SEMS Collaboration Paper: Power Sector Decarbonization in Coal-Producing Countries – The Case of Indonesia

Our latest study, published in the Journal of Cleaner Production, explores decarbonization pathways for Indonesia’s power sector, focusing on the challenges of phasing out coal in a developing and coal-producing country. Using a VEDA-TIMES energy system optimization approach, the research evaluates different scenarios, including business as usual (BAU), decarbonization without coal phase-out (PA 1.5), and decarbonization with coal phase-out (PA 1.5 PO). This is a collaboration paper in the Sustainable Energy Systems and Policy Research Cluster, Universitas Indonesia.

Key findings indicate that decarbonization will inevitably reduce coal reliance, but in a technology-agnostic transition, coal could still account for 16% of total capacity in 2060. The study highlights the role of Carbon Capture and Storage (CCS) technology in mitigating emissions but also reveals the economic challenges of a complete coal phase-out, which could strand $9 billion in existing assets and lead to a cumulative net loss of $799 billion in the coal upstream sector.

Additionally, while renewable energy and natural gas will play increasing roles, the phase-out of coal presents energy security risks, mainly due to Indonesia’s reliance on gas imports. Policy recommendations emphasize the need for a clear and coordinated roadmap, balancing decarbonization efforts with economic and energy security concerns.

For further insights, read the full article:
📖 Reyseliani, N., Pratama, Y. W., Hidayatno, A., Mac Dowell, N., & Purwanto, W. W. (2024). Power Sector Decarbonization in Developing and Coal-Producing Countries: A Case Study of Indonesia.
📍 Journal of Cleaner Production, Vol. 454, Article 142202. Click Here