Techno-economic analysis of implementing energy-efficiency and alternative fuels in Indonesia using OSeMOSYS

Sammanfattning: Indonesia’s energy demand has been growing rapidly driven by increasing population, urbanization, and rapid economic growth. With increasing energy demand, the emissions associated with the energy sector continue to increase. With the gradual increase in demand and dominant share of fossil fuels in the energy mix, implementing the energy efficiency measures is crucial for Indonesia to achieve its energy and climate goals. From the policy perspective, National Energy plan of Indonesia aims to achieve higher levels of energy efficiency to reduce the overall energy intensity. Indonesia also has commitments to reduce greenhouse gas emissions and achieve SDG targets. This report reviews the current status of energy demand and energy efficiency in Indonesia and evaluates the potential of implementing energy efficiency measures and fuel switching options to achieve future low carbon energy future. Long term energy model of Indonesia is modelled using the open-source modelling tool OSeMOSYS. Different scenarios have been developed to investigate the outcome of implementing energy efficiency and fuel switching measures in the Residential, Commercial, and Transportation sectors. The results are presented in terms of reduction in total final energy use, greenhouse gas emissions, and local air pollution. Cost-Benefit analysis of the applied measures present their financial feasibility. With the deployment of efficient appliances, up to 30% electricity savings can be achieved in the residential and commercial sector. Vehicle electrification can contribute towards reduction in annual energy use by 48% by the end of modelling period. Measures in the residential and commercial sector directly contribute towards emission reductions. Vehicle electrification does not show proportionate reduction in emissions compared to energy use reduction due to high carbon intensity of the electricity grid. However, significant reduction in local air pollutants can be achieved. Cost benefit analysis shows that deployment of efficient appliances is financially feasible with maximum 2 years of payback period. On the other hand, successful deployment of electric vehicles will require tangible support from government due to its high price premium compared to conventional vehicles. Energy efficiency measures and fuel switching also contribute substantially to achieving Sustainable Development Goal 7.3. In conclusion, this study presents a set of technically and economically feasible energy system development options for Indonesia. From the modelling perspective, this study identifies ways to implement demand side management measures in the energy supply modelling system OSeMOSYS.