Accelerating the transition from coal to renewables in Indonesia to achieve a net-zero energy system

Abstract

Historically heavily reliant on coal, Indonesia is at a crucial juncture to accelerate its transition to renewable energy in order to meet its net-zero goals. However, most transition pathways generally do not focus on the fast transition from fossil fuels to achieve carbon neutrality. This study compares the techno-economic feasibility of three distinctive energy transition pathways. The net-zero pathway, with an accelerated transition from coal to renewable energy, leads to a 42% reduction in annualised energy system cost and achieves carbon neutrality by 2050, compared to a pathway dependent on continued coal investments. This is enabled by the cost competitiveness of solar photovoltaics-based electrification of the energy system, supported by batteries, transmission grid expansion across the main islands, and various power-to-X routes for flexibility. Furthermore, Indonesia should carefully consider the environmental impact of large-scale palm oil cultivation and biofuel expansion. We find that the land efficiency of solar photovoltaics-based e-fuel production is much higher than cultivating oil palm for biofuel synthesis. Thus, a fast transition towards a net-zero energy system will bring various direct and indirect benefits to Indonesia.