Pathways to reduce Indonesia’s dependence on oil and achieve longer-term decarbonization

Abstract

Key challenges for Indonesia to 2050 are to reduce its dependency on fossil-based fuels and to decarbonize its energy system. This article adopts a systems approach to investigate future pathways, positing a shift from oil combustion to electricity to energize cooking stoves and vehicles. Today, electricity is predominantly generated using gas and coal. The cost-competitiveness of renewables is central to any sectoral adjustment in the nation's total primary energy supply (TPES). To study variables within the energy system, causal loop diagrams (CLDs) are constructed acknowledging three underlying elements: constraints (the energy trilemma); resource availability, oriented to physical elements and human resources (stakeholders); and the mode of regulation. Indonesia's energy market is characterized by state enterprise and price subsidies to retail consumers. We analyze the capability of private companies to drive competition among providers of renewable energy and facilitate more competitive pricing. Our results suggest that, irrespective of the composition of the TPES over the next 30 years, fossil sources will remain significant, necessitating carbon capture storage (CCS) technology as a complement to renewable energy promotion.