Transition to Low Carbon Electrical Generation for Indonesia

Abstract

This paper explores the options for the transition from fossil fuels to renewables for Indonesia’s electricity supply. The stimulus for considering such a transition is the need to reduce carbon emissions whilst meeting the electrical demand. We have modelled a phased replacement strategy in which retiring fossil fuel plants are replaced by renewable plants. The modelling computes carbon emissions, energy output and costs. Such a strategy will take up to 2050 to reduce CO2 emissions to near zero. The modelling was then applied to test more rapid retirement of the fossil fuel plants to obtain near zero emissions by 2040 and then by 2030. All of these strategies were accompanied by reducing costs, largely because of the low and reducing costs of renewables. The modelling was also used to check the sensitivity of the outcome to the assumed costs of fossil fuels and the projected reduction in renewable energy costs. The results show that Indonesia could achieve low carbon electricity generation without extra cost and probably with considerable financial savings. The paper goes on to project an expansion of electrical capacity using renewables, and to propose standalone renewable mini-grids for remote communities as cost effective compared to extending the grid system.