Pembaruan KEN & RUEN: Tantangan Munuju NZE2060

Dewan Energi Nasional, 20 Oktober 2022

Energy Mix Pathway Toward NZE & Challenges

Retno Gumilang DEWI dan Ucok WR SIAGIAN

Center for Research on Energy Policy - ITB
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 Low Carbon Development Strategies and CO2 Emissions Reduction Challenges

International (2005), Ton C/capita

-Japan, UK, Germany 2.5
-US 5.5; Canada 4.2
-India 0.3; China 0,6
-World (average) 1.0 – 1.1

Developed
Countries
GHG emissions per capita

Leapfrog- High Energy Locked-in

development Type Development
Developing Net Zero Emissions Global target to keep increasing In-line +2˚C
Countries - Europe (2050) of Global Temperature not more
- China (2060) than 2o (preferable 1.5o)
Indonesia, - Indonesia (2060) Increasing 1.5oC is
0.7 ton C/cap (2020) - India (2070)
Time considered as threshold limit
GHG Emission/capita [Source: AIM training WS Asian LCDS Study , 2010] for “climate catastrophe”
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PARIS AGREEMENT DAN KOMITMEN INDONESIA

Paris Agreement (PA) 2015

• Komitmen kontribusi
penurunan emis GRK Penandatanganan
global (NDC) Paris Agreement (PA) pada
▪ Ratifikasi UU 16/2016 :
• Kerangka Transparansi Disampaikan High-level Signature Ceremony Pengesahan Paris Agreement To
(Transparency PRESIDEN RI for the Paris Agreement di The UNFCCC (Okt 2016) yang
Framework) COP21/CMP11 di Markas Besar PBB, New York dilengkapi dokumen First NDC
• Means of Paris - Perancis (April 2016).
Implementation (MoI) Indonesia ke UNFCCC
(Des 2015). ▪ Enhanced NDC (September 2022)
▪ Mainstreaming NDC dan strategi
pencapaian target NDC dan
Strategi Jangka Panjang

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 Enhanced NDC RI 2030
(September 2022)

INDONESIA
NDC 2030 & LTS LCCR 2050

INDONESIA NZE
(NET ZERO EMISSION)
2060
Sedang dalam proses
penyusunan

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 Indonesia Updated NDC 2030

NDC Critically insufficient

Highly insufficient

Insufficient

2°C compatible
1.5°C Paris Agreement
NEED FOR compatible
DEEP CUT
Enhance Indonesia NDC (Nationally Determine Contribution)
Development Path not deliberated
BaU
the mitigation policies

Mitigation scenario & considers

CM1 sectoral development target
(Unconditionally)

Ambitious mitigation scenario +

CM2 International support available
(conditionally)

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Source: Climate Action Tracker (2017) and Enhanced Indonesia NDC (September 2022) 5
 Indonesia
LTS LCCR and NZE
LTS LCCR 2050 NZE 2060
(Long Term Strategy for Low Carbon and Climate Resilience) (Net Zero Emissions)
3,000
LTS 2050 LCCP: Peaking 5 sector
2,500
with net sink FOLU in 2030
NZE 2060
2,000
Waste
1,500
IPPU
FOLU
1,000
Agriculture
500 Energy
Net emiss.
-

(500)
2050

2010

2030
2010
2020
2030
2040

2020

2040
2050

2010
2020
2030
2040
2050
CPOS TRNS LCCP

Sumber: LTS LCCR Indonesia, KLHK (2021) Sector 2010 2020 2030 2040 2050 2060
Energy 453 638 1030 960 572 129
• CPOS (Current Policy)
IPPU 35 55 62 55 50 45
• TRNS (Transition) Agriculture 84 88 94 98 102 101
• LCCP (Low Carbon Scenario Compatible FOLU 470 98 -140 -246 -304 -362
with Paris Agreement Target) Waste 89 139 198 170 120 87
Net Emissions 1,131 1,018 1,244 1,037 540 0 6
Future Socio-Economic Condition
Energy Demand Target, and
The Associated GHG Emissions

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Approach for Estimating Energy Demand Target
and The Associated GHG Emissions

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 •Commuting OD •Labor participation ratio
Energy
•Export •Government expenditure
•Import ratio •Labor productivity
Number of
•Demographic composition Economics
•Average number of family

Labor Module
workers occupants
Model
Labor
demand
Wage Average
Macro-economy and Income Population and Household
working time
Industry Module Number Module
Private
Output consumption Time-use and Population
Consumption Module Number of
•Breakdown of household
consumption

•Population distribution
•Floor area per Commercial Transport •Trip per parson
output
Building Module Module •Transport distance
•Modal share
Floor area of Passenger and freight
commercial buildings transport demand

Energy demand Energy Demand & GHG

GHG emissions
Emissions Module

•Energy service demand generation unit Main endogenous Exogenous variables

•Energy efficiency Module and parameters
variables
•Fuel share
•Emission factor 9
Flow of endogenous variables Input
 Methodology

Back casting Approaches

1. 2. 3.
Setting Collection of Collection
Framework the base of LC
year Measures
information Information

5. 4.
Estimation of Estimation of
Snapshots WITH Snapshots
LC Measures WITHOUT LC
Measures

1. Driving Force Settings

2. Final Energy Demand
3. Primary Energy Demand
4. GHGs emission

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 METHODOLOGY
EndUSe Model
Technology selection focus on : Energy Consumption - CAPEX
Abatement cost curve (ACC)
• Direct Coal Fired
• - OPEX
Biomass • Coal
• Supercritical
• Co-firing • Natural gas
Service demand • Ultra
• Geothermal • Oil Selection of technology
Supercritical • Biomass
• Electricity •
power
•
and estimation of
IGCC
• Hydro power Geothermal
• Combined cycle
• Solar power
• Hydro power generation
• • Solar
Coal w/ CCS
• Wind power • Wind capacity need to be
• Biomass w/ CCS
•
(BECCS)
Nuclear power • Nuclear done to meet service
• Other renewable
demand (Hibino et al.,
Pivot diagram (EndUse result)
Socioeconomic Scenario 140
1996) and estimate the
Technology Database
(BAU & CM scenario) Energy Database 120

100
BL - MtCO2eq
CM1 - MtCO2eq
CM2 - MtCO2eq
CM3 - MtCO2eq
energy demands and
• Technology lifetime
80

60
the associated GHG
• Population growth • Energy price • Energy consumption 40
emissions released from
• •
20

Energy type Efficiency

• Economic growth
• Energy constrain • Share
0
2010 2020 2030 2040 2050 the operation of the
• Life style •
• Electricity demand • Emission factor Technology price selected technology
• Fuel availability • Investment cost and OM cost
• Technological availability (Mikiko et al., 2000 ).
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 Assumptions for
Socio-Economic Development & Energy Demand Target

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 Future Economic and
Population and Growth
Population Developments
324 330
294

Population Growth
350 270 313 1.4%
Population, Million

300 1.2% Services

234 GDP Structure
250 1.0%
9,000 Cement
200 0.8% 8,000 Iron & Steel
150 0.6% 7,000
Transportation
100 0.4% 6,000

Billion USD
Other Manufacture & Construction
5,000
50 0.2%
4,000 Chemicals
- 0.0%
3,000 Textile, leather & footwear
2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
2,000 Fertilizer
Population, Million Pop Growth
1,000
Pulp & Paper
GDP (constant rate 2010) & Growth -
2010 2020 2025 2030 2035 2040 2045 2050 2055 2060 Agriculture & Mining
12.00 8.0%

10.00 5.1%
5.7% 6.4%
5.7% 5.0%
4.8%
6.0%
▪ Economic development is expected to increase with
4.4%
average growth of 5.2%/year. Pandemic recovery
8.00 4.0%
would require economic growth of 5%-6% (2022-
Billion USD

3.7%

Growth 2025) and 6.3%-7.1% (2026-2030) and then escape

6.00 2.0%

4.00 0.0% from ‘middle income trap’ become developed

2.00
-2.0%
-2.0% country in 2045, which will require high energy
- -4.0%
consumption
2019 2024 2029 2034 2039 2044 2049 2054 2059 13
 Final Energy Demand Target
Final Energy Demand Resources Potential
2010 2019 2030 2040 2050 2060 Potential Utilization
Energy
relative to 2010 value

14 13.10 GW GW MW
12
Solar 3,295 0.22 217
10
Hydro 95 6.64 6,637
8 7.40
Bioenergy 57 2.28 2,284
6
3.58
Wind 155 0.15 154
4

1.41
2.32 Geothermal 24 2.29 2,293
2

0
Ocean 60 - -
Population GDP/Capita Final energy consumption Electricity consumption Non-Electricity
consumption
Total 3,686 12 11,585

▪ World average of final energy demand in 2020 (IEA 2022) was 1,32 toe/capita/year, in OECD countries it was
2,68 toe/capita/year, while world average primary energy supply was 3 toe/capita/year.
▪ In 2060, Indonesia energy consumption is targeted to exceed world average in 2020, i.e 1.45 toe/capita/year,
which has considered more efficient energy technology trajectory.
▪ In 2060, electricity consumption level would reach 5000 kWh/capita/year, which is about the same level with
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developed country consumption level (7000-8000 kWh/cap/year in 2020.
 HDI and Primary Energy
Human Development Index (HDI) vs. Energy Consumption
Japan

HDI ( ~ life expectancy at birth + adult

HDI :
literacy & school enrolment + GNP per
• Education capita at PPP) versus Primary Energy
• Health Demand per Capita in tonnes of oil
HDI Indonesia 0.712 (2020)
• Poverty equivalent (toe) pa [1 toe pa = 1.33 kWs].

Shoulder in HDI vs energy-use curve at ~

3 toe pa [= 4 kWs] per capita

Indonesia (2020):
0.73 toe/capita/year

2020-2060 average demand growth Final demand 2010 2019 2030 2040 2050 2060
2.8% per year & average elasticity 0.55 Toe/cap/yr 0.48 0.54 0.89 1.09 1.25 1.35 15
Energy Transition in Low Carbon Economy
Challenges of the Development of Indonesia Energy Sector

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 Energy Transition

The energy transition is

End-use
a significant structural change in ELECTRICITY
energy system through deep TRANSMISSION

COAL POWER PLANT

decarbonization towards
renewable and sustainable HYDRO

so that the increase in earth's GEOTH.

temperature does not exceed

1.5oC (Paris Agreement) towards
NZE (Net Zero Emissions)

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Projection of Energy Demand and Supply
and The Associated GHG Emissions

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 Energy Sector Development
Final Energy by Sector
500 445
Challenges in Indonesia
Mtoe

450 405 425 Commercial

376
400 342 ▪ High economic growth: increasing energy demand and trend
350 306 Industry
300 261 (trajectory) of changing energy technology (fuels to electricity)
250 201
Residential ▪ Energy Security & Resilience
200 147 − economic development (escape from middle income trap)
Transport
150 114
100 Total
− meet the energy demand of modern society with high ‘HDI’
50 ▪ National Energy Policy:
- − Moving away from Oil (depleted & import dependency)
− The se strategic assets (gas, coal) – saves of stranded assets
− Improved energy efficiency (management) and conservation
Final Energy By Fuel Electricity
Biomas + ccs − Development of new energy (nuclear, H2, ammonia, CBM,
500 445
shale gas) and renewable energy (green H2, wind, hydro,
Mtoe

450 405 425 Natural Gas + CCS

376 Coal + CCS
400 342 35% Biofuel
geothermal, solar PV, biomass-biofuels)
350 306
300 261 Biomass ▪ Current technology: increasing energy consumption and the
250 201 H2 GHG, on the one hand global commitment to addressing
200 147 EV Solar PV
climate change to achieving the targets of Paris Agreement
150 114 LPG
100 Natural Gas
▪ Need for ‘pollution-free’ air quality (especially in urban areas)
50 Oil (Petroleum Product) ▪ Energy distribution challenges for archipelagic countries and
- Coal Electricity Supply Challenges 19
Total
 Electric Power
Generation
Other RE
Power Generation Other RE Power Capacity
Nuclear
2,200
Natural gas w/ CCS
800 760
2,017 Nuclear Natural gas w/ CCS
2,000
Biomass w/ CCS Biomass w/ CCS
1,800 Co-firing w/ CCS
1,610
600 574 Co-firing w/ CCS
1,600 Coal w/ CCS
Coal w/ CCS
1,400 1,323 Co-firing
445 Co-firing
Biofuel B-30 (include diesel)
1,200 1,091
TWh

GW
400 Biofuel B-30 (include
Geothermal
1,000 898 325 diesel)
Biomass Geothermal
747
800 Wind 225 Biomass
600 445 Solar 200 164 Wind
354 Hydro
400 292
170 Natural gas 47 61 77 Solar
200 28 Hydro
Oil
- - Natural gas
Coal
Total

Electricity Demand 2010 2019 2025 2030 2035 2040 2045 2050 2055 2060
kWh/cap/yr 658 1,012 1,093 1,362 2,209 2,586 3,079 3,675 4,421 5,493 20
 Electric Power Generation
Primary Energy Supply
Fuel Used in Power Sector
900 Other RE

Mtoe
600 Other RE 824
Mtoe

535 800
Nuclear
Nuclear 726 Biofuel
500
Biofuel 700 652
426 Geothermal
Geothermal 577
600 Biomass
400
349 Biomass
497 Wind
Wind 500
441
286 Solar
300
Solar 400 Hydro
348
225
193 Hydro H2
300 271
200
Natural Gas 216 LPG
122 200
92 97 Oil 152 Natural Gas
100
51 Coal 100 Oil

Total Coal
- -
Total

Share of RE 2019 2025 2030 2035 2040 2045 2050 2055 2060
In power 17% 24% 26% 36% 43% 46% 54% 57% 60%
Share of RE 2019 2025 2030 2035 2040 2045 2050 2055 2060
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In primary 14% 23% 25% 31% 38% 44% 54% 58% 63%
GHG Emission

GHG by Sector
1,200
1,063

1,000
905 902
817
800
720 705
Power
609
600 Industrial
MtCO2e

Commercial
447
399 Residential
400 Transportation
Total

200 129

-
2010 2019 2025 2030 2035 2040 2045 2050 2055 2060

-200
22
 Final Energy in Transportation Final Energy of Industrial Sector
Electricity
140 130 132 200 182
122 127

Mtoe
Mtoe

173 Biomass ccs

113 Electricity 180 166
120 153
103 Bioavtur (100%) 160
92 139 Natural Gas
100 Biogasoline (100%) 140 123 ccs
76 120 107 Oil ccs
80 Biodiesel (100%)
60 100
Biomass 81 Coal ccs
60
H2 80
34 54 58
40 60 Biofuel
EV Solar PV
20 40
Natural Gas Biomass
20
- Avtur
- H2
Gasoline

Final Energy in Residential Sector Final Energy in Commercial Sector

35 32 33 32 31 31 12 11 11 11
30 30 Electricity 10 11
Mtoe

Mtoe
28 10 10 Electricity
30 10
Biofuel/Biogas Biofuel
25 21 22 7
Biomass 8 7 Biomass
20
H2 6 5 H2
15
LPG 4 LPG
10
Natural Gas Natural Gas
5 2
- Oil Oil
-
Coal Coal 23
▪ Power generation:
− replacement of coal by gas and renewables (max. utilization of hydro, geothermal, and biomass)
with massive deployment in solar power.
− remaining fossil system systems are to be equipped with CCS, deployment biomass power plants
+ CCS (BECCS) and nuclear.
▪ Transport sector: shift mode from private to mass public transport, fuel shift from oil fuels to biofuel,
EV (BEV, FCEV).
▪ Industry sector: fuel switch from coal to gas, electrification of end uses, biomass, remaining coal
system is to be equipped with CCS, uses of hydrogen as thermal fuel
▪ Building sector: energy efficiency measures

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Main/Major Challenges:
• Energy security (accessible, available, affordable, acceptable, and sustainable)
• Significant reduction of coal (coal phase down) – stranded assets issues
• Large deployment of coal + CCS – techn. readiness & locations
• De-dieselization, phase out diesel oil in power (the implication no biofuels in diesel engine)
• Deployment of BECCS– technology readiness & locations
• Deployment of large fraction of intermittent RE (solar PV) – grid stability & base load issues
• Nuclear ? – public acceptance issues
• Balance of trade (more RE technology imports)
• Industrial Development to support NZE implementation, e.g. metal and resin industries to
support RE system (solar panel, electric vehicle, battery, etc)

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The Role of Renewable Energy
in Energy Transition

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▪ Kesiapan Infrastruktur Pemanfaatan Energi Terbarukan Menuju NZE 2060
▪ Tantangan Mengoptimalkan Potensi Energi Terbarukan di Indonesia
▪ Strategi Pengembangan Energi Terbarukan di Indonesia

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 RE Development

▪ Renewable energy development:

− power generation technology that is already established and has been mastered (bio-fuels based,
hydro, wind, geothermal (needs exploration and exploitation innovation)
− What needs to be continuously developed: Biofuels – based on agricultural waste and algae, solar
PV, Biomass (co-firing, gasification, Organic Rankine Cycle)
− Waste-fueled power plants – PLTSa/RDF (refuse derived fuels)
− Solar PV, Wind power, Ocean Current, Nuclear.
▪The development of renewable energy needs to consider:
− Availability is intermittent, it requires energy storage (battery) and/or a hybrid system (renewable
combined with conventional/fossil energy); pump storage for hydropower, etc
− To encourage the development of renewable energy, necessary to have the right pricing policy
(gradually eliminate energy subsidy), divert subsidies to encourage the development of renewable
energy through research funding and temporary price subsidies, implementation of feed-in tariffs.
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▪ Development of Biofuels (fame biodiesel, bio-hydrocarbons, bioethanol, palm oil gasoline, etc.), for
transportation while considering the provision of sustainable (plantation) raw materials
▪ Non-renewable power uses more efficient fossil fuels, i.e. IGCC, ultra-supercritical, gas combine
cycle, etc., integrated with renewable energy (biomass co-firing) and CCS/CCUS (carbon capture
and storage) – CCS/CCUS financing can consider Carbon Pricing and the benefits of CCUS as EOR
▪ Aggressive development of renewable energy in power plants: geothermal, hydro, biomass, solar
PV (+roof top)
▪ Aggressive decarbonization in power generation sector will reduce ‘Carbon Foot Print’ of electricity
from the grid network which in turn will reduce the carbon foot print of products related to the use
of electricity from grid, thereby reducing barriers to exports of Indonesian products to countries
that are implementing a carbon foot print. print as NTBs (non-trade barriers).
▪ In industrial sector, more efficient use of energy and lower carbon emissions will encourage
improvements in the carbon foot print of the products produced
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 Challenges

▪ Shifting global economy onto RE sources is the key to combatting climate change, while improving
quality of life. To do this, national energy system must transition first, and fast changes.
▪ Indonesia’s energy face a situation of giddiness (uncertainty) in deciding a transition that requires a
much larger use of RE, as the country is basically a fossil fuels one (issues to stranded assets) but in
the other side it is demanded to contribute a bigger role in efforts to mitigate global climate change
(deep-decarbonization toward NZE).
▪ The implementation of deep-decarbonization will face many challenges among other:
− Need to develop local capacity in renewable technologies such geothermal, solar PV, wind power,
bioenergy (biofuels and other biomass base)
− Need to reduce coal use significantly. It could affect negatively to Indonesian coal industry (related
to stranded assets).
− Negative impact could be lessen by keep using coal but with high efficiency system, equipped with
CCS/CCUS, and co-firing with biomass and CCS Technology (BECCS) as negative carbon technology
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Tantangan pengembangan RE power
▪ Intermittency, grid instability → storage, smart grid
▪ Capital cost umumnya lebih mahal dibandingkan fossil energy
▪ Daya beli relative rendah sehingga feed-in tarif kurang menarik
▪ Belum tersedia insentif investasi
▪ Mis-match antara lokasi resource dan demand
▪ Size/skala renewable projects masih relative kecil bagi investor asing

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 EMPLOYMENT

• The backbone of the energy transition is new & renewable energy technologies
• There are 3 types/groups of manpower, namely (a) technology development & manufacturing, (b)
installation and operation, and (c) system management.
• Universities and research institutions foster human resources for technology development &
manufacturing, while installations and operators are created through vocational/vocational education
(polytechnics & SMK)
• Energy technology development is pursued through domestic research and innovation and technology
transfer through joint ventures (foreign investment)
• Manpower capabilities include determining the type of demand (thermal, mechanical or electrical),
sizing demand, and selecting technology (based on demand and resources, equipment sizing).
• Location of future transitional energy systems is regional, so schools can be located in relevant areas.

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To Do List
• Coal plant retirement in accordance with PLN’s schedule PLN, remaining coal is equipped with CCS.
• Need to determine vision of NZE
• To transform from vision to road map (including regulatory road map and other supporting factors)
• road-map formulation must emphasize the concept to avoid “locked-in phenomena” of fossil
energy (forced to continue to use fossiul because investment is already done)
• Need road map of R&D and manufacturing of NZE technologies
• Preparation of Regulatory Road Map for implementing KEN and RUEN, including how to transform
the policy and plan from national to sub-national (regional)

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 Strategy options:

Strategi pengembangan RE:

• Tetapkan RE sebagai andalan utk capaian NDC dan NZE.
• Lakukan kajian utk tetapkan jenis RE yang akan dijadikan prioritas pengembangan (dengan tidak mengecilkan
RE yg tidak terpilih).
• Fokuskan pengembangan, sediakan budget infrastruktur, pengembangan SDM, dan riset. Focus on most
promising technology and doable.
• Promote domestic investment (incentives, low interest loans)
• Remove regulatory barriers (termasuk perceived barriers)
• Pricing policy yang membuat RE menjadi menarik
• Utk boosting pengembangan dalam waktu dekat (short term)- undang investment asing (JV) dengan skema
kerma yang berpihak kepada kepentingan nasional jangka panjang termasuk transfer teknologi.
• Kembangkan metrik pembangunan yang mendorong low carbon development (KPI based on CO2 intensity)

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Research needs to achieve Indonesia NZE relates to technology to be deployed in the NZE.
▪ Research on energy storage for intermittent RE
▪ Research on handling of spent batteries
▪ Research in the application of solar PV (selection, sizing/design). As solar PV contribution in
power generation is expected to be huge, Indonesia has to have domestic capacity in
manufacturing of solar modules.
▪ To support EV development, it is necessary to do research on metallurgy related to battery
manufacturing. Research on the design of combined EV, solar rooftop and grid.
▪ Researches to support biofuel development: bio-diesel production (yield improvement, other
source of vegetable oils), bio-gasoline production, catalyst for biofuel coprocessing, exploratory
research to obtain other types and sources of biofuels.
▪ Continue to explore resources and potential utilization of conventional (well-known) RE such as
hydropower and geothermal.
▪ Research on biomass-coal cofiring: explore more type and shape of biomass, biomass
preparation (pelletizing etc.), modification required to increase biomass portion in co-firing.
▪ Research on smart grid
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Terimakasih
gelangdewi@gmail.com

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