INDONESIA CLIMATE CHANGE MITIGATION STRATEGY AND ITS IMPLICATION ON ENERGY SECTOR DEVELOPMENT

EASS MEETING, BEIJING, 23-24 SEPT 2010

Fabby Tumiwa, IESR

Ambitious Target

At G20 Summit in Pittsburg (2009), Indonesia President committed to a 26% - 41% emission reduction target by 2020 making Indonesia the first large developing country to do so.

Similar statement made in Copenhagen COP-15, followed by submitting official pledge to UNFCCC in February 2010 to support Copenhagen Accord.

Government agencies prepared plan, intervention scenarios to achieve the reductions target, and domestic policies to support implementation of the plan.

Achieving 26-41% reductions from 2020 baseline would require reducing annual emissions by 0.6-1 GtCO2e

In short term, largest emission reduction is expected to come from peat and forestry sector.

National Policy Development on CC

Indonesia Climate Change Strategy Road-map (ICCSR, 2010)

Presidential Decree on National Action Plan for GHGs Reduction (upcoming by October/November 2010??)

Presidential Decree on REDD (upcoming Oct/Nov 2010??)

Implication to Power Sector Development and Strategy

Modest target and lack of attention for GHGs emission reduction from power sector.

Emission reduction target 30 Mton CO2 by 2020 Energy efficiency: demand side

management Increasing utilization of renewable energy

Geothermal: 7000 MW (by 2020) Micro and small hydro Others: solar PVs, wind power

Fuel switching: diesel oil to bio-fuel

Energy Mix Scenario for Power Generation

HSD 12%

MFO 7%

GAS22%

LNG0%

BATUBARA 46%

HYDRO 7%

GEOTHERMAL 6%

2009

HSD 2%

MFO 0%

GAS16%

LNG4%

BATUBARA 59%

HYDRO 4% PUMPED

STORAGE1%

GEOTHERMAL 14%

2019

Source: PLN’s Power Supply Development Plan (2009-2019)

Fossil fuel will still dominates 80-85% of power generation for the next decade.

Coal will dominates power generation (~60% of total generating capacity) Currently only 15% of national production of

coal are being used for power generation, 30% – 40% in 2020.

Dominate by pulverized coal PP, some CCTs fleet will come online after 2014/2015.

Nuclear power has not yet consider as GHGs mitigation measures Development are slow, controversial, and

not gain full support from current administration, public opposition is still high.

NPP unlikely to be operated in Indonesia before 2025 Up to 2015 to determine and study new sites

(outside Java) NPP proponent is trying to win people’s support Most optimistic scenario: NPP construction will

start in 2018

Sustainable Electricity Scenario for Indonesia (IESR, 2008)

Result of LEAP model (2008)

Introduction

Model developed in 2007-2008, will be updated and improved in 2011

Business as usual: Electricity development plan (2006-2025) Additional coal-fired power plant: 10 GW

(2007-2012) NPP: 4 GW in 2025 (optimistic scenario)

Energy efficiency and conservation (15% of electricity consumption) can replace demand for NPP development.

Model Structure

Demand structure: Energy demand: electricity & non-electricity Electricity demand is categorized by

system (islands-based system) Non-electricity demand is bundled, non-

specific

PremiumMinyak TanahMinyak SolarMinyak DiselMinyak BakarListrik SumateraListrik SulawesiListrik PapuaListrik Nusa TenggaraListrik MalukuListrik KalimantanListrik JaMaLiLPGGas AlamBioetanolBiodieselBatubaraAvturAvgas

Demand Results: Energy demand final units

Scenario: BAU

2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Mill

ion

Bar

rel o

f O

il Eq

uiva

lent

s

1,700

1,600

1,500

1,400

1,300

1,200

1,100

1,000

900

800

700

600

500

400

300

200

100

0

Total Energy Demand (2005-2025)

Listrik SumateraListrik SulawesiListrik PapuaListrik Nusa TenggaraListrik MalukuListrik KalimantanListrik JaMaLi

Demand Results: Energy demand final units

Scenario: BAU

2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Tho

usan

d G

igaw

att-

Hou

rs

440

420

400

380

360

340

320

300

280

260

240

220

200

180

160

140

120

100

80

60

40

20

0

Projection of Electricity Consumption (2005-2025)

Supply structure: Power Plant Power Transmission (island

based-grid/interconnection) Oil refineries LPG and LNG refineries Oil, Gas, and Coal mines Ethanol processing plants Biodiesel plants

Panasbumi JamaliNuclearMinyak SolarMinyak BakarHydroGas AlamBatubara

Transformation Results: Inputs

Scenario: BAU, Input fuel type: All Input fuel types

2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Mill

ion

Bar

rel o

f O

il Eq

uiva

lent

s

600

550

500

450

400

350

300

250

200

150

100

50

0

Energy Input for Power Generation in Java-Bali system

KonservasiBAUAL3AL2AL1

Environmental Results: Pollutant loadings

Fuel: All Fuels, Effects: Carbon Dioxide Non Biogenic

20062007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Bill

ion

Kilo

gram

mes

400

380

360

340

320

300

280

260

240

220

200

180

160

140

120

100

80

60

40

20

0

Recent development

Diesel oil consumption is still high (22% of total electricity generated).

2nd stage of Electricity crash program (2009-2014): 40% coal, 60% renewables (geothermal, hydro)

Declining natural gas supply for power plant in the last 2 years, plan to build LNG liquefaction plant near Jakarta by 2012/2013.

Poor geothermal development, target to add 6.5 GW up to 2020 is hardly to meet.

Uncertainty in nuclear development. Failure of biofuels development program Development of new technology: e.g: Coal Bed Methane (CBM) Impact of GHGs various mitigation measures, including CCTs.

INSTITUTE FOR ESSENTIAL SERVICES REFORM

JAKARTA, INDONESIA www.iesr-indonesia.org

FABBY TUMIWAfabby@iesr-indonesia.org