End-Use Model for Indonesia Low-Carbon Development Paths of Energy Sector

Transcription

1 Energy, Environment, and Ecosystems (3E) Nexus Initiative for Sustainable Development in Asian Countries End-Use Model for Indonesia Low-Carbon Development Paths of Energy Sector Denpasar - Bali, February 2015 by Retno Gumilang Dewi! gelang@che.itb.ac.id or gelangdewi@yahoo.com Centre for Research on Energy Policy The Department of Chemical Engineering - Faculty of Industrial Technology INSTITUT TEKNOLOGI BANDUNG!

2 OUTLINE 1. Introduction 2. Current Energy Situation in Indonesia 3. Energy and GHG Emission Model Using End-Use GAMS 4. Socio Economic Condition and Projection 5. Low Carbon Development Path of Energy Sector and GHG Emission Reduction 6. Role of Research Community pg. 2

3 INTRODUCTION LCD is long term vision (2050) of economic development in a low-carbon way! Challenge for achieving LCD is now in a global mainstream. Particular emphasis in short-term (2020) is to address options for achieving GHG reduction target (National Action Plan) up to 26% below the baseline using domestic budget and further up to 41% if there is international support. Activities in achieving this reduction target are supported by PerPres 61/2011 (National Action Plan for GHGs Mitigation Action) and PerPres 71/2011 (GHGs Inventory). Key Findings:! Energy sector is 2 nd contributor of national GHGs after AFOLU (agriculture, forestry, and land use). CO2 from energy sector increased, from 369,800 ton (2005) to 392,820 ton (2010). This high CO2 is generated from high share of fossil fuels in primary energy supply mix, in which share of renewable energy is still low, RE (6.1%), oil (44.34%), gas %, coal 24.43%. In this paper, LCD strategy is not to achieve world s target on carbon intensity level; it is more to explore possibilities of the future development in a low-carbon way. The paper presents End-Use Model for Indonesia Low-Carbon Development Pathways in Energy Sector that is used for identifying development paths of energy sector and cost of development, GHG reduction potential if the development paths Toward to Low Carbon and costs of actions for reducing GHG in 2020 and The study aims to provide inputs for the decision maker in energy sector.! pg. 3

4 INTRODUCTION LCD Inputs is for long Government term vision of (2050) Indonesia of economic in developing development energy policy in a low-carbon way! Stakeholders President Ministry(of(Industry other(ministries Ministry(of(Transport MEMR (Ministry of Energy & Mineral Resources) Dra4(RUEN( (Na:onal( Energy(Plan) DEN (National Energy Council) RUEN KEN( (Na:onal( Energy(Policy) Parlement Approval Stakeholders Stakeholders (Energy Supply) MODEL(&( others( input Scientific Community pg. 4

5 GHG PROJECTION In response to climate change issues, GoI in 2010 announced non binding commitment to reduce GHG emissions 26% below the baseline by 2020 with domestic budget and further up to 41% with international support.! GHG PROJECTION" GHG Emissions level" BaU (Baseline)" Emission level target" Reduction target nonbinding commitment (26% or 41%) in 203 In-line with Low Carbon Development Paths" 2005" To achieve the target, the government developed mitigation actions plan that is published as National GHG Mitigation Action Plan (RAN GRK).! pg. 5

6 CURRENT ENERGY SITUATION Significant increased in energy demand over transportation & industrial sector.! ToE" 144" 12 96" SECTORAL ENERGY DEMAND ( 90-12)" ACM & others" Transportation" Commercial" Household" Industry" ToE" FINAL ENERGY DEMAND ( 90-12)" Industrial biomass" LPG" Electricity" Gas" Fuel" Coal" 72" 48" 36 24" " " 201 source: Pusdatin ESDM" " " 201 source: Pusdatin ESDM" Implicating to increase in demand on energy, noticing that GoI is planning to transform their energy mix in increasing energy security and achieving climate targets.! pg. 6

7 END-USE MODELLING pg. 7

8 END-USE MODELLING Non-linear programming (GAMs based Extended Snap Shot) is used as a tool for developing energy development paths and estimating associated GHGs.! Two projection scenarios are developed: " BaU" envisions development paths of energy sector and the associated GHG emission without considering mitigation efforts " Mitigation (CM1&2)" development paths to achieve low carbon through:" efficiency & conservation;" advance technologies;" renewables;" CCS" " " Base year for projection scenarios is 2005" and target year is 2020 and 205 Energy demand projection is gathered from ExSS results. Analysis of socio-economic data (driving forces) projects the final energy demand.! pg. 8

9 SOCIO-ECONOMIC PROJECTION (Driving Forces) Input Parameters to ExSS Modelling.! POPULATION" INDUSTRIAL OUTPUT" Millions" > 64" 15-64" 0-14" 100%" 80%" 60%" 40%" Tertiary Industries" Cement" Iron & Steel" Other Industry" Construction" Chemical Industry" Textile" Food & Beverage" Mining & Quarryng" Agriculture" 10 20%" 2005" 2015" " %" 2005" 2015" " Trillions IDR" 3.53" 6.67" " 16.92" 38.99" POPULATION GROWTH" 2" 2" Population " GDP " 15" 1 GDP GROWTH" 1" 1" 5" 2005" 2015" " source: BPS" pg. 9

10 GHG REDUCTION LOW CARBON DEVELOPMENT PATHS Baseline scenario: " Projection of GHG emission under expected socio-economic development in Indonesia without additional countermeasures to reduce GHG from energy. Counter Measure (CM) scenario:" Introduction of low-carbon measures which are already available. Assumptions are based on the official target (RAN-GRK, reduce 38 MtCO2 in energy sector). pg. 10

11 LOW CARBON DEVELOPMENT PATHS This model assess the impacts of different measures in LCS Actions.! LOW CARBON DEVELOPMENT STRATEGY" pg. 11

12 ENERGY DEMAND PROJECTION Difficult to move away from Oil large share of oil in energy demand by type! ToE" SECTORAL ENERGY DEMAND PROJECTION" ToE" FINAL ENERGY DEMAND PROJECTION" 900,00 900,00 720,00 720,00 540,00 540,00 360,00 360,00 180,00 180, " BaU" CM1" CM2" BaU" CM1" CM2" 2005" BaU" CM1" CM2" BaU" CM1" CM2" Passanger Transport" Residential" Industry" Freight Transport" Commercial" Coal" Oil" Gas" Biomassa" Electricity" Biofuel" High increase in energy demand portion from industrial sector and freight whilst decrease in commercial sector! pg. 12

13 CURRENT ENERGY SITUATION In CM2 there are nuclear and Coal-CCS being introduced.! ToE" ENERGY MIX" ToE" GHG EMISSION" 1,200,00 4,00 960,00 3,20 720,00 2,40 480,00 1,60 240, " BaU" CM1" CM2" BaU" CM1" CM2" 2005" BaU" CM1" CM2" BaU" CM1" CM2" Coal" Oil" Gas" Hydropower" Solar & Wind" Biomassa" Geothermal" Biofuel" Nuclear" Final demand sectors" Other energy indusries" Power supply" Other Sectors" Significant decrease of power sector GHG Emission are mainly contributed by Nuclear (16%) and Coal CCS (42%).! pg. 13

14 POWER SECTOR LOW CARBON ENERGY SYSTEM Business as Usual Scenario follows the planned energy mix and technologies share allocation for power sector in Rencana Umum Pengembangan Tenaga Listrik (RUPTL )." MtCO2eq" 1,80 1,44 BaU CM1 CM2 GHG EMISSIONS" POWER" CM 1 follows the RAN-GRK plan in increasing the utilization of new and renewables technologies and energies (Hydro, Geothermal, Biomass), in this scenario there are a decrease in electricity demand due to lower activities in other sectors due to efficiency and conservation programs activated. There are changes in share of Coal, Oil, and Gas in the energy mix. " CM 2 extend the use of Hydro power generation, Biomass, and especially the introduction of Biofuel in power sector. With a specified share of Coal in the energy mix (66%), the rest of energy share are competed, as well as the technology selection." ENERGY SUPPLY" 1,08 Mtoe" 1,10 Coal Gas Oil Biomass Hydro Geothermal Blended Bio-fuel BaU BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 2005" 2015" " " 2015" " pg. 14

15 POWER SECTOR LOW CARBON ENERGY SYSTEM EL_COL_ST_EXT EL_GAS_ST_EXT EL_GAS_GT_EXT EL_GAS_CC_EXT EL_GAS_GE_EXT EL_ELY_EXT EL_BMS_ST_EXT EL_RHY_EXT EL_RGE_EXT EL_OIL_ST_EXT EL_OIL_GT_EXT EL_OIL_CC_EXT EL_OIL_DE_EXT POWER" 70000%" 56000%" 42000%" GWh" 2,200,00 SERVICE OUTPUT" 28000%" 14000%" 1,760,00 BaU" CM1" CM2" 0%" BaU BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 2005" 2015" " MITIGATION COSTS" 1,320,00 millions USD" 250,00 Total Operating Cost Annualized Investment Cost Total Initial Investment Cost 200,00 880,00 150,00 100,00 50,00 440,00 BaU BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 BaU CM1 CM2 2005" 2015" " " 2015" " pg. 15

16 POWER SECTOR LOW CARBON ENERGY SYSTEM POWER" ABATEMENT COST CURVE" USD/tCO2eq" 12 Biomass ST COST/SAVINGS" 96" 72" 48" 24" Gas CC with CCS Geothermal IGCC Coal with CCS Nuclear Hydro " tco2eq" GHG REDUCTION" pg. 16

17 TRANSPORTATION SECTOR LOW CARBON ENERGY SYSTEM Business as Usual scenario projects the growth of output service with no change in share of transportation modes (data: National Statistics, Directorate General of Transportation)." MtCO2eq" 400,00 320,00 BaU CM1 CM2 GHG EMISSIONS" TRANSPORT" CM1: Efficiency and Conservations program through RAN-GRK reduce the service demand of transportation in passenger km as well as tonnagefreight km. In CM1 there are introduction of advanced technologies in transportation that enables lower emission as well as lower energy consumption. Train in passenger transport has a significance increase in the mode share." " CM2 takes the efficiency and conservation further and substantially more effective in reducing emissions and energy consumption. Biofuel is introduced in CM2 scenario. " 240,00 160,00 80, " 2015" " pg. 17

18 TRANSPORTATION SECTOR LOW CARBON ENERGY SYSTEM Passenger Km" 2,000,00 PASSENGER" Tonnage Km" 3,000,00 FREIGHT" TRANSPORT" 1,600,00 2,400,00 1,200,00 1,800,00 800,00 1,200,00 Tonnage Km" SERVICE OUTPUT" Passenger Km" 400,00 BaU" 2005" BaU" CM" BaU" ,00 BaU" 2005" BaU" CM1" BaU" ,000,00 2,400,00 F_BaU" F_CM" P_BaU" P_CM" 3,000,00 Car" Bus" Train" Motorcycle Ship" Airplane" Walk" Bike" Truck" Ship" Train" Airplane" 2,250,00 MITIGATION COSTS" 1,800,00 Millions USD" 700,00 1,500,00 560,00 1,200,00 420,00 280,00 750,00 140,00 600,00 BaU" 2005" BaU" CM1" CM2" BaU" CM1" CM2" BaU" CM1" CM2" BaU" CM1" CM2" 2015" Total Operating" Annualized Investment" Total Initial Investment" 2005" 2015" " pg. 18

19 TRANSPORTATION SECTOR LOW CARBON ENERGY SYSTEM TRANSPORT" ABATEMENT COST CURVE" USD/tCO2eq" 40 Biofuel 30 COST/SAVINGS" Gasoline pass.-car (flow) Ely. Pass. Rail (hi-eff) & (flow) Large-size truck (flow) Bus(flow) hi-eff aircraft-intl.&doemestic flight-freight Motorcycle (flow) hi-eff intl.&domestic naval transport-freight -50 tco2eq" GHG REDUCTION" pg. 19

20 INDUSTRIAL SECTOR LOW CARBON ENERGY SYSTEM Business as Usual scenario: In cement industry there are limited introduction of alternative material in the production process." " There is development plan of production capacity of iron & steel industry that by 2020 blast furnace process for the first time will be running under several companies." MtCO2eq" Cement (BaU)" Cement (CM)" Cement IPPU (BaU)" Cement IPPU (CM)" Iron & Steel (BaU)" Iron & Steel (CM)" GHG EMISSIONS" EMS" IPPU" ENERGY SUPPLY" INDUSTRY" CM1 scenario of cement industry, there are extensive use of alternative fuel and material (AFR), such as Biomass for clinker substitute material and Biomass for fuel combustion process (waste, husk, hazardous waste, etc.). The reuse of waste and use of renewables as fuel and materials reduces the GHG emissions. " CM1 scenario in iron & steel industry introduces the competition of advanced technologies in the production process. Advanced technologies have significant impact to higher efficiency in energy use and further reduce GHG emissions, noticing that Iron & Steel industry is a energy intensive industry. " MToE" CEMENT" MToE" IRON & STEEL" 6 25" 5" 2 4" 4 15" 3" 1 2" 2 5" 1" BaU" BaU" CM" BaU" CM" BaU" BaU" CM" BaU" CM" 2005" 2015" " " " Coal" Electricity" Alt. Raw Material" pg. 20

21 INDUSTRIAL SECTOR LOW CARBON ENERGY SYSTEM Millions USD" 3 24" CEMENT" Finishing_existing" Clinker_existing" Grinder_exisitng" Millions USD" 5 4 IRON & STEEL" Rolling_existing" INDUSTRY" Electric Furnace_existing" 18" 3 Direct Reduction_exsiting" SERVICE OUTPUT" 12" 2 216" 12,00 6" 1 MTon" (Cement)" Cement" Steel" MTon" (Steel)" BaU" BaU" CM" BaU" CM" BaU" BaU" CM" BaU" CM" " " ,00 144" MITIGATION COSTS" Millions USD" 8,00 CEMENT" Millions USD" 3,00 IRON & STEEL" 108" 6,00 6,00 2,25 72" 4,00 1,50 3,00 2, " BaU" BaU" CM" BaU" CM" BaU" BaU" CM" BaU" CM" 2005" " Total Operating" 2005" 2015" " pg. 21

22 INDUSTRIAL SECTOR LOW CARBON ENERGY SYSTEM ABATEMENT COST CURVE" INDUSTRY" USD/tCO2eq" CEMENT" USD/tCO2eq" IRON & STEEL" 113" 84" 13 98" Continuos Casting (BAT) 56" 65" Blast Furnace (BAT) +CCS 28" 33" COST/SAVINGS" Vertical Mill Cement Mix " -56" COST/SAVINGS" BOG Recovery BFG & COG Recovery 5" 1 15" 2 25" 3 CDQ -33" -65" -84" -98" -113" -13 Scrap pre-heater -141" tco2eq" -163" Dry TRT GHG REDUCTION" pg. 22

23 RESIDENTIAL SECTOR LOW CARBON ENERGY SYSTEM Business as Usual scenario: setting in shift of energy supply type, from oil (kerosene) to gas by 2020." RESINDENTIAL" MtCO2eq" BaU" CM" GHG EMISSIONS" CM: Efficiency and Conservations program through RAN-GRK reduce the energy consumption of residential sector. In CM there are introduction of advanced technologies in home appliances and fixtures enables lower emission as well as lower energy consumption. Biogas is introduced in CM as well as also shift in technologies, into technologies that use electricity as energy source (e.g. electric stove, electric heater, etc.). " 48 ENERGY SUPPLY" BaU" BaU" CM" BaU" CM" BaU" CM" BaU" CM" 2005" 2015" " " 2015" Electricity" Natural Gas" Oil (Kerosene)" pg. 23

24 RESIDENTIAL SECTOR LOW CARBON ENERGY SYSTEM MToE" DEVICES" 10000%" 8000%" RESINDENTIAL" 6000%" MToE" SERVICE OUTPUT" 4000%" 2000%" 0%" BaU" BaU" CM" BaU" CM" BaU" CM" BaU" CM" BaU" CM" 2005" 2015" " " Refrigerant" Other" Lighting" Hot Water" Cooling" Cooking" GB_G" RC_EL_EXT" RF_EL_EXT" RH_EL_EXT" RH_FC_EL" RH_FC_OK" RH_OK_EXT" RK_EL_EXT" RK_FC_EL" RK_FC_NG" RK_FC_OK" RK_NG_EXT" RK_OK_EXT" RL_EL_INC" RO_EL_EXT" 36" MITIGATION COSTS" Millions USD" 300,00 24" 225,00 150,00 12" 75,00 BaU" 2005" BaU" CM" 2015" BaU" CM" BaU" CM" BaU" CM" BaU" CM" " BaU" BaU" CM" BaU" CM1" BaU" CM" 2005" 2015" Total Operating" pg. 24

25 Role of Research Community RESIDENTIAL SECTOR LOW CARBON ENERGY SYSTEM Relationship Science & Policy: Independence and Neutrality of Scientists: RESINDENTIAL" For science-base policy making to be realised, the scientific community has responsibility make knowledge more accessible ABATEMENT and policy-relevant COST for decision-makers CURVE" to affect societal change (LCS RNet 2010). In one side, USD/tCO2eq" it requires higher research education to be independent from government. In the other side, government also respect the independence and neutrality of scientists and each ministry has process to incorporate Electric scientific knowledge and view in to policy by holding scientific advisor. Cooking Range 1,467" Air Conditioner (advanced) Role of economist, social science, and engineering science in low carbon policy: Refrigerant (advanced) Despite its relatively short history of economics and social sciences which contributed to climate change compare to 1,222" natural science, their role is essential in identifying a feasible transition to a low carbon society by analyzing human behaviour with higher degree of uncertainty. COST/SAVINGS" 978" At the initial stage, economists have played a crucial role in deciding the realistic and agreeable level of commitment to achieve the target. 733" At the time of introducing renewable obligation target in energy (electricity) supply, economists play an important role in providing cost and benefit analysis on subsidy given for technologies for energy-intensive sectors such Other Equipment (advanced) LED as steel which requires 489" special treatment. Due to recent movement for evidence-based policy, which requires more economic and scientific robustness, role of 244" Heat Pump Water-heater engineers and social scientists are increasingly important. Social science (advanced) has not been focused that much, but it will have a greater role in changing people s behaviour with high level of uncertainty. Biofuel 5" 1 15" 2 25" 3 35" 4 45" 5 55" worth to been -489" considered for other countries as well. introducing and deployment of renewable and less emission GHG REDUCTION" energy technology Fluorescent Fukushima accident in Japan triggered the discussion worldwide on the role of science and its relation with policy. High independence -244" of researcher/academia from the government through the statute and principle, evidence-based policy, the regular communication and consultation among the related stakeholders and more preference for policy impact are Role of engineering science in energy and low carbon technology development: tco2eq" pg

26 Acknowledgment" Institut Teknologi Bandung (ITB) - Indonesia " Institut Pertanian Bogor (IPB) - Indonesia" Institute for Global Environmental Strategies (IGES) Japan" Kyoto University Japan" Mizuho Information & Research Institute Japan" National Institute for Environmental Studies (NIES) Japan" UN University Institute of Advance Studies Japan"

27 POWER SECTOR LOW CARBON ENERGY SYSTEM pg. 27

28 TRANSPORTATION SECTOR LOW CARBON ENERGY SYSTEM pg. 28

29 INDUSTRIAL SECTOR LOW CARBON ENERGY SYSTEM CEMENT INDUSTRY" IRON & STEEL" pg. 29

30 RESIDENTIAL SECTOR LOW CARBON ENERGY SYSTEM pg. 30