Power sector in 2030
Indonesia’s power system is heavily reliant on coal, with an emissions intensity of almost 760 gCO₂/kWh in 2019. Given the important role of power in decarbonisation, all analysed pathways consider that it needs to decarbonise rapidly. This requires a significant scale up of renewable power technologies, including solar and wind power, as well as dispatchable renewables, such as geothermal and hydro power. The share of all these renewable technologies together would need to reach 70-76% by 2030 and 99–100% by 2050, starting from 17% in 2019. Regional benchmarks indicate a share of renewables up to 84% by 2030 in South-East Asia.22 This stands in contrast with Indonesia’s long-term strategy to reach net zero by 2060, with a power mix from its long term Paris compatible scenario” (LCCP) of renewables (43%), coal (38%), natural gas (10%) and BECCS (8%).2
The most readily available technologies for decarbonisation at Indonesia’s disposal are renewables. A stronger push for renewables uptake can result in emissions intensity dropping to 110-160 gCO₂/kWh as early as 2030 and allow Indonesia to engage on a 1.5°C compatible pathway without having to rely on the use of carbon dioxide removal (CDR) technologies such as DACCS or BECCS, that are expected to play a role in GHG mitigation of power sector.2 Indonesia’s power system regulation is slowly transforming but faster action is required to achieve these emissions reductions.
Towards a fully decarbonised power sector
The full decarbonisation of the power sector is achieved in 1.5°C compatible pathways from as early as 2035, by phasing out of coal by 2030, followed by gas by around 2035. In all analysed pathways, gas use peaks in 2030 and declines thereafter with complete phase-out reached in almost all analysed pathways by 2050. Oil is phased out between 2025 and 2040 in most pathways.
Indonesia aims to rely on CCS technologies coupled with fossil fuels, targeting in its long-term plan to equip 76% of the coal power plant with CCS. Given the proven emissions intensity of these non-yet available at scale and costly technologies, it would be a safer path to engage on fostering the development of renewable technologies in the country.2,30
1 Climate Action Tracker. Indonesia. November 2021 update. Climate Action Tracker. (2021).
2 Indonesia LTS-LCCR 2050. Indonesia Long-Term Strategy for Low Carbon and Climate Resilience 2050 (Indonesia LTS-LCCR 2050). (2021).
3 Kementerian PPN/Bappenas. Low Carbon Development : A Paradigm Shift Towards a Green Economy in Indonesia. (2019).
4 Climate Action Tracker. Indonesia. CAT Climate Governance Series. Climate Action Tracker. (2021).
5 Climate Action Tracker. Coal Phase Out and Energy Transition Pathways. Climate Action Tracker. (2021).
6 Climate Action Tracker. How a COVID-19 recovery with less coal could benefit Indonesia. Climate Action Tracker. (2021).
7 Climate Action Tracker. Indonesia. September 2020 update. Climate Action Tracker. (2020).
8 Climate Transparency. Climate Transparency Report. (2020).
9 BP. Statistical Review of World Energy 2021. (2021).
10 OEC. Indonesia. Observatory of Economic Complexity (OEC). (2019).
11 Rahman, D. F. PLN pledges carbon neutrality by 2050 . The Jakarta Post (2021).
12 Development Bank, A. Indonesia Energy Sector Assessment, Strategy, and Road Map – Update. (2020).
13 Kharina, A. et al. Biofuels Policy in Indonesia: Overview and Status Report. (2016).
14 Climate Action Tracker. Indonesia. CAT Scaling Up Climate Action Series. Climate Action Tracker. (2019).
15 World Resource Institute. CAIT Paris Contributions Map – Explore Intended Nationally Determined Contributions (INDCs).
16 NDC-Indonesia. Updated Nationally Determined Contribution-Republic of Indonesia. (2021).
17 Hans Nicholas Jong. Indonesia says no new coal plants from 2023 (after the next 100 or so). (2021).
18 Ministry of Energy Mineral Resources Republic of Indonesia. Indonesia’s Effort to Phase Out and Rationalise Its Fossil-Fuel Subsidies A self report on the G-20 peer review of inefficient fossil fuel subsidies that encourage wasteful consumption in Indonesia. (2019).
19 Ministry of Research. and H. E. Indonesia Center of excellence for ccs and ccus. 2017.
20 Reuters. Indonesia carbon capture storage projects could need $500 mln, official says. Reuters. (2021).
21 Fuentes, U. et al. Decarbonising South & South East Asia – Country Profile – Indonesia. (2019).
22 Climate Action Tracker. Paris Agreement Compatible Sectoral Benchmarks: Elaborating the decarbonisation roadmap. Climate Action Tracker. (2020).
23 Climate Transparency. Indonesia. Climate Transparency Country Profile. (2021).
24 IEA. Indonesia. International Energy Agency. (2021).
25 PIK. The PRIMAP-hist national historical emissions time series. (2021).
26 IEA. E4 Country Profile: Energy Efficiency Indonesia. (2021).
27 Saputra, G. & Simanjuntak, U. The Need for Supportive Policy for the Indonesian Electric Vehicle Development. (2021).
28 ICCT. The hidden cost of Indonesia’s biodiesel mandate to consumers. International Council on Clean Transportation. (2017).
29 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches.
30 Fossil fuel with CCS in the power sector are very likely to emit at the very least a tenth of the average emissions compared with an installation without CCS and therefore cannot be considered a zero or low-carbon technology. Costs of CCS in the power sector have remained stagnant over the last decade. CCS technologies in the power sector also have a non-trivial sustainability footprint in terms of increased water use, higher fossil resource demands and consequential mining and production footprint, and in general do not address local air pollution concerns. The CCS technologies are also uncertain regarding security of storage over very long periods of time and the need for legal structure to allow it to happen.
Indonesiaʼs power mix
terawatt-hour per year
- Negative emissions technologies via BECCS
- Unabated fossil
- Nuclear and/or fossil with CCS
- Renewables incl. biomass
Indonesiaʼs power sector emissions and carbon intensity
MtCO₂/yr
- Historical emissions
- SSP1 High CDR reliance
- SSP1 Low CDR reliance
- High energy demand - Low CDR reliance
- Low energy demand
- 100%RE
1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for Indonesia
Indicator | 2019 | 2030 | 2040 | 2050 | Decarbonised power sector by |
|---|---|---|---|---|---|
Carbon intensity of power gCO₂/kWh | 760 | 110 to 160 | −70 to 0 | −40 to −10 | 2035 to 2040 |
Relative to reference year in % | −86 to −79% | −109 to −100% | −106 to −101% |
Indicator | 2019 | 2030 | 2040 | 2050 | Year of phase-out |
|---|---|---|---|---|---|
Share of unabated coal Percent | 59 | 0 to 16 | 0 | 0 | 2030 |
Share of unabated gas Percent | 21 | 9 to 10 | 0 | 0 | 2035 to 2037 |
Share of renewable energy Percent | 17 | 70 to 76 | 99 to 100 | 100 | |
Share of unabated fossil fuel Percent | 83 | 24 to 30 | 0 to 1 | 0 |
Investments
Demand shifting towards the power sector
The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” pathway entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time. See the power section for capacities deployment under the various models.
Indonesiaʼs renewable electricity investments
Billion USD / yr
Yearly investment requirements in renewable energy
Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in Indonesia to be on the order of USD 10-27 billion by 2030 and 12-61 billion by 2040 depending on the scenario considered. The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors (particularly in building and industries), growing energy demand, and expansion of electricity access. Other modelled pathways have relatively lower investments in renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the latter can require high up-front investments.