low carbon development path of energy sector and role of

Low Carbon Asia Research Network (LoCARNet) 3rd Annual Meeting Draft Programme of Work

Bogor, 24–26 November 2014

Centre for Research on Energy PolicyINSTITUT TEKNOLOGI BANDUNG

Low Carbon Development Path of Energy Sector and Role of Research Community

Retno G Dewi — Iwan Hendrawan — Bintang Yuwono — Rias Parinderati

1. Introduction

2. Current Energy Situation in Indonesia

3. Energy and GHG Emission Model Using End-Use

4. Socio Economic Condition and Projection

5. Low Carbon Development Path of Energy Sector and

GHG Emission Reduction

OUTLINE

2pg.

3pg.

INTRODUCTION

LCD is long term vision (2050) of economic development in a low-carbon way

Challenge for achieving LCD is now in a global mainstream. Particular emphasis in short-term (2020) is to address options for achieving GHG reduction target (National Action Plan) up to 26% below the baseline using domestic budget and further up to 41% if there is international support.

Activities in achieving this reduction target are supported by PerPres 61/2011 (National Action Plan for GHGs Mitigation Action) and PerPres 71/2011 (GHGs Inventory).

Key Findings:Energy sector is 2nd contributor of national GHGs after AFOLU (agriculture, forestry, and land use). CO2 from energy sector increased, from 369,800 ton (2005) to 392,820 ton (2010). This high CO2 is generated from high share of fossil fuels in primary energy supply mix, in which share of renewable energy is still low, RE (6.1%), oil (44.34%), gas 43.30 %, coal 24.43%.

In this paper, LCD strategy is not to achieve world’s target on carbon intensity level; it is more to explore possibilities of the future development in a low-carbon way.

The paper presents ‘Low Carbon Development Paths of Energy Sector in Indonesia’ that is used for identifying development paths of energy sector and cost of development, GHG reduction potential if the development paths Toward to Low Carbon and costs of actions for reducing GHG in 2020 and 2050.

Significant increased in energy demand over transportation and industrial sector.

4pg.

CURRENT ENERGY SITUATION

24

48

72

96

120

1990 1995 2000 2005 2010

IndustryHouseholdCommercialTransportationACM & others

ToESECTORAL ENERGY DEMAND (“90-“12)

Implicating to increase in demand on energy, noticing that GoI is planning to transform their energy mix in increasing energy security and achieving climate targets.

source: Pusdatin—ESDM

180

360

540

720

900

1990 1995 2000 2005 2010

CoalFuelGasElectricityLPGIndustrial biomass

ToEFINAL ENERGY DEMAND (“90-“12)

source: Pusdatin—ESDM

In response to climate change issues, GoI in 2010 announced “non binding commitment” to reduce GHG emissions 26% below the baseline by 2020 with domestic budget and further up to 41% with international support.

5pg.

GHG PROJECTION

To achieve the target, the government developed mitigation actions plan that is published as National GHG Mitigation Action Plan (RAN GRK).

Emission level

target

GH

G E

mis

sion

s le

vel

BaU (Baseline)

2005 2020 2050

Reduction target ‘non-binding’ commitment (26% or 41%) in 2020

GHG PROJECTION

In-line with Low Carbon

Development Paths

6pg.

END-USE MODELLING

Non-linear programming (GAMs based Extended Snap Shot) is used as a tool for developing energy development paths and estimating associated GHGs.

BaU Mitigation (CM1&2)

envisions development paths of energy sector and the associated GHG emission without considering mitigation efforts

development paths to achieve low carbon through: • efficiency & conservation; • advance technologies; • renewables; • CCS

Base year for projection scenarios is 2005 and target year is 2020 and 2050

Two projection scenarios are developed:

Energy demand projection is gathered from ExSS results. Analysis of socio-economic data (driving forces) projects the final energy demand.

7pg.

SOCIO-ECONOMIC PROJECTION

(Driving Forces) Input Parameters to ExSS Modelling.

100

200

300

400

2005 2015 2020 2025 2030 2050

0-1415-64> 64

Millions

POPULATION INDUSTRIAL OUTPUT

5

10

15

0.5

1

1.5

2

2005 2015 2020 2025 2030 2050

Population GDP

POPULATION GROWTH

GDP GROWTH

source: BPS

3.53 6.67 9.10 14.11 16.92 38.99

20%

40%

60%

80%

100%

2005 2015 2020 2025 2030 2050

AgricultureMining & QuarryngFood & BeverageTextileChemical IndustryConstructionOther IndustryIron & SteelCementTertiary Industries

Trillions IDR

8

LCS Actions

Clean Energy (Residential and Commercial)

Low Carbon Style(Residential and Commercial)

Low Carbon Electricity

Low carbon energy system in industry

Sustainable transport

Less CO2 Emission Energy Technology

Efficient energy technology appliances

Society Behavior in Residential /Commercial

Renewable energy & Less CO2 Emission Energy

Less CO2 Emission Energy Technology (Coal IGCC + CCS)

Efficient energy process and processing technology

Efficient energy technology of power generation

Increasing Efficiency of T & D

Renewable energy or Less CO2 Emission Energy


Efficient energy technology appliances

Reduce trip generation and distance (improve Infrastructure, telecommunication, new urban design, traffic management


modal shift (public/mass rapid transport utilization)

Energy Efficiency Improvement

pg.

LOW CARBON DEVELOPMENT STRATEGY

This model assess the impacts of different measures in LCS Actions.

LOW CARBON DEVELOPMENT PATHS

9pg.

GHG REDUCTION — LOW CARBON DEVELOPMENT PATHS

!1.0!!

!1.2!!

!1.4!!

!1.0!!

!2.6!!

!11.2!!

!1.0!!

!2.2!!

!2.1!!

!2.1!!

!7.0!!

!6.7!!

!6.7!!

!1.0!!

!3.2!!

!3.0!!

!2.7!!

!10.1!!

!9.5!!

!5.9!!

0!

2!

4!

6!

8!

10!

12!

2005! 2020! 2050! 2005! 2020! 2050! 2005! BaU! CM1! CM2! BaU! CM1! CM2! 2005! BaU! CM1! CM2! BaU! CM1! CM2!

2020! 2050! 2020! 2050!

Popula7on! GDP! Energy!Demand! CO2!Emission!

Counter Measure (CM) scenario: Introduction of low-carbon measures which are already available. Assumptions are based on the official target (RAN-GRK, reduce 38 MtCO2 in energy sector).

Baseline scenario: Projection of GHG emission under expected socio-economic development in Indonesia without additional countermeasures to reduce GHG from energy.

10pg.

ENERGY DEMAND PROJECTION

ToE

SECTORAL ENERGY DEMAND PROJECTION

180,000

360,000

540,000

720,000

900,000

2005 2050 BaU 2050 CM1 2050 CM2

CoalOilGasBiomassaElectricityBiofuel

ToE

FINAL ENERGY DEMAND PROJECTION

180,000

360,000

540,000

720,000

900,000

2005 2050 BaU 2050 CM1 2050 CM2

Passanger TransportFreight TransportResidentialCommercialIndustry

In CM2 there are nuclear and Coal-CCS being introduced.

11pg.

CURRENT ENERGY SITUATION

Significant decrease of power sector GHG Emission are mainly contributed by Nuclear (16%) and Coal CCS (42%).

800

1,600

2,400

3,200

4,000

2005 2050 BaU 2050 CM1 2050 CM2

Final demand sectorsPower supplyOther energy indusriesOther Sectors

ToEGHG EMISSION

ToEENERGY DEMAND MIX

240,000

480,000

720,000

960,000

1,200,000

2005 2050 BaU 2050 CM1 2050 CM2

Coal Oil GasHydropower Solar & Wind BiomassaGeothermal Biofuel Nuclear

12pg.

RESIDENTIAL SECTOR — LOW CARBON ENERGY SYSTEM

MtCO2eq

120

240

360

480

600

2005 2015 2020 2025 2030 2050

BaUCM

GHG EMISSIONS

2015 20502005 2020 2030

ENERGY SUPPLY

20

40

60

80

100

BaU

Biogas Electricity Natural Gas Oil (Kerosene)

BaU CM BaU CM BaU CM BaU CM

CM: Efficiency and Conservations program through RAN-GRK reduce the energy consumption of residential sector. In CM there are introduction of advanced technologies in home appliances and fixtures enables lower emission as well as lower energy consumption. Biogas is introduced in CM as well as also shift in technologies, into technologies that use electricity as energy source (e.g. electric stove, electric heater, etc.).

Business as Usual scenario: setting in shift of energy supply type, from oil (kerosene) to gas by 2020.

RESINDENTIAL

13pg.


RESINDENTIAL

14pg.


2020 20502005

BaU CM BaU CM

75,000

150,000

225,000

300,000

BaU

Total Operating Annualized Investment Total Initial Investment

Millions USD

MITIGATION COSTS

2015

BaU CM

2025

BaU CM

2030

BaU CM

DEVICESMToE

2020 20502005 2015 2025 2030

20%

40%

60%

80%

100%

BaU

GB_B GB_G RC_EL_BAT RC_EL_EXT RF_EL_BATRF_EL_EXT RH_EL_BAT RH_EL_EXT RH_FC_EL RH_FC_NGRH_FC_OK RH_NG_EXT RH_OK_EXT RK_EL_BAT RK_EL_EXTRK_FC_EL RK_FC_NG RK_FC_OK RK_NG_EXT RK_OK_EXTRL_EL_FLC RL_EL_INC RL_EL_LED RO_EL_BAT RO_EL_EXT

BaU CM BaU CM BaU CM BaU CM BaU CM

RESINDENTIAL

20202005 2015

MToESERVICE OUTPUT

12

24

36

48

60

BaU

CookingCoolingHot WaterLightingOtherRefrigerant

BaU CM BaU CM1 BaU CM

2020

15pg.

POWER SECTOR — LOW CARBON ENERGY SYSTEM

MtCO2eq

360

720

1,080

1,440

1,800

2005 2015 2020 2025 2030 2050

BaUCM1CM2

GHG EMISSIONS

2015 20502005 2020 2030

ENERGY SUPPLY

140

280

420

560

700

BaU

Coal Gas Oil Biomass Solar Hydro Geothermal Biofuel

BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2

CM 1 follows the RAN-GRK plan in increasing the utilization of new and renewables technologies and energies (Hydro, Geothermal, Biomass), in this scenario there are a decrease in electricity demand due to lower activities in other sectors due to efficiency and conservation programs activated. There are changes in share of Coal, Oil, and Gas in the energy mix.

CM 2 extend the use of Hydro power generation, Biomass, and especially the introduction of Biofuel in power sector. With a specified share of Coal in the energy mix (66%), the rest of energy share are competed, as well as the technology selection.

Business as Usual Scenario follows the planned energy mix and technologies share allocation for power sector in “Rencana Umum Pengembangan Tenaga Listrik” (RUPTL 2012-2020).

POWER

16pg.


POWER

17pg.


2020 20502005

BaU CM1 CM2 BaU CM1 CM2

37,500

75,000

112,500

150,000

BaU


Millions USD

MITIGATION COSTS

2015

BaU CM1 CM2

2030

BaU CM1 CM2

GWh

440,000

880,000

1,320,000

1,760,000

2,200,000

2005 2015 2020 2025 2030 2050

BaUCM1CM2

SERVICE OUTPUT

2020 20502005 2015 2025 2030

DEVICES

20%

40%

60%

80%

100%

BaU

COL_ST_EXT COL_SC GAS_ST_EXT GAS_GT_EXT GAS_CC_EXTGAS_GE_EXT GAS_CC_NEW GAS_CC_NEWx BMS_ST_EXT SOL_EXTRHY_EXT RGE_EXT OIL_ST_EXT OIL_GT_EXT OIL_CC_EXTOIL_DE_EXT GAS_CC_NEWx RK_FC_OK RK_NG_EXT RK_OK_EXTRL_EL_FLC RL_EL_INC RL_EL_LED RO_EL_BAT RO_EL_EXT

BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2

MToE

POWER

18pg.

INDUSTRIAL SECTOR — LOW CARBON ENERGY SYSTEM

MtCO2eq

20

40

60

80

100

2005 2015 2020 2025 2030 2050

Cement (BaU)Cement (CM)Iron & Steel (BaU)Iron & Steel (CM)Cement IPPU (BaU)Cement IPPU (CM)

GHG EMISSIONS

EMS

IPPU

5

10

15

20

25

BaU

Coal Electricity Alt. Raw Material Biomass Natural Gas

BaU CM BaU CM

2020 20502005

CEMENTMToE

IRON & STEELMToE

2020 20502005

ENERGY SUPPLY

1

2

3

4

5

BaU BaU CM BaU CM

CM1 scenario of cement industry, there are extensive use of alternative fuel and material (AFR), such as Biomass for clinker substitute material and Biomass for fuel combustion process (waste, husk, hazardous waste, etc.). The reuse of waste and use of renewables as fuel and materials reduces the GHG emissions. CM1 scenario in iron & steel industry introduces the competition of advanced technologies in the production process. Advanced technologies have significant impact to higher efficiency in energy use and further reduce GHG emissions, noticing that Iron & Steel industry is a energy intensive industry.

Business as Usual scenario: In cement industry there are limited introduction of alternative material in the production process.

There is development plan of production capacity of iron & steel industry that by 2020 blast furnace process for the first time will be running under several companies.

INDUSTRY

19pg.


CEMENT INDUSTRY IRON & STEEL

INDUSTRY

20pg.


MTon (Cement)

3,000

6,000

9,000

12,000

36

72

108

144

180

2005 2015 2020 2025 2030 2050

CementSteel

MTon (Steel)

SERVICE OUTPUT

2020 205020052020 20502005

BaU CM BaU CM

2,000

4,000

6,000

8,000

BaU


Millions USD

BaU CM BaU CM

750

1,500

2,250

3,000

BaU

Millions USD

MITIGATION COSTS

CEMENT IRON & STEEL

Millions USD

2020 20502005

CEMENT

BaU CM BaU CM

6

12

18

24

30

BaU

Grinder_exisitngClinker_existingFinishing_existing

IRON & STEEL

2020 20502005

Millions USD

BaU CM BaU CM

10

20

30

40

50

BaU

Blast Furnace_exisitingCoke Oven_existingDirect Reduction_exsitingElectric Furnace_existingBasic Oxygen Furnace_existingRolling_existingRotary Kiln_existingSinter_existing

INDUSTRY

21pg.

TRANSPORTATION SECTOR — LOW CARBON ENERGY SYSTEM

MtCO2eq

100

200

300

400

500

2005 2015 2020 2025 2030 2050

BaUCM2CM1

GHG EMISSIONS

2015 20502005 2020 2030

ENERGY SUPPLY

30,000

60,000

90,000

120,000

150,000

BaU

Oil Gas Electricity Biofuel

BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU

CM1: Efficiency and Conservations program through RAN-GRK reduce the service demand of transportation in passenger km as well as tonnage-freight km. In CM1 there are introduction of advanced technologies in transportation that enables lower emission as well as lower energy consumption. Train in passenger transport has a significance increase in the mode share.

CM2 takes the efficiency and conservation further and substantially more effective in reducing emissions and energy consumption. Biofuel is introduced in CM2 scenario.

Business as Usual scenario projects the growth of output service with no change in share of transportation modes (data: National Statistics, Directorate General of Transportation).

TRANSPORTATION

22pg.


TRANSPORT

23pg.


Tonnage Km

750,000

1,500,000

2,250,000

3,000,000

600,000

1,200,000

1,800,000

2,400,000

3,000,000

2005 2015 2020 2025 2030 2050

F_BaUF_CMP_BaUP_CM

Passenger KmSERVICE OUTPUT

20152005

Millions USD

MITIGATION COSTS

140,000

280,000

420,000

560,000

700,000

BaU


BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2

2020 2030 2050

Passenger Km

2020 20502005

PASSENGER

BaU CM BaU

400,000

800,000

1,200,000

1,600,000

2,000,000

BaU

Car Bus Train MotorcycleShip Airplane Walk Bike

FREIGHT

2020 20502005

Tonnage Km

BaU CM1 BaU

600,000

1,200,000

1,800,000

2,400,000

3,000,000

BaU

Truck TrainShip Airplane

TRANSPORTATION

24pg.

CONCLUSION

Relationship Science & Policy: Independence and Neutrality of Scientists: • For science-base policy making to be realised, the scientific community has responsibility make knowledge more

accessible and policy-relevant for decision-makers to affect societal change (LCS・RNet 2010).

• In one side, it requires higher research education to be independent from government. In the other side, government also respect the independence and neutrality of scientists and each ministry has process to incorporate scientific knowledge and view in to policy by holding scientific advisor.

Role of economist, social science, and engineering science in low carbon policy: • Despite its relatively short history of economics and social sciences which contributed to climate change

compare to natural science, their role is essential in identifying a feasible transition to a low carbon society by analyzing human behaviour with higher degree of uncertainty.

• At the initial stage, economists have played a crucial role in deciding the realistic and agreeable level of commitment to achieve the target. At the time of introducing renewable obligation target in energy (electricity) supply, economists play an important role in providing cost and benefit analysis on subsidy given for technologies for energy-intensive sectors such as steel which requires special treatment.

• Due to recent movement for evidence-based policy, which requires more economic and scientific robustness, role of engineers and social scientists are increasingly important. Social science has not been focused that much, but it will have a greater role in changing people’s behaviour with high level of uncertainty.

• High independence of researcher/academia from the government through the statute and principle, evidence-based policy, the regular communication and consultation among the related stakeholders and more preference for policy impact are worth to been considered for other countries as well.

Role of engineering science in energy and low carbon technology development: • Introducing and deployment of renewable and less emission energy technology

Low Carbon Asia Research Network (LoCARNet) 3rd Annual Meeting Draft Programme of Work

Bogor, 24–26 November 2014

Centre for Research on Energy PolicyINSTITUT TEKNOLOGI BANDUNG

Low Carbon Development Path of Energy Sector and Role of Research Community

Retno G Dewi — Iwan Hendrawan — Bintang Yuwono — Rias Parinderati

low carbon development path of energy sector and role of

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