification Combined Cycle Power
Plant
Coal SbC PP -CCS Subcritical Coal Power Plant with CCS
Coal IGCC PP-CCS Integrated Coal Gasification Combined Cycle
Power Plant with CCS
OCGT Open Cycle Gas Turbine
CCGT Combined Cycle Gas Turbine
CCGT-CCS Combined Cycle Gas Turbine with CCS
Hydro-LS Large Scale Hydropower Power Plant
Hydro-SS Small Scale Hydropower Power Plant
Geo PP-DS Dry Steam Geothermal Power Plant
Geo PP-SF Single Flash Geothermal Power Plant
Geo PP-ORC Organic Rankine Cycle Geothermal Power Plant
Bio-Comb + ST Biomass Combustion with Steam Turbine
Bio-LG + ICE Biomass Landfill Gas with Internal Combustion Engine
Bio-AD + GT Anaerobic Digester with Gas Turbine
Bio-Gasif + GT Biomass Gasification with Gas Turbine Power Plant
BECCS Bioenergy with CCS
PV Res-Mono Monocrystalline Residential PV
PV Res-Multi Multicrystalline Residential PV
PV Res-TF a-Si a-Si Thin Film Residential PV
et al. (Knopf et al., 2013) for EU case study. This study focuses on the
impact of limited technology and a delay in emission reduction efforts
until 2030 toward the decarbonisation pathway. A similar analysis was
carried out by Winning et al. (Winning et al., 2019) using the TIAM-UCL
optimisation model.
As a country that has ratified the Paris Agreement, Indonesia is
committed to reducing greenhouse gas emissions in 2030 by 29% on its
own and up to 41% with international support (MEF, 2017). This target
has not changed at all in the most recent documents submitted in 2021.
The energy sector is planned to contribute about 11% out of 29%
emission reduction from all sectors, which is equivalent to 1271–1355
MtonCO2-eq in 2030, assuming annual average energy-related emissions
growth from 2010 as the baseline is 6.7% (MEF, 2017). The contribution
of the energy sector to achieve this decarbonisation is stated in the
Government Regulation No. 79/2014 on National Energy Policy (NEP)
(First Nationally Determined Contribution Republic, 2016) and its de­
rivatives National Energy General Plan (NEGP) target in which new and
renewable energy (NRE) target in 2025 and 2050 are 23% and 31%. The
derived target for the electricity sector is contained in the National
Electricity General Plan 2019–2038. Similar to the energy sector, the
electricity sector is targeted to have an NRE mix of 23% and 28% in 2025
and 2028 (-623-97205-2-0 and General Electricity National Planning,
2021), which will further become the reference for the National Elec­
tricity Supply Business Plan (RUPTL) (MEMR, 2021).
Several studies that have discussed Indonesia’s decarbonisation
strategy have been carried out. Some of the literatures mentioned earlier
have included Indonesia as one of country in their multi-countries
models (Fragkos et al., 2021; den Elzen et al., 2019; Handayani et al.,
2022). However, because the scope is multi-countries, the review of
each country becomes less in-depth. A study that specifically discusses
Indonesia was carried out by Arinaldo et al. (Arinaldo et al., 2019). This
study evaluates mitigation efforts to achieve the Paris Agreement tar­
gets, which focused only on the role of coal power plant in the future for
the electricity sector. Roadmap for Indonesia’s electricity system was
reviewed by IESR (IESR, 2019) and Pratama and Dowell (2019) quite
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Energy Policy 169 (2022) 113184
PV US-CI(G)S CI(G)S Solar PV Utility-scale
Wind T-HS High-Speed Wind Turbine
Nuclear PP Nuclear Power Plant
PHS Pumped Hydro Storage
CAES Compressed Air Energy Storage
MSW Municipal Solid Waste
Technology Grouping
Coal Conventional Coal Power Plant (i.e., Coal SbC PP, Coal ScC
PP)
Coal (Adv) Advanced Coal Power Plant (i.e., Coal USC PP, Coal
IGCC PP)
Coal (w CCS) Conventional Coal Power Plant with CCS (i.e., Coal
SbC PP-CCS)
Coal (Adv w CCS) Advanced Coal Power Plant with CCS (i.e., Coal
IGCC PP-CCS)
Gas Gas Power Plant (i.e., Gas Engine, OCGT)
Gas (Adv) Advanced Gas Power Plant (i.e., CCGT)
Gas (Adv w CCS) Advanced Gas Power Plant with CCS (i.e., CCGT)
Biomass Biomass Power Plant other than BECCS (i.e., Bio-Comb +
ST, Bio-LG + ICE, Bio-AD + GT, Bio-Gasif + GT)
Geothermal Geothermal Power Plant (i.e., Geo PP-DS, Geo PP-SF,
Geo PP-ORC)
Solar Utility-scale Solar PV utility-scale (i.e., PV US-CI(G)S)
Solar Rooftop Solar rooftop PV (i.e., PV Res-Mono, PV Res-Multi, PV
Res-TF a-Si)
in-depth, but only limited to certain regions in Indonesia. The study
conducted by Sani et al. (2021) is also limited to specific regions in
Indonesia.
For this reason, this study was conducted to deepen the context of the
case study of the Indonesian electricity system from the existing multi-
country model, complement the limitations of the model used (Han­
dayani et al., 2022) by adding short-term operational aspects to
long-term planning, and capture the case study as Indonesia as a whole,
not just specific regions, and reviewing more technology options
involved in electricity system decarbonisation strategies. Some of the
questions that will be answered in this research include:
• Is there a pathway gap between the current electricity system, the
existing policy, and Paris Agreement target?
• Can Indonesia be more ambitious in achieving its decarbonisation
targets? If yes, how much the investment and the increase in elec­
tricity production cost be borne? And how do these findings compare
with the global trend?
• What are the policy gaps and recommendations that the government
could take to achieve these targets?
To answer these questions, a review of the roadmap, investment, and
emissions was carried out for three main scenarios, namely Reference
Case (RC), Current Policy (CP), and Paris Agreement (PA). RC shows
how Indonesia’s least cost electricity system planning was built. The CP
signifies the implementation of the NEP, NEGP, National Electricity
General Plan, and RUPTL, and the PA reviews the achievement of the
Paris Agreement. Because this study did not review the global climate
model, the PA scenario will use Indonesia’s carbon budget data from
(Robiou du Pont et al., 2017; van Soest et al., 2021). The electricity
system model will be built in the TIMES model with 24 timeslices
approach representing each day of the year and considering short-term
operations in long-term planning for a better understanding of the high
penetration of renewable energy systems in the electricity sector. In
addition, 27 power plants and 2 energy storages were considered in this
N. Reyseliani et al. Energy Policy 169 (2022) 113184

study.

2. Methodology

The overview of the Indonesia electricity sector model structure is

presented in Fig. 1. This system model is built in TIMES model. The
Integrated MARKAL–EFOM System (TIMES) is a model generator
developed by the IEA’s Energy Technology System Analysis Program.
The data handling process in TIMES is carried out by VErsatile Data
Analyst (VEDA), which consists of VEDA Front-End (VEDA_FE) and
VEDA Back-End (VEDA_BE), each of which processes input and output
data, respectively.
TIMES model is classified as partial equilibrium optimisation using a
perfect foresight approach with an objective function minimising the
total system cost using a linear-programming approach as shown Sup­
plementary Material (SM) A.1 (Pina et al., 2011). Using TIMES, the
system can be modelled on a wide-spatial-scale system ranging from
local, national, to multi-regional with a long-term time horizon (Loulou
and Labriet, 2008). Even though TIMES can model a long-term energy
system, the temporal aspects’ level of detail can be adjusted based on the
desired system through the user-defined time slice (Pina et al., 2011).
Therefore, the variability in both supply and demand can be considered.
The increasing number of time slices defined will impact the computa­
tional complexity. In contrast to other studies (Pina et al., 2011, 2013;
Gaur et al., 2019), which looked at countries that have 4 seasons, the
time slices in this study are simplified into 24 h, as shown in Fig. 2, to
represent the demand and renewable energy supply profile because the
difference in the demand load curve is not significant between months,
only 2% (PLN, 2020).
IEA-ETSAP has developed its model’s capability to directly consider
short-term operational decisions or dispatching in long-term capacity
expansion planning and investment decisions in its extension models
(Panos and Lehtila, 2016). Parameters considered include start-up time,
ramp rates, minimum load level, shut down time, minimum online and
offline time using a linear programming approach. In addition, in this
extension, partial load efficiency losses of the thermal power plant are
considered as the function of load which is described in maximum load
in which no more efficiency losses occur and minimum stable operation
load (Panos and Lehtila, 2016). TIMES model documentations can be
seen in (Panos and Lehtila, 2016; Loulou et al., 2016a, 2016b, 2016c,
2016d).
Fig. 2. Time slices in TIMES model.
3. Model description
In this section, a detailed discussion of the Indonesian electricity
system model’s development from 2020 to 2050 is carried out. The case
study is assumed to be a single region, thus, the interconnection of grids
among island is neglected.
3.1. Reference energy system (RES)
The electricity system reviewed in this study is described in Fig. 3.
There are 27 power plants and 2 energy storage technologies that are
competed in this model ranging from fossil power plants consisting of
coal, diesel, and gas, renewable energy technology such as geothermal,
hydropower, biomass, nuclear to variable renewable energy technology
such as solar (residential and utility scales) and large-scale wind. The
energy storage technologies are li-ion battery and pumped hydro storage
(PHS). BECCS in this study is assumed to start competing with other
technology in 2040 due to technology readiness (IPCC, 2018b).
3.2. Proposed scenario
There are three main scenarios, as shown in Table 1. Reference Case
(RC) represents the least cost power system with no specific climate
policies implemented. Current Policy (CP) describes the National Energy
Policy (NEP), the National Energy General Planning (NEGP) target,
National Electricity General Planning, and the National Electricity
Supply Business Plan (RUPTL) which has the mid-and long-term new
and renewable energy (NRE) target, including nuclear and renewable

Fig. 1. Model structure.

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Fig. 3. Indonesia RES for the electricity sector in TIMES model.

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Table 1
Overview of the modeled scenario.
Scenario Demand RE Penetration Emission
Projection

RC Constant Optimized Simulated

elasticity
CP Constant Back casting current Simulated
elasticity national policy
PA Constant Optimized Constrained (cumulative
elasticity emission)

energy, target in 2025, 2028, and 2050 which is about 23%, 28, and
31%, respectively (-623-97205-2-0 and General Electricity National
Planning, 2021; Presidential Decree No, 2014). PA is the scenario that
asses the electricity pathway to achieve the Paris Agreement target,
which is to maintain the earth’s temperature rise well below 2◦ C by
using the carbon budget from (Robiou du Pont et al., 2017; van Soest
et al., 2021). Considering that the carbon budget varies with the liter­
ature and the maintaned temperature level in this paper these variations
are described into three sub-scenarios, namely low-, med-, and
high-carbon budgets as shown in Table 2. The important assumption
taken in this paper is in changing the national carbon budget for the
electricity sector only. In extracting the carbon budget from all sectors to
the energy sector only, the baseline data and emission growth for each
sector from the NDC document (First Nationally Determined Contribu­
tion Republic, 2016). Then to see only the power generation sector in the
energy sector, the NEGP (Presidential Decree No, 2017) projection is
used to find the share of the power generation sector.
Later the three main scenarios will be evaluated against Indonesia’s
NDC in which in 2030, emissions from the energy sector are targeted at
1355 Mt CO2-eq or 1271 Mt CO2-eq without or with successive inter­
national assistance (First Nationally Determined Contribution Republic,
2016).
3.3. Input data
Natural resources potential, techno-enviro-economic, unit commit­
ment parameter, fuel price are adopted from the previous study (Rey­
seliani and Purwanto, 2021) and are shown in SM B. Based on the
previous study, learning rate is the exogenous parameter (formula in SM
A), and the discount rate used is 10% for all technologies and scenarios
throughout the modeled year. The demand projection is also updated as
shown in Fig. 4, using the econometric model by simplifying that income
elasticity for electricity demand remains constant at 1.09 (from the
historical trend), and the projection of GDP refers to MNDP (MNDP,
2019). The electricity demand in 2050 is 1030 TWh or equivalent to
3185 kWh per capita. The hourly demand profile is obtained from
IRENA (IRENA, 2017).
4. Results and discussion
4.1. Overall electricity system
4.1.1. Generation expansion planning and operational system
In the RC, the total system cost produced is 758 billion USD. Installed
capacity and electricity production (Fig. 5) show that until 2050,
Table 2
Sub scenario model for PA.
Sub Scenario References Carbon Budget (Mt)
2010–2050 2010–2100
Low-carbon budgeta Robiou du Pont et al. (2017) 23.792 29.299
Med-carbon budgeta Robiou du Pont et al. (2017) 31.921 43.073
High-carbon budget van Soest et al. (2021) 34.900
a
Exclude LULUCF.
Fig. 4. Electricity demand and GDP.
Indonesia’s least-cost electricity supply will still be dominated by coal
power plants. The renewable energy mix will increase to 24% in 2025
and remain constant until 2050. This trend is influenced by the pro­
jections of fossil fuel prices. The renewable energy mix is dominated by
geothermal and hydropower. Large-scale hydropower is installed at a
maximum build rate capacity. Solar PV utility-scale will be installed
significantly in 2045 for about 18 GW and will continue to increase until
25.5 GW in 2050. In this scenario, there will be 7 GW PHS to be installed
in 2050.
Based on current policy about the NRE mix, the RC fails to achieve
the target in 2050, which should be higher than 31%. Therefore, the
portfolio for achieving those targets is reviewed in the CP. The total
system cost generated is almost similar to RC, about 759 billion USD. To
achieve the 31% NRE mix target in 2050, the capacity of Solar PV utility-
scale increased to four times. As a consequence, the coal power plant
installed capacity in 2050 is 14 GW lower than in the RC, and 11 GW
PHS is installed to manage the higher penetration of solar PV utility-
scale.
The PA, which has a more aggressive emission target, generated 763
to 772 billion USD of the total system cost. The generation expansion
planning as shown in Fig. 5c is for the lowest carbon budget scenario to
achieve the Paris Agreement target. The difference generation expansion
planning among different carbon budgets will be explained later. The
significant differences with the two previous scenarios are the coal
power plant capacity and penetration of IGCC with CCS, Solar PV utility-
scale, and BECCS. No new coal power plant will be installed after 2025,
leaving 19 GW in 2050. In contrast, cleaner coal technology, IGCC with
CCS will start to penetrate in 2030 and make up to 40% of electricity
supplied in 2050. Solar PV utility-scale and BECCS will be installed in
2030 and 2040, respectively. These technologies will continue to
increased and make up 11% and 10% of electricity supplied, respec­
tively. The integration of solar PV utility-scale on a large scale has the
impact of changing operational systems as shown in SM C.1. In addition,
the integration of large-scale solar PV utility-scale causes the work of
energy storage to become more significant to suppress solar PV fluctu­
ations. This can be seen from the average suppression rate carried out by
PHS, which increased from 13 GW per hour in 2030 to 36 GW per hour
in 2050.
4.1.2. Investment and electricity production cost
The total investment, which means cummulative within modelled
years, for all scenarios is shown in SM C.2, and the investment mix in
2030 and 2050 are shown in Fig. 6. The total investment for both RC and
CP are almost the same throughout the modelled year initially from
about 5.5 BUSD to 26–30 BUSD in 2050. The coal power plant in these
scenarios has a significant impact on the total investment, as shown in
Fig. 6. Both RC and CP’s investment costs will be dominated by the coal
power plant for about 44–45% in 2030. Higher Solar PV utility-scale

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N. Reyseliani et al.
Fig. 5. Power plant installed capacity and generation in (a) RC, (b) CP, (c) PA*
*low-carbon budget scenario.
installed capacity in the CP results in 13% higher total investment
compared to RC. In the PA, there is a significant increase on the total
investment starting from 2040 to 2050 between RC and PA scenarios. In
2040, the investment increased by 28–50% and will become 42–75% in
2050. The total investment in 2050 for the PA is in the range of 37–45
BUSD. The share of investment cost in this scenario dramatically change
from the RC and CP. In 2030, geothermal investment cost will signifi­
cantly affect the overall investment, and later on, in 2050, the invest­
ment of IGCC with CCS, BEECS, and solar PV utility-scale will make up
to 31%, 20%, and 17% in 2050. The overall share of low carbon tech­
nology investment in 2050 is reaching 95%, leaving 5% for coal power
plants.
Based on Fig. 7, the electricity production cost in the RC and CP tends
to have a similar magnitude, in the range of 5.5–7.2 cents/kWh, and the
trend is to decline from 2020 to 2050, except for 2025 when the elec­
tricity production cost peak occurs due to peak coal price. Similar
magnitude shows that the increased NRE mix in 2050 has no significant
impact on the electricity production cost as the coal power plant is
substituted with solar PV utility-scale in which this technology has
competitive LCOE with coal. For PA, the electricity production cost
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Energy Policy 169 (2022) 113184
which initially in 2020 until 2035 has similar trend with RC and CP, will
tend to be constant beyond 2035. The electricity production cost in the
PA is in the range between 6.5 and 7.2 Cent/kWh. In 2050, 1.6 Cents/
kWh is the additional cost that must be borne to maintain the earth’s
temperature rising well below 2 ◦ C or even further.
4.1.3. Power sector related emission
Total CO2-eq emissions generated in various scenarios are shown in
Fig. 8. The RC shows that total emissions will continue to increase to 311
million tons of CO2-eq in 2030. The emission will increase exponentially
to reach 900 million tons of CO2-eq by 2050. A similar number with RC
is shown for CP, especially for emissions until 2040. Beyond 2045, CP
represents a 5–10% emission reduction compared to RC. The emission
generates from CP in 2050 is 804 million tons of CO2-eq. In the PA, the
emission is shown as the range of emitted emission each year starting
from 2030, which represent the various carbon budget possibility to
achieve the Paris Agreement target. Beyond 2030, the generation
expansion planning for different carbon budgets shows different result,
as shown in Fig. 9, resulting in a wider range of total emission emitted in
this scenario. However, the general similarity lies in the year of peak
N. Reyseliani et al.
Fig. 6. Investment in 2030 (inner circle) and 2050 (outer circle) for RC, CP, and PA.
Fig. 7. Electricity production cost.
emission, which is 2035 with 225–295 Mt CO2-eq emitted. This result
shows that the peak emission year does not depend on the amount of the
carbon budget but on what year solar PV become competitive to reduce
emissions from the electricity sector. Beyond 2035, decarbonisation of
the electricity system to achieve the Paris Agreement Target is took
place and the range of emission emitted is from 0 to 350 Mt CO2-eq or
equal to 61%–100% percent emission reduction compare to the RC in
2050 and the net zero emission for electricity system on low-carbon
budget scenario will be happened in 2050. This emission reduction is
equal to 34 to 52 USD/ton abatement cost from 2035 to 2050 and 21 to
27 USD/ton additional investment per avoided CO2-eq. This value is still
higher than the minimum carbon pricing set by GOI in 2021 (Law 7/
2021 about Harmonization of Tax Regulations).
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Energy Policy 169 (2022) 113184
Fig. 8. Total power sector emission in scenarios compare to NDC and Paris
Agreement target.
4.1.4. Carbon budget implication
The electricity production of selected technologies in various carbon
budgets is shown in Fig. 9. These technologies consist of coal power
plant, IGCC with CCS, solar PV utility-scale, and BECCS, which have
significant differences in the PA compared to RC and CP. As shown in
Fig. 9, electricity supplied from coal power plant varies significantly as
time goes by from every carbon budget number. In 2030, the electricity
supplied from coal for med- and high-carbon budget are almost at the
same level. After that, there is 3%–23% difference in coal power plant
production between these scenarios. A similar trend is also shown for
low- and med-carbon budget scenarios, in which initially the difference
N. Reyseliani et al. Energy Policy 169 (2022) 113184

capita in 2025 (MEMR, 2021). The difference in the level of demand

Fig. 9. Electricity production of coal power plant, advance coal power plant
with CCS, solar PV utility-scale, and BECCS in different PA carbon
budget scenario.
for coal power plant production is only 33% in 2030 and gradually in­
creases to 57% in 2050. The reverse trend will be shown for IGCC with
CCS in which due to different time of deployment. There will be 5 years
of delay penetration for IGCC with CCS as the carbon budget increases.
The low-carbon budget shows that IGCC with CCS will start to be
installed in 2030. Meanwhile, in the med- and high-carbon budget
scenarios, the IGCC with CCS will start to be installed at 2035 and 2040,
respectively. In 2035, the difference in IGCC with CCS electricity pro­
duction between low- and med-carbon scenarios is 87%. This difference
will be reduced to − 10% as the installed capacity in the med-carbon
budget scenario increases and overlap the low-carbon budget scenario
in 2050. The overlapping is due to the emission reduction effort in the
low-carbon budget being offset by BECCS. A similar difference from 30%
to 10% in 2030 and 2050 between mid- and high-carbon budget sce­
narios is shown for IGCC with CCS technology. BECCS technology is only
installed in low- and med-carbon budget from 2040 to 2045, respec­
tively. The high-carbon budget scenario indicates no need for BECCS
deployment for a certain level of carbon budget to achieve the Paris
Agreement target until 2050. For low- and med-carbon budgets, the
installed capacity for BECCS are 7.7 GW and 1 GW in 2045. The capacity
for low-carbon budget increased two times, while in the med-carbon
budget scenario remains constant in 2050. This technology deploy­
ment equals to 154% and 176% difference between these scenarios in
2045 and 2050, respectively. Meanwhile, for the solar PV utility-scale,
there is no significant difference in terms of electricity produced every
year for every scenario.
4.2. Policy gaps
projection between the current condition, NEP projection, and RUPTL
projection is explained in the RUPTL 2021 and is indicated by the
decline in the historical elasticity of the electricity sector because of the
current development of business sectors that do not use much electricity
(MEMR, 2021). This low past elasticity trend is made worse by the
presence of COVID-19, which reduced economic growth and electricity
demand. Therefore, the power sector-related emission in 2030 will be
achieved the estimated NDC due to the impossibility of achieving the
electricity sector development targets according to the NEP.
The current policy in this study is based on the current NRE mix
target, which is stated in NEP, NEGP, National Electricity General
Planning, and RUPTL. According to the RC result, as shown in Fig. 5, the
NRE mix shows almost similar result to the CP, which means the CP is
still adapting the least cost system without focusing on the decarbon­
isation strategy. NRE target seems not strong or ambitious enough to
represent the effort to reduce emissions. As in Fig. 8 does not result in
significant emission reductions from RC. Similar to the RC, emission in
2030, which is 310 Mt CO2-eq, is still lower than NDC.
The Paris Agreement target, which was evaluated in this paper, is
based on the national carbon budget from integrated model literatures
that provide information for Indonesia’s carbon budget to achieve well
below 2 ◦ C by 2100. The emission trajectory is obtained from the opti­
misation result as the cumulative emission is constrained. As it can be
seen from Fig. 8, different levels of emission in 2030 between NDC and
the Paris Agreement target may indicate the incompatible of the current
NDC target with the national carbon budget to achieve the Paris
Agreement. The PA’s emission in 2030 is almost half or even one-third of
the estimated power sector-related emission in 2030. In addition, in this
scenario, there will be a peak emission in 2035 which applies to all sub-
scenarios of the carbon budget. A similar conclusion is also drawn where
peak emissions have no effect on the increase in earth’s temperature in
2100 (DeAngelo et al., 2021). However, in a low carbon budget, NZE
will occur in 2050, and for medium and high carbon budget scenarios,
NZE will still occur above 2050.
4.2.2. The role of low carbon technology
Low carbon technology considered in this study includes renewable
energy, cleaner fossil technology or fossil with CCS, and energy storage
(Fig. 10). In the RC, the role of renewable energy, cleaner fossil, and
energy storage are insignificant throughout the modeled year in which
the maximum value is 32% in 2035. A similar trend is shown in the CP,
but with higher mix from 2040 onwards. Three renewable energy
technologies that play an important role in achieving the NRE target are
solar PV utility-scale, geothermal and large-scale hydropower. Based on

4.2.1. Comparison of current emission, NDC, and Paris Agreement Target

If Indonesia’s electricity demand projection still follows the histori­
cal trend, which is almost similar to the national electricity planning
(RUPTL) and the electricity system planning is based solely on the least
cost, in that case, Indonesia will still reach the NDC power sector target
by 2030 without any further decarbonisation strategy took place as the
RC’s emission is still half of the estimated power sector related-NDC
both for conditional and unconditional mitigation strategy (Fig. 8). A
similar emission projection in 2030, which is in the range of 335–443
ton CO2 is shown in RUPTL 2021 (MEMR, 2021). The main reason is the
overall NDC target was derived from National Energy Policy (NEP),
which published in 2014, in which the level demand projected is very
different with the current condition. Electricity consumption per capita
is projected to reach 2500 kWh and 7000 kWh in 2025 and 2050,
respectively (Presidential Decree No, 2014; DEN, 2020). Meanwhile,
electricity consumption per capita in 2018–2020 are in the range of
880–894 kWh. It is impossible to triple the electricity consumption per Fig. 10. Share of low carbon investment
capita within 5 years. In our study, the electricity consumption per *Faded green colour indicate the share for NRE only.. (For interpretation of the
capita is projected to be 1079 kWh in 2025. This value is quite similar to references to colour in this figure legend, the reader is referred to the Web
RUPTL 2021 projection which is in the range of 1107–1146 kWh per version of this article.)

8
N. Reyseliani et al.
(MEMR, 2021), the achievement of the NRE target in 2025 is very
dependent on the deployment of the current hydropower and
geothermal projects, which these projects have been developing since
2010 but are hampered due to land acquisition, exploration, economic,
social and environmental problems. Also, in this scenario, the total low
carbon technology share is similar to the NRE share as no cleaner fossil
technologies are to be installed in this scenario.
In the PA, the role of renewable energies and cleaner fossil tech­
nologies will become more significant year by year, starting from 2030.
The significant increase in low carbon technology share will happen in
2030 as the IGCC with CCS is deployed. In 2045, another significant
increase will also happen as the solar PV utility-scale deployment has
increased and BECCS will start to be installed. The low carbon tech­
nology share in 2050 will reach 90%, leaving 10% for existing coal
power plant. The RE share is 50%, and the other 40% is IGCC with CCS.
The RE mix required to achieve NZE in the electricity system by 2050
from this study is between the values shown in (DeAngelo et al., 2021),
(Fragkos et al., 2021), and (Handayani et al., 2022) for the energy
sector. As a result, no new coal plants will be installed after 2025 to
achieve the NZE electricity sector by 2050. The results of a similar model
are also shown in (Handayani et al., 2022).
The huge differences in low carbon technology share between the PA
and the RC indicate there will be significant shifting in power sector
infrastructure after 2035 that must be anticipated by the policymakers.
The significant difference between the PA and the CP is signalling the
incompatible existing regulation to the Paris Agreement target and
infrastructure planning. Also, it highlighted the role of fossil with CCS as
important as renewable energy in achieving the Paris Agreement target.
It indicates that Indonesia must enhance the NRE mix target and
incorporate the role of cleaner technology such as fossil CCS and BECCS
in its energy policy.
The uncertainty in the carbon budget could make differences in the
magnitude and year of penetration in IGCC with CCS and BECCS. The
deployment of IGCC with CCS is needed to be start as soon as 2030 for
the low carbon budget scenario or 10 years delay for the high carbon
budget scenario. This indicates the need for CCS technology readiness in
the uncertainty of the existing carbon budget to reduce the burden of
decarbonisation. BECCS could also be needed from 2040 or not at all
until 2050 in higher carbon budget scenario. This could be a challenge,
especially for developing countries like Indonesia. The unclear current
policy and uncertainty of the carbon budget make CCS technology
development become crucial, knowing these technologies still receive
little attention, and there is still no regulation considering these tech­
nologies in Indonesia’s energy system planning. The development of
fossil CCS technologies, which should have been the initial stage of
BECCS development, has failed (Gough et al., 2018). Although other
studies have stated that the public resistance to fossil CCS is greater than
BECCS (Gough et al., 2018). Apart from the lack of attention or political
prioritisation, if the Government of Indonesia (GOI) consider the fossil
CCS and BECCS in its decarbonisation target in the energy sector, a re­
view of policy incentives becomes important to accelerate the technol­
ogy deployment (Fridahl and Lehtveer, 2018). The policy incentive
scheme adopted and followed by the shift in the technological maturity
stage (IEA, 2012). Indonesia could also take advantage of the carbon tax
to incentivise the development of fossil CCS and BECCS technology in
the early stage. In addition, international collaboration is also needed to
accelerate the implementation of these technologies in developing
countries (Enhancing financing for the research, 2017).
4.2.3. Investment and electricity production cost
As shown in SM C, Implementing the CP target does not require a
significant increase in investment towards the RC, only 6% and 13%
increase in 2045 and 2050, respectively. However, the investment di­
rection will be very different if Indonesia is ambitious enough to pursue
the Paris Agreement target. Not only higher in the total investment, but
also a significant shift in investment direction. The low carbon
9
Energy Policy 169 (2022) 113184
technology share will dramatically change up to 95% of the total in­
vestment in reaching the Paris Agreement target, in contrast RC will
result only 39% in 2050. The total investment will be increased by 48%
on the average basis to achieve the Paris Agreement target.
Refers to Indonesia’s current condition, one of the challenges in
renewable energy investment for PLN is the electricity structure which is
still vertically integrated with IPP; in which PLN acts as a single elec­
tricity buyer (Richard Bridle et al., 2018). The increase in investment
caused by clean technology will increase the burden of subsidies and
complicate the financial position of PLN (Richard Bridle et al., 2018) as a
result of losses that still occur at PLN without subsidies (PLN, 2019; PLN,
2018; PLN, 2017; PLN, 2016; PLN, 2015) to maintain the regulated
electricity for certain income level. So, there is pressure coming from the
consumer and supply side. Meanwhile, as a developing country,
Indonesia is very dependent on the cost of financing. Based on IEA (IEA,
2020), the private sector and the development finance institutions and
export credit agencies’ contribution to the electricity sector reached
35% and 40% of the total electricity sector infrastructure funding
sources built from 2016 to 2019. Meanwhile, the government’s contri­
bution is only about 25%, focusing on constructing fossil power plants
(IEA, 2020). Therefore, as long as there has been no change in the
market structure and a supportive policy framework, the private sector’s
role, both domestic and international, is very important.
Meanwhile, in terms of the increase in the 2050 cost of electricity
production of 1.6 Cent/kWh in the PA compared to the RC, it still results
in lower cost of production compared to the current year. This will not
increase the burden of government subsidies if, in the future, electricity
prices are still regulated as they are today or if the burden is passed
through to consumers, future economic growth will increase people’s
purchasing power.
5. Conclusions and policy implication
This study examines the transition of Indonesia’s electricity system
2020–2050 to achieve the Paris Agreement target using TIMES model.
Several scenarios are reviewed, including Reference Case (RC) or least
cost electricity system, Current Policy (CP) in which NRE generation mix
follows the current policy, and Paris Agreement (PA) to compare the
pathway gaps as well as the total emissions and investment on various
carbon budget. This study shows that the implementation of Indonesia’s
current policies will continue to produce an electricity system that is
67% dominated by unabated coal power plant in 2050, which leads to
no significant differences in total emissions compared to RC. Further­
more, in 2030, both of these scenarios only generate half of the esti­
mated electricity-related emission of the NDC target due to different
electricity demand levels between the policy target and the current
condition.
Meanwhile, optimisation using the national carbon budget to ach­
ieve the Paris Agreement target shows the peak of emissions will occur
in 2035, and NZE can occur in 2050. To achieve this, the electricity
supply will be dominated 50% by RE and 40% by IGCC-CCS in 2050 and
a 48% increase in investment on average basis or reach up to 75% in
2050 compare to reference case. The increase can be translated as
having constant electricity production cost to the current level, mean­
while in least cost system it be will decreased to 5.5 cent/kWh. This RE
mix is within the range of the global trends to achieve NZE. Different
carbon budget levels will not change the emission peak year, but it will
make significant impact on the starting year of IGCC-CCS and the need
for BECCS deployment until 2050. IGCC-CCS can be deployed as soon as
2030 or as later as 2040. Meanwhile, there is no significant difference in
solar PV utility-scale’s deployment among the sub-scenarios. The result
shows that the additional investment per avoided CO2-eq is in the range
of 21–27 USD/ton, and abatement cost 34 to 52 USD/ton, which is
significantly higher than the current carbon pricing implemented by
GOI.
Several gaps in Indonesia’s energy policy against Paris Agreement is
N. Reyseliani et al.
reviewed, including (i) there is an ambition gap between the NDC,
current policy, and Paris Agreement target, but no significant imple­
mentation gap between the existing historical least cost trend to the
current policy target in the electricity system, (ii) the role of clean fossil
technologies on the Indonesian electricity system in the future have not
been included in the existing policies, and (iii) the current vertically
integrated with IPP in Indonesia’s electricity system and regulated
electricity price may discourage the low carbon technology investment.
The recommendation for GOI includes (i) re-evaluating the NDC ambi­
tion for energy sector and integrate it into its derivative policies, (ii)
establishing RE, CCS technology, and energy storage in Indonesia’s en­
ergy policies, (iii) reforming the electricity system planning and market
to anticipate the change in investment direction to avoid the stranded
assets and disruption in the fossil industry.
We believe that there are still simplifications in the work of this
research so there are several recommendations that can enrich the
analysis in the future:
• Extend the sector overview to the entire energy sector, so that
simplification of emission trajectories of other subsectors is not an
assumption.
• Explore the role of energy efficiency, especially on the demand side
in achieving the Paris Agreement targets
• Review multi-regional approach to look at gaps in demand and
supply of natural resources to avoid sub-optimal conditions in the
energy system of archipelagic countries.
CRediT authorship contribution statement
Nadhilah Reyseliani: Methodology, Software, Validation, Writing –
original draft, Visualization. Akhmad Hidayatno: Writing – review &
editing, Supervision. Widodo Wahyu Purwanto: Conceptualization,
Writing – review & editing, Supervision, Funding acquisition.
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Data availability
The data that has been used is confidential.
Acknowledgments
The authors are grateful to DRPM UI for supporting this work
financially under the Hibah Publikasi Terindeks International (PUTI) Q1
Universitas Indonesia, Contract Number: NKB-4015/UN2. RST/
HKP.05.00/2020. N.R. gratefully acknowledges the Master and Doctoral
Degree Scholarship program (PMDSU) awarded by the Ministry of Ed­
ucation, Culture, Research, and Technology the Republic of Indonesia,
Contract Number: NKB-351/UN2.RST/HKP.05.00/2021.
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.enpol.2022.113184.
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