End-Use Model for Indonesia Low-Carbon Development Pathways in Energy Sector

Transcription

1 End-Use Model for Indonesia Low-Carbon Development Pathways in Energy Sector Retno G Dewi - Ucok W.R. Siagian - Bintang Yuwono - Iwan Hendrawan - Rias Parinderati Tsukuba, 23 January 2015 Center for Research on Energy Policy 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 2

3 INTRODUCTION LCD is long term vision () of economic development in a low-carbon way Challenge for achieving LCD is now in a global mainstream. Particular emphasis in short-term () 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). 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. GHG SHARES 1.1 GTCO2eq (2010) 9% 5% 41% 31% 11% 3% Energy IPPU Agriculture Land-Use Change & Forestry Peat Fire Waste This publication 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 and. 3

4 SCIENTIFIC COMMUNITY ROLE Inputs for Government of Indonesia in developing energy policy Stakeholders Stakeholders (Energy Supply) President Approval! Ministry of Industry other Ministries Ministry of Transport MEMR (Ministry of Energy & Mineral Resources) (dra/) RUEN (Na2onal Energy Plan) DEN (National Energy Council) RUEN KEN (Na2onal Energy Policy) Parlement Stakeholders MODEL & others input SCIENTIFIC COMMUNITY 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 with domestic budget and further up to 41% with international support. GHG PROJECTION GHG Emissions level (Baseline) Emission level target Reduction target nonbinding commitment (26% or 41%) in 2030 In-line with Low Carbon Development Paths To achieve the target, the government developed mitigation actions plan that is published as National GHG Mitigation Action Plan (RAN GRK). 5

6 CURRENT ENERGY SITUATION Significant increased in energy demand over transportation and industrial sector. SECTORAL ENERGY DEMAND ( 90-12) FINAL ENERGY DEMAND ( 90-12) toe toe A & others Transportation Commercial Household Industry Industrial biomass LPG Electricity Gas Fuel Coal source: Pusdatin ESDM 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. 6

7 END-USE MODELLING Energy' Energy'Technology' Energy'Service' 'Coal' 'Oil' 'Gas' 'Renewables' 'Electricity' 'Blast'furnace' 'Power'genera>on' 'Air'condi>oner' 'Fluorescent' 'Automobile' 'Crude'steel'produc>on' 'Electricity'demand' 'Demand'for'hea>ng'and'cooling' 'Ligh>ng'' 'Passenger,'freight'transport' Flow of REAL WORLD Energy'Consump>on' CO 2 'emission' Technology' Selec>on' ' Energy'Service'Demand' Flow of SIMULATION Energy'Database' Technology'Database' SocioLeconomic'scenarios' 'Energy'type' 'Energy'price' 'Energy'constra>ns' 'CO 2 'emission'factor' 'Technology'cost' (Ini>al'cost,'running'cost)' 'Energy'consump>on' 'Service'supply' 'Diffusion'rate' 'Life>me' 'Popula>on'growth' 'Economic'growth' 'Industrial'structure' 'Employment' 'Lifestyle' 7

8 END-USE MODELLING Non-linear programming (GAMs End-Use & Extended Snap Shot) is used as a tool for developing energy development paths and estimating associated GHGs. Two projection scenarios are developed: envisions development paths of energy sector and the associated GHG emission without considering mitigation efforts Mitigation (1&2) development paths to achieve low carbon through: efficiency & conservation; advance technologies; renewables; CCS Base year for projection scenarios is and target year is and Energy demand projection is gathered from ExSS results. Analysis of socio-economic data (driving forces) projects the final energy demand. 8

9 SOCIO-ECONOMIC PROJECTION (Driving Forces) Input Parameters to ExSS Modelling. POPULATION INDUSTRIAL OUTPUT Millions > % 80% 60% Tertiary Industries Cement Iron & Steel Other Industry Construction Chemical Industry Textile Food & Beverage Mining & Quarryng Agriculture 40% % Trillions IDR POPULATION GROWTH 2 Population GDP 15 GDP GROWTH source: BPS 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. 12!!11.2!! 10!!10.1!!!9.5!! 8!!7.0!!!6.7!!!6.7!! 6!!5.9!! 4! 2!!1.0!!!1.2!!!1.4!!!1.0!!!2.6!!!1.0!!!2.2!!!2.1!!!2.1!!!1.0!!!3.2!!!3.0!!!2.7!! 0!!!!!!!!! 1! 2!! 1! 2!!! 1! 2!! 1! 2!!!!! Popula7on! GDP! Energy!Demand! CO2!Emission! Counter Measure () 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). 10

11 LOW CARBON DEVELOPMENT PATHS This model assess the impacts of different measures in LCS Actions. LOW CARBON DEVELOPMENT STRATEGY LCS Actions Clean Energy (Residential and Commercial) Low Carbon Style (Residential and Commercial) Low Carbon Electricity Low carbon energy system in industry Renewable energy or Less CO2 Emission Energy Less CO2 Emission Energy Technology Society Behavior in Residential /Commercial Efficient energy technology appliances Renewable energy & Less CO2 Emission Energy Efficient energy technology of power generation Less CO2 Emission Energy Technology (Coal IGCC + CCS) Increasing Efficiency of T & D Renewable energy or Less CO2 Emission Energy Efficient energy technology appliances Efficient energy process and processing technology Sustainable transport Renewable energy or Less CO2 Emission Energy modal shift (public/mass rapid transport utilization) Energy Efficiency Improvement Reduce trip generation and distance (improve Infrastructure, telecommunication, new urban design, traffic management 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, , , , , , , , , , 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 12

13 CURRENT ENERGY SITUATION In 2 there are nuclear and Coal-CCS being introduced. ENERGY MIX GHG EMISSION toe toe 1,200,000 4, ,000 3, ,000 2, ,000 1, , 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%). 13

14 POWER SECTOR LOW CARBON ENERGY SYSTEM Counter Measure 1 follows the RAN-GRK plan in increasing the utilization of new and renewable technologies and energies (Solar, 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. GHG EMISSIONS MITIGATION MITIGATION COST COST MtCO2eq 1, DEVICE SETTING millions USD 250,000 Total Operating Cost Annualized Investment Cost Total Initial Investment Cost TXM 1,440 EL_COL_ST_EXT EL_GAS_ST_EXT EL_GAS_GT_EXT EL_GAS_CC_EXT EL_GAS_GE_EXT EL_GAS_CC_NEW EL_ELY_EXT EL_ELY_NEW EL_BMS_ST_EXT EL_SOL_EXT EL_RHY_EXT EL_RGE_EXT EL_OIL_ST_EXT EL_OIL_GT_EXT EL_OIL_CC_EXT EL_OIL_DE_EXT EL_BMS_IG_NEW EL_NUC_EXT EL_COL_SC_CC EL_COL_IGCC EL_COL_IGCC_CC EL_GAS_CC_NEWx 200,000 1, % 150, ,000 50, % FINAL ENERGY SUPPLY 60% SERVICE OUTPUT Mtoe Mtoe 1 2 1, CCS Nuclear Biofuel Blended Bio-fuel Geothermal Hydro Solar Biomass Oil Gas Coal 40% 20% Counter Measure 2 maximizes the potency of 1 through extensification in the use of Carbon Capture Technologies, Nuclear Power, and especially the introduction of Biofuel in power sector. Further decrease in electricity demand than 1. With a specified share of Coal in the energy mix (66%), the rest of energy share are competed, as well as the technology selection. Advance technologies are introduced and competed with existing technologies, and Biofuel is introduced promptly in the power sector. 14

15 POWER SECTOR LOW CARBON ENERGY SYSTEM ABATEMENT COST CURVE USD/tCO2eq 100 Biomass ST COST/SAVINGS Gas CC with CCS Geothermal IGCC Coal with CCS Nuclear Hydro tco2eq GHG REDUCTION 15

16 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). GHG EMISSIONS MITIGATION COST MtCO2eq 400, DEVICE SETTING millions USD 700,000 Total Operating Cost Annualized Investment Cost Total Initial Investment Cost 320, ,000 TFADOI_EXT TFADOI_HEF1 TFADOI_NEW TFAIOI_EXT TFAIOI_HEF1 TFAIOI_NEW TFNDOI_EXT TFNDOI_HEF1 TFNIOI_EXT TFNIOI_HEF1 TFRLOT_EXT TFTLOI_EXT TFTLOI_HEF1 TFTLOI_NEW TPADOI_EXT TPADOI_HEF1 TPADOI_NEW TPAIOI_EXT TPAIOI_HEF1 TPAIOI_NEW TPBSOI_EXT TPBSOI_NEW TPNDOI_EXT TPNDOI_HEF1 TPNIOI_EXT TPNIOI_HEF1 TPPCOD_EXT TPPCOD_NEW TPPCOG_EXT TPPCOG_HEF1 TPPCOG_NEW TPPCOM_EXT TPPCOM_NEW TPRLEL_EXT TPRLOT_EXT 560, , , % 280,000 80, ,000 80% FINAL ENERGY SUPPLY 60% SERVICE OUTPUT Mtoe 150,000 Oil Gas Electricity Biofuel Passenger Km 2,200,000 P_ P_ F_ F_ Tonnage Km 3,000, ,000 40% 1,760,000 2,500,000 90,000 2,000,000 60,000 20% 1,320,000 1,500, ,000 30,000 1,000, , , Efficiency and Conservations program through RAN-GRK reduce the service demand of transportation in passenger km as well as tonnage-freight km. In Counter Measure Scenario there are introduction of advanced technologies in transportation that enables lower emission as well as lower energy consumption. 16

17 TRANSPORTATION SECTOR LOW CARBON ENERGY SYSTEM DEVICE SETTING 100% TBBFD_B TBBFD_D TBBFDR_B TBBFDR_D TBBFG_B TBBFG_G TBBFH_B TBBFH_H TFADOI_EXT TFADOI_HEF1 TFADOI_NEW TFAIOI_EXT TFAIOI_HEF1 TFAIOI_NEW TFNDOI_EXT TFNDOI_HEF1 TFNIOI_EXT TFNIOI_HEF1 TFRLOT_EXT TFTLOI_EXT TFTLOI_HEF1 TFTLOI_NEW TPADOI_EXT TPADOI_HEF1 TPADOI_NEW TPAIOI_EXT TPAIOI_HEF1 TPAIOI_NEW TPBSOI_EXT TPBSOI_NEW TPNDOI_EXT TPNDOI_HEF1 TPNIOI_EXT TPNIOI_HEF1 TPPCOD_EXT TPPCOD_NEW TPPCOG_EXT TPPCOG_HEF1 TPPCOG_NEW TPPCOM_EXT TPPCOM_NEW TPRLEL_EXT TPRLOT_EXT 80% 60% 40% 20% PASSENGER FREIGHT Passenger Km Car Bus Train Motorcycle Ship Airplane Walk Bike Tonnage Km Truck Train Ship Airplane 2,500,000 3,000,000 2,000,000 2,400,000 1,500,000 1,800,000 1,000,000 1,200, , , The high increase of passenger train usage has a significance impact in reducing GHG emission in transportation sector, the use of train takes a great portion of private cars and motorcyclists in the mode share. Shifting to a mass and centralized transportation system has a great impact in reducing GHG emission as well as increasing the efficiency of transporting activity. 17

18 TRANSPORTATION SECTOR LOW CARBON ENERGY SYSTEM ABATEMENT COST CURVE USD/tCO2eq 400 Biofuel 300 COST/SAVINGS Gasoline pass.-car (flow) Ely. Pass. Rail (hi-eff) & (flow) Large-size truck (flow) Bus(flow) hi-eff aircraft-intl. & domestic flight-freight Motorcycle (flow) hi-eff intl. & domestic naval transport-freight tco2eq GHG REDUCTION 18

19 CEMENT + IRON & STEEL INDUSTRY LOW CARBON ENERGY SYSTEM In Business as Usual scenario there are a limited introduction of alternative material in the production process of cement industry. In Counter Measure Scenario 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. Advanced technologies increases efficiency in energy usage. GHG EMISSIONS MITIGATION COST MtCO2eq 160 _EMS _EMS _IPPU _IPPU DEVICE SETTING millions USD 10,000 Total Operating Cost Annualized Investment Cost Total Initial Investment Cost 128 IC_G_EXT IC_C_EXT IC_F_EXT IS_B_CG0 IS_B_CG1 IS_B_EXT IS_B_TR0 IS_B_TR1 IS_C_CG0 IS_C_CQ0 IS_C_EXT IS_DR_EXT IS_E_EXT IS_E_PR0 IS_L_EXT IS_L_LG0 IS_L_LG1 IS_R_EXT IS_RK_EXT IS_S_EXT IS_C_CG1 IS_C_CQ1 IS_B_TR2 IS_E_PR1 8, % 6, , % 2, FINAL ENERGY SUPPLY 60% SERVICE OUTPUT Mtoe 30 Coal Electricity AFR Biomass Natural Gas MTonnage (Cement) 180 Cement Steel MTonnage (Steel) 12,000 40% , % 108 6, , Business as Usual scenario has limited domestic (local) process and activities. There are imports in the middle production chain through foreign process (e.g. Pelletization process and most Pig Iron Process). In, Blast Furnace process will be running under PT. Krakatau Steel and POSCO Steel Ltd.. 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 an energy intensive industry. 19

20 INDUSTRIAL SECTOR LOW CARBON ENERGY SYSTEM ABATEMENT COST CURVE USD/tCO2eq CEMENT USD/tCO2eq IRON & STEEL Continuos Casting (BAT) Blast Furnace (BAT) +CCS COST/SAVINGS Vertical Mill Cement Mix COST/SAVINGS BOG Recovery BFG & COG Recovery CDQ Scrap pre-heater Dry TRT tco2eq GHG REDUCTION 20

21 RESIDENTIAL SECTOR LOW CARBON ENERGY SYSTEM Efficiency and Conservations program through RAN-GRK reduce the service demand of residential sector. In 1 there are introduction of advanced technologies in home appliances and fixtures enables lower emission as well as lower energy consumption. Biogas is introduced in 1 with a limited penetration to the market. There are also shift in technologies, into technologies that use electricity as energy source (e.g. electric stove, electric heater, etc.). GHG EMISSIONS MITIGATION COST MtCO2eq DEVICE SETTING RC_EL_BAT RC_EL_EXT RF_EL_BAT RF_EL_EXT RH_EL_BAT RH_EL_EXT RH_NG_EXT RH_OK_EXT RK_EL_BAT RK_EL_EXT RK_NG_EXT RK_OK_EXT RL_EL_FLC RL_EL_INC RL_EL_LED RO_EL_BAT RO_EL_EXT millions USD 300, ,000 Total Operating Cost Annualized Investment Cost Total Initial Investment Cost % 180, , % 60, FINAL ENERGY SUPPLY 60% SERVICE OUTPUT Mtoe 100 Biogas Electricity Natural Gas Oil (Kerosene) Mtoe 60 Cooking Cooling Hot Water Lighting Other Refrigerant 80 40% % The scenario has a mere small impact of GHG reduction due to high intensity of energy usage. In average households in Indonesia are urban sprawl, with less population density implicating to more energy usage per square meter of land-capita. 21

22 RESIDENTIAL SECTOR LOW CARBON ENERGY SYSTEM ABATEMENT COST CURVE USD/tCO2eq 1,800 Electric Cooking Range 1,600 1,400 Air Conditioner (advanced) Refrigerant (advanced) 1,200 COST/SAVINGS 1, Other Equipment (advanced) LED Fluorescent Heat Pump Water-heater (advanced) Biofuel tco2eq GHG REDUCTION 22

23 COMMERCIAL SECTOR LOW CARBON ENERGY SYSTEM Commercial sector consists of buildings operating as office, market place, restaurant, and hotel and leisure services. Commercial sector in Indonesia has about 4% share of total energy consumption. Most of the energy consumption is on other electrical equipment (i.e. elevators, escalators, etc.). Space cooling is the largest energy consuming specified equipment, acknowledge that Indonesia is a tropical country with an average temperature of 28 c and over in the cities. GHG EMISSIONS MITIGATION COST MtCO2eq 1 DEVICE SETTING millions USD 300,000 Total Operating Cost Annualized Investment Cost Total Initial Investment Cost 0.8 GB_B GB_G RC_EL_BAT RC_EL_EXT RF_EL_BAT RF_EL_EXT RH_EL_BAT RH_EL_EXT RH_FC_EL RH_FC_NG RH_FC_OK RH_NG_EXT RH_OK_EXT RK_EL_BAT RK_EL_EXT RK_FC_EL RK_FC_NG RK_FC_OK RK_NG_EXT RK_OK_EXT RL_EL_FLC RL_EL_INC RL_EL_LED RO_EL_BAT RO_EL_EXT 240, % 180, , , % FINAL ENERGY SUPPLY 60% SERVICE OUTPUT Mtoe 0.11 Fuel Oil Natural Gas Biogas-Gas Mix Electricity Biogas Mtoe 0.08 Hot Water Refrigerant Space Cooling Cooking Lighting Other Equipments 40% % Efficiency and Conservations program through RAN-GRK reduce the service demand of commercial sector. In Counter Measure Scenario there are introduction of advanced technologies in commercial equipments and fixtures enables lower emission as well as lower energy consumption. Biogas is introduced in Scenario with a limited penetration to the market. 23

24 Acknowledgment NIES 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

25 End-Use Model for Indonesia Low-Carbon Development Pathways in Energy Sector Retno G Dewi - Ucok W.R. Siagian - Bintang Yuwono - Iwan Hendrawan - Rias Parinderati Tsukuba, 23 January 2015 Center for Research on Energy Policy INSTITUT TEKNOLOGI BANDUNG

26 POWER SECTOR LOW CARBON ENERGY SYSTEM 26

27 TRANSPORTATION SECTOR LOW CARBON ENERGY SYSTEM 27

28 CEMENT + IRON & STEEL INDUSTRY LOW CARBON ENERGY SYSTEM CEMENT INDUSTRY IRON & STEEL 28

29 RESIDENTIAL SECTOR LOW CARBON ENERGY SYSTEM 29

30 COMMERCIAL SECTOR LOW CARBON ENERGY SYSTEM 30