Is there a case for a coal moratorium in Indonesia? Power sector optimization modeling of low-carbon strategies

Abstract

Indonesia is one of the fastest growing economies in the world, with an electricity system reliant on fossil fuels and renewable electricity contributing a small portion of their growing demand. In this study, an optimization approach is utilized to analyze different policy-driven pathways for Indonesia's long-term electricity planning by formulating different scenarios based on current policy discussions and changes in the power sector. Through an optimization model, several scenarios incorporating multiple changes such as cost reductions of technologies, halting coal capacity beyond the current pipeline, and carbon taxation schemes are built. The findings show the magnitude of transformation needed to achieve net zero goals and consolidate the discussion around halting coal capacity addition beyond currently planned in terms of technical, environmental, and economic aspects. These findings will be useful to electricity sector policymakers and planners as Indonesia continues along its sustainable economic development pathway.