In the heart of Southeast Asia, Indonesia is at a crossroads, grappling with its heavy reliance on coal for power generation. This dependence not only fuels environmental degradation but also poses significant challenges to the nation’s commitment to reducing CO2 emissions. A groundbreaking study published in the journal ‘Sustainable Futures’ (translated from ‘Masyarakat Masa Depan’) sheds light on potential pathways for Indonesia’s energy future, with a particular focus on the integration of hydrogen and the phase-out of coal.
The research, led by Tito Wijayanto from the School of Business and Management at Institut Teknologi Bandung, explores four distinct scenarios for Indonesia’s power generation system by 2050. Using the Low Emissions Analysis Platform (LEAP), Wijayanto and his team simulated a business-as-usual (BAU) scenario, a hydrogen incorporation (HYD) scenario, a coal phase-out (CPO) scenario, and a progressive (PRO) scenario.
The BAU scenario, which continues the current trajectory of coal dependence, emerges as the most cost-effective approach for meeting future electricity demand. However, it falls short of Indonesia’s Nationally Determined Contributions (NDCs) targets, making it an unsustainable option in the long run. “The BAU scenario might seem economically viable in the short term,” Wijayanto explains, “but it does not align with our environmental goals and international commitments.”
The CPO scenario, which involves phasing out coal, requires a significant investment of USD 114.6 billion and a capacity of 406.9 GW. Despite the high upfront costs, it is shown to be more viable from practical and cost perspectives over time. This scenario underscores the need for strategic planning and investment in renewable energy sources to meet Indonesia’s energy demands sustainably.
The HYD scenario, which incorporates hydrogen into the energy mix, shows great potential. Hydrogen could contribute 1–5% of Indonesia’s energy demand, significantly reducing reliance on coal. This scenario aligns with Indonesia’s hydrogen targets and offers a promising avenue for diversifying the energy portfolio.
The PRO scenario, while having the highest investment cost of USD 151.4 billion, offers the lowest plant capacities (367.1 GW) and the highest output-to-capacity ratio. This scenario highlights the potential for a more efficient and sustainable energy system, albeit at a higher initial cost.
The study’s findings underscore the necessity for government collaboration and feasibility analysis to drive renewable energy development. “We need a concerted effort from all stakeholders, including the government, private sector, and international partners, to make these scenarios a reality,” Wijayanto emphasizes.
The research published in ‘Sustainable Futures’ provides a comprehensive roadmap for Indonesia’s energy future, highlighting the commercial impacts and strategic shifts required in the energy sector. As Indonesia navigates its energy transition, the insights from this study will be instrumental in shaping policies and investments that balance economic growth with environmental sustainability.
The energy sector is on the cusp of a significant transformation, and Indonesia’s journey towards a sustainable energy future will serve as a blueprint for other nations grappling with similar challenges. The integration of hydrogen and the phase-out of coal are not just environmental imperatives but also commercial opportunities that can drive innovation and economic growth. As the world watches, Indonesia’s energy landscape is poised for a revolutionary change, one that could redefine the future of power generation.