Indonesia stands at a crucial crossroads in its energy transition journey, as highlighted in a recent study published in “Advances in Climate Change Research.” The research, led by Widodo Wahyu Purwanto from the Sustainable Energy Systems and Policy Research Cluster at Universitas Indonesia, delves into the intricate relationship between technological pathways and socioeconomic impacts in the context of Indonesia’s power system. With the nation being one of the world’s largest coal producers, the findings underscore the pressing need for a comprehensive approach to energy transition that takes into account the unique socioeconomic fabric of the country.
The study employs the Integrated MARKAL-EFOM System (TIMES) to model various energy transition scenarios, including a business-as-usual (BAU) approach and more ambitious pathways such as 100% renewable energy (100%RE) and two scenarios aligned with the Paris Agreement’s 1.5 °C target, one of which involves phasing out coal. Purwanto notes, “Our research reveals that while 100% renewable energy can provide extreme power flexibility, it falls short of achieving net-zero emissions by 2060 without carbon capture and storage technology.” This highlights the complexities of transitioning to a fully renewable energy system in a coal-dependent economy.
One of the striking outcomes of the study is the significant increase in installed capacity required under the Paris Agreement scenarios, which could be as much as 3.83 times higher than the BAU scenario. This shift not only demands substantial investment—estimated at nearly 2.5 times higher by 2060—but also indicates a transformative opportunity for the energy sector. “The implications for the energy market are profound. We are looking at a potential boom in renewable energy technologies, particularly in utility-scale solar PV and energy storage,” Purwanto adds.
The socioeconomic analysis, conducted using the Miyazawa Input–Output Model (MIOM), reveals that the transition scenarios would have a stronger positive impact on household income and employment compared to BAU. However, the long-term benefits appear to favor the PA1.5PO scenario, which could generate the highest value added and household income. In contrast, the 100%RE scenario is expected to create the most jobs, particularly in the electricity sector, although traditional energy sectors may face challenges during this transition.
As Indonesia navigates this complex energy landscape, the insights provided by Purwanto and his team could serve as a vital resource for policymakers aiming to ensure a fair and equitable transition towards a carbon-neutral economy. The research not only emphasizes the necessity of technological innovation but also the importance of addressing socioeconomic disparities that may arise during this transformative period.
For further insights into this research, you can explore the work of Widodo Wahyu Purwanto at Universitas Indonesia.
