Reducing Fossil Fuel Dependence and Exploring Just Energy Transition Pathways in Indonesia using OSeMOSYS (Open-Source Energy Modelling System)

Indonesia’s commitment to the Paris Agreement and its Nationally Determined Contribution (NDC) is not adequately reflected in the significant CO2 emissions from fossil fuel-intensive energy sector, albeit enormous potential of renewable energy sources in the country. The ongoing coal regime, which has been a major contributor to Indonesia’s economy and employment sector, has led to electricity oversupply and air pollution problems. Although it poses a huge challenge for Indonesia, a just energy transition away from fossil fuel is crucial. This study aims to explore the ideal energy mix and key emissions reduction pathway in Indonesia in achieving a just energy transition using a least-cost optimisation energy modelling tool OSeMOSYS. Six scenarios are modelled over 2015-2050 including coal phase-out, NDC, Just Energy Transition Partnership (JETP), and carbon tax implementation. The result highlights that solar, geothermal, and hydropower are the alternatives for coal decommissioning. Despite the large-scale investment in renewable energy under the NDC and JETP scenarios, emissions could be reduced by 55% and 52%, respectively, by 2050. Moreover, Indonesia’s current carbon tax rate won’t lead to a significant emission reduction. Three recommended policies include (1) Accelerate CFPP retirement; (2) Impose an aggressive carbon tax rate; (3) Prioritise investment on solar technologies.