IPB International Convention Center 16 February 2010

Low Carbon Society Scenario Toward 2050C I d i E S t

16 February 2010

Case: Indonesia Energy Sector

Retno Gumilang DewiCenter for Research on Energy Policy - ITB Indonesiagy y

Takuro Kobashi Institute for Global Environmental Strategies - Japan

BackgroundIndonesia CO2 emission generation (2005) is 0.3 ton C (1.1 ton CO2-eq) per capita and it will achieve 2.9 ton C (10.7 ton CO2) per

it i 2050 i li ith l ti d GDP th if tcapita in 2050 in line with population and GDP growth if current development and society behavior will continue until 2050;

W ld’ LCS t t (2050) 0 5 t C (2 0 CO2 ) itWorld’s LCS target (2050): 0.5 ton C (2.0 CO2-eq) per capita

Indonesia’s LCS dream is to use the World’s LCS target not as the goal of the development but as direction for longterm vision of thegoal of the development but as direction for longterm vision of the development;

LCS is a relatively new concept for Indonesia Therefore mostLCS is a relatively new concept for Indonesia. Therefore, most existing government action plans are not developed as roadmap to achieve Low Carbon Society (LCS) target of the country.

However, all the action plans actually are in lined with and supportive to the LCS concept.

ObjectiveObjective

To describe future visions for achieving the goals of LCS. g g

LCS actions development for Indonesia is not to achieve a certain target; it is more to explore various possibilites of g ; p pIndonesian future within the context of LCS

A study to develop model for Indonesian toward LCS visions y p2050. Three scenarios are developed to depict the direction of future socio economic visions for achieving the LCS goals.

Roadmap to achieve these visions are assesed. The roadmap covers actions and policies needed to materialize the LCS goals

Development scenarios to 2050 with respect to LCSParticular interest:

(a) socio-economic, (b) energy use, (c) associated emission level

Base year: 2005 Projection 2050– BaU (moderate scenario): current socio-economic development,

society behavior, energy systems/structure will continue until 2050; CM1 (moderate scenario): economic growth is similar with BAU more– CM1 (moderate scenario): economic growth is similar with BAU, more energy efficient and lower carbon emitting energy technology compared to BAU, slight change in society behavior (depicted as

l l d t i t d)calmer, slower, and nature oriented) – CM2 (high scenario): high economic growth, very energy efficient,

lower carbon emitting technology, much better energy related g gy, gyinfrastructure compared to BAU, with society behavior depicted as active, quick changing, and technology oriented

forcasting

LCSindicator Path exploration

Compare with LCS Target

t

LCS Target

DevelopingBack casting

BAUDeveloping Countries

LCSindicator LCS Target

Path exploration CMindicator LCS Target

ttDeveloped Countries

Government expenditure

Household sizePrivate consumptionIO

analysisOutput by

Population

Restructure industrySector

FIX

ContentsExport

Fixed capital formation

I i

Input coefficient matrix

Trip per person

Trip distance

Modal share

Output by industry

Number of household

Output of commercial

industry

Passenger transport demand

Output of manufacturing

industry ructure 

hanges 

Import ratio

Floor area per outputFreight generation per

output

Transport distance

Modal shareEnergy service demand per

driving force

industry

Commercial building floor

area

Freight transport demand

demandindustryIncrease eff of end use tech  & less GHG 

energy 

Better infrasr

& lifestyle ch

Modal sharedriving force

Fuel share

Energy efficiency Final energy demand

Electricity

B &

demand

Central power generation

(CPG)

Dispersed power generation (DPG)

Energy efficiency (DPG)

Energy demand (exc.

electricity)Dispersed power

generation (DPG)

Increase Eff power gen tech & switch to less 

GHGs  energy 

CO2 emission factor (exc.

Energy demand(CPG)

(CPG)

Fuel share (CPG)

gy y ( )

Own use (DPG)

Energy demand(DPG)

(DPG)

Increase eff of power gen 

and switch to less GHGs   CO2 emission factor (exc.

electricity)

Exogenous variables Endogenous

CO2 emission factor(electricity)

CO emissionsPrimary energy

energy 

GovernmentgParameters

gvariables

CO2 emissions(by energy end-use sector)

Primary energy demand

Government (presidential) regulation Decreasing energy demand (energy supply 

security) & CO2 (close to world target)

Modeling Tools and Stepsg pThe tool used in this research is ExSS (Extended Snap Shot) using GAMS (General Algebraic Modeling System) 23.3 supported by various technical, ( g g y ) pp yeconomic, and social parameters. In developing the proposed roadmap, there are 5 important steps, i.e.:

Depicting socio economic visions of Indonesia in energy sector toward– Depicting socio economic visions of Indonesia in energy sector toward 2050;

– Estimating current energy service demand-supply and resulting CO22emission that cover quantifying society behavior on energy utilization (activities to spend time and type of services), analyzing the impact of city and transport infrastructure (include travel behavior) and industrial c ty a d t a spo t ast uctu e ( c ude t a e be a o ) a d dust astructure to energy consumption and resulting CO2 emission;

– Exploring innovations for energy demand-supply;E i i i d d d l i BAU d– Estimating energy service demand and supply in BAU and two set scenarios and the amount of resulting CO2 emissions; and

– Analysis of domestic potential to achieve energy-related CO2 emission y p gy 2reduction.

Summary of modeling results2005BASE BAU CM1 CM2 BAU CM1 CM2

Population, Million 219            288              288              288                 1.31          1.31          1.31         GDP, Trillion rupiah 1,786      34,882      34,882      68,251         19.53      19.53      38.21     

2050 2050/2005 Socio Economic, energy, emission Parameter 

, p , , , ,GDP per capita, million rupiah 8                 121              121              237                 14.86        14.86        29.07       Gross output, trillion rupiah   Primary 329            5,779           5,779           9,617             17.57        17.57        29.23       Secondary 1 953 31 904 31 904 39 637 16 34 16 34 20 30   Secondary 1,953      31,904      31,904      39,637         16.34      16.34      20.30     

   Tertiary 1,251        29,704        29,704        77,557           23.75        23.75        62.00       Passenger transport demand, million 1,620        2,130           1,324           1,324             1.31          0.82          0.82         Freight transport demand, million to 1.07           17.67           15.84           20.84             16.51        14.81        19.48       E D d Milli TEnergy Demand, Million Toe   Passenger Transport 19              25                 5                   57                   1.31          0.27          3.02            Freight Transport 7                 108              23                 119                 16.50        3.55          18.14          Residential 43              89                 64                 55                   2.08          1.50          1.28            Industry 22            460            400             612               20.99      18.27      27.93        Commercial 4                 88                 22                 129                 23.75        6.04          34.85          Total demand  94              770              516              972                 8.19          5.48          10.34       Energy Demand per capta, toe/cap 0.43         2.67           1.79            3.38             6.23        4.17        7.87       gy p p , / pEmissions, million Ton C 67.16        842.16        395.25        161.02           12.54        5.89          2.40         Emision per capita Ton C / capita 0.31           2.92             1.37             0.56               9.54          4.48          1.82         Emision per capita Ton CO2 / capita 1.12           10.72           5.03             2.05               9.54          4.48          1.82         GDP Growth 0 07 0 07 0 08GDP Growth 0.07           0.07            0.08            Energy demand growth 0.05             0.04             0.05              Energy elasticity 0.70             0.56             0.63              

Economy Energy and EmissionsEconomy, Energy, and Emissions

• BAU 

• CM1CM1

• CM2

• Conclussions? 

300 

350 

Million Rupiah GDP per Capita (2005)

2050

100

150 

200 

250 

Change in GDP

‐

50 

100 g

structure toward tertiary industry

140 Commercial

100

120

)Commercial

Cement

Iron and Stel

O

60

80

put (

Billio

n Rp

) Other Industries

Construction

Chemicals

20

40

Out

p

Textile, Wood, Paper

Food and Beverage

Mining and Quarying

0

20

2005 2050 BAU 2050 CM1 2050 CM2

Agriculture

40

Base BAU CM1 CM2

30

)= 1

20

e (2

005

10

e of

Bas

e

0

Valu

e

Economic Output Energy Demand Emissions level

800

1,000 Million Toe solar, wind,

geothermalhydrogen800

1,000 Million Toe Commercial

400

600

800 y g

natural gas

oil product

400

600

800 Industry

Residential

0

200

400 coal

biomass

electricity0

200

400 Freight

Transport

Passenger Transport

Final energy demand by sector Final energy demand by type of energy

0 BASE BAU CM1 CM2

0 BASE BAU CM1 CM2

2.92 3.00

ton C per capita 800

1,000 Million Ton C Freight Transport

P T

1.37 1.00

2.00

400

600

Passenger Transport

Industry

Commercial

0.31 0.56 0.00

2005 BAU CM1 CM20

200

2005 BAU CM1 CM2

Residential

CO2 emissions by sector, million ton C

Per capita CO2 emission

Emission Level and avoided emissions in energy supply side

1,400 Million Ton C Emission reduction from:

1,000

1,200 Efficiency

IGCC+CCS

800 Biomass

solar, wind, geothermal

400

600 Nuclear

Hydro

0

200 H2

Emission from fossil0

2005 BAU CM1 CM2

Emission Level and avoided emissions in demand side

1,400 Million Ton C Emission reduction from:

1 000

1,200 Million Ton C

Freight Trans.

Emission reduction from:

800

1,000 Passenger Trans.

Industry

400

600 Commercial

200

400 Residential

Emission from fossil0

2005 BAU CM1 CM2

identi

al

mmerc

ial

ustry

seng

er

ght

identi

al

mmerc

ial

ustry

seng

er

ght

CM1 CM2

(100)

0

Res

Com

Indu

Pass

Frei

Res

Com

Indu

Pass

Frei

(200)

( 00)

(400)

(300)

Coal

Oil Gas

n) eothe

rmal

Coal

Oil Gas

n) eothe

rmal

2050 CM1 2050 CM2

0.00

Effic

iency

in C

Effic

iency

in O

Effic

iency

in G

H2 (H

ydrog

en

Hydro

Powe

r

Nucle

ar

solar

, wind

, ge

Bioma

ss

IGCC

+CCS

Effic

iency

in C

Effic

iency

in O

Effic

iency

in G

H2 (H

ydrog

en

Hydro

Powe

r

Nucle

ar

Solar

, wind

, g

Bioma

ss

IGCC

+ CC

S

(400.00)

(200.00)

(800.00)

(600.00)

Million Ton C

Actions

Action 1 Clean Energy: Increase share of renewable and less carbon emitting fuelsIncrease share of renewable and less carbon emitting fuels

100%

60%

80% solar, wind

LPG

Oil

Residential

20%

40%

Oil

electricity

100%

0%

20%

BASE BAU CM1 CM280%

100%solar, wind

LPG

40%

60%Oil

electricityCommercial

0%

20%

electricityCommercial

0%BASE BAU CM1 CM2

A ti 2 L C b Lif t l

Effi i i t f l t i li

Action 2 Low Carbon Lifestyle:

• Efficiency improvement of electric appliances and other technologies in residential and

i lcommercial • Improvement of society behavior (efficiency

through house keeping). • Beside efficiency in energy, this action reduces y gy

the CO2 emissions level in both sectors

Impact of clean energy & low carbon lifestyle to energy and emissions

25

30

35

4000

5 = 1

20052050 BAU2050 CM12050 CM2

5

10

15

20

Value

in 20

0Energy in

ResidentialEmissions

f rom Residential

Energy in Commercial

Emissions f rom

Commercial

Impact of efficient appliances/equipments to energy use in residential

100 electric machine100

60

80

Million Toe refrigeration

lighting

kitchen

hot wter60

80

Million Toe biomass

solar wind

Hydogen

Natural Gas

20

40

cooling

20

40

Oil

coal

electricity

0

20

BASE BAU CM1 CM2

0 BASE BAU CM1 CM2

Action3: Low Carbon Electricityy

• Increasing the use of renewable energy in energy supply mix of the power generation,

• Developing more efficient power generation p g p g(from pulverized to supercritical or IGCC),

• Reducing losses in transmission and distributionReducing losses in transmission and distribution (T&D) of electricity grids, and

• CCS (carbon capture and storage) application• CCS (carbon capture and storage) application

80%

100%coal

oil

Energy efficiency level of power generation

60%

80% oil

gas

hydro

nuclear power generation

20%

40%nuclear

geothermal

biomass

IGCC + ccs

0%Base BAU CM1 CM2

80%

100%IGCC + ccs

biomassShare of each energy60%

geothermal

nuclear

hydro

Share of each energy type in power generation

20%

40% gas

oil

coal

0%Base BAU CM1 CM2

Figure 18 Share of each energy type in power generation

Action 4: Low Carbon Fuels Industry

30

40

005 =

1

10

20

Value

of 20

I t f i t t f0Economic Output Energy Demand GHG Emissions

2005 2050 BaU 2050 CM1 2050 CM2

Impact of economic output of energy demand and CO2 emissions

500 

Energy Service Demand of indutry sectr, Million Toe400,000

Energy demand in industry, kToe

300 

400 

kiln

carbon steel

others200,000

300,000

ele

bms

100 

200 

others

machine tech

steam

direct heat

100,000

gas

oil

col

0 

Base BAU CM1 CM2

0

Base BAU CM1 CM2

Action 5: Sustainable Transportp

3.5

4

1 5

2

2.5

3

ue in

 2005

 = 1

2005

2050 BAU

Effect of passenger and freight transport demand to

0

0.5

1

1.5

P E GHG E i i

Valu

2050 CM1

2050 CM2

g penergy and emissions

Passenger Transport Demand

Energy Demand

GHG Emissions

20

25

= 1

10

15Va

lue in 2005

 =2005

2050 BAU

0

5

V 2050 CM1

2050 CM2

Freight Transport Demand

Energy Demand

GHG Emissions

2,000 

2,500 

n p‐km

)

Walk+CycleAirShip

1,500 

mand (M

illion Motorcycle

BusCar Passenger transport

demand by type of vehicle

500 

1,000 

Transport D

em demand by type of vehicle

0 

2005 2050 BAU 2050 CM12050 CM2

T

18.5 

20.8 

20

25

‐km)

15.8 

10

15

rt Dem

and (Mn t

‐Freight transport demand

by type of vehicle

1.1

5Transpo

r

1.1 

0

2005 2050 BAU 2050 CM1 2050 CM2

Policies and RegulationsPolicies and Regulations

• There are numerous energy climate policy• ₋ There are numerous energy‐climate policy initiatives, regulations, and actions in energy sector that could result in CO2 emission reduction. The latest policy initiative is non‐binding emission reduction target of 26% lower than baseline in 2020 using domesticlower than baseline in 2020 using domestic budget and further increased to 41% with international support To implement noninternational support. To implement non‐binding commitment, GOI prepares National 

i l dActions Plan 2010 ‐2020 to Reduce CO2  Emissions. 

Policies and Regulations

• There are numerous energy-climate policy initiatives, regulations and actions in energy sector that could result inregulations, and actions in energy sector that could result in CO2 emission reduction.

• The latest policy initiative is non binding emission reduction• The latest policy initiative is non-binding emission reduction target of 26% lower than baseline in 2020 using domestic budget and further increased to 41% with international support. g pp

• To implement non-binding commitment, GOI prepares National Actions Plan 2010 -2020 to Reduce CO2 Emissions. 2

• In addition to the policy initiatives, most actions plan developed for achieving the LCS target will still need policy measures to g g ysupport the implementations of these actions

(1) Increasing share of new/renewable energy and less carbon emitting ( ) g gy gfuels (include less carbon emitting technology) in energy supply mix to support implementation of Presidential Regulation 5/2006. On going programs considered to meet energy supply mix target areOn-going programs considered to meet energy supply mix target are power generation crash program I and II (which include clean coal and geothermal), kerosene to LPG, mandatory of bio-fuel utilization in power l t t t ti d i d t (MEMR 32/2008)plant, transportation, and industry (MEMR 32/2008);

(2) Increasing share of new/renewable (hydro, geothermal) and oil switch to natural gas as stated in the National Plan of Electricity Development g y p(RUPTL) PLN 2008 - 2018;

(3) Regulations that lead to the formulation of national master plan on energy efficiency;energy efficiency;

(4) Policies to support MRT development, diversification of fuels (CNG/LPG, bio-fuel, electricity) in transportation, and emissions monitoring and control of local emission and combustion efficiency that has implication to the CO2 emissions generation.

Conclussion• If current economic growth and socitey behavior continues until 2050

in the BaU scenario the energy demand will increase by 8.2 times gy yand the associated emissions will increase by 12.5 times, both compared to 2005 levels.

• CM1 and CM2 both lead to the CO2 emisssions reduction compared to BAU

CM1• CM1– Moderate economic gowth, with current policies and regulations

and efficiency efforts will lead to 33% energy conservation andand efficiency efforts will lead to 33% energy conservation and 53% emisions avoidance, both compared to the Bau levels

– Low energy conservation and emisions avoidance due to moderate economic growth will limit efforts in improving energy efficiency and investment in infrastrucures related to energy supply – demand

Conclussion

• CM2– High economic, high energy demand, high emissions – However, LCS achieveable in terms of emissions

avoidance without sacrificing high economic developmen– Requirement to achieve LCS (CM2) is high econmic

development that make investment in better infrastructure (with efficient and low carbon emitting energy systems) possibleenergy systems) possible

NIESNIES

Indonesia Low Carbon Society Vision of 2050 In Energy SectorFebruary, 2010

Institut Teknologi Bandung (ITB) IndonesiaInstitut Teknologi Bandung (ITB) - Indonesia Retno Gumilang Dewi

Institute for Global Environmental Strategies (IGES) - JapanTakuro Kobashi

Kyoto University - JapanYuzuru Matsuoka

Kei GomiMizuho Information & Research Institute JapanMizuho Information & Research Institute - Japan

Tomoki EharaNational Institute for Environmental Studies (NIES) - Japan

Mikiko KainumaJunichiro Fujino