30th USAEE/IAAA North American Conference 9th-12th October 2011

Modeling Geothermal as Low Carbon Source in Indonesia

Joni JupestaJSPS-UNU Postdoctoral Fellow

United Nations University- Institute of Advanced StudiesYokohama-Japan 1

2

Agenda

• Background• Methodology• Data and scenario settings• Results and discussions• Conclusion

Indonesia

Source: Worldbank and Indonesia‘s Ministry of Energy and Mineral Resources, 2010

Population in 2010 (inh) 231 mio

GDP in 2010 (US$) 700 billion

Income per capita (US$) 3,000

Land area (km square) 1,919,440

Energy consumption (Mboe) 891.64

Transportation (Mboe) 226.09

Indonesia at the Glance

Energy Mix Policy in 2006

Hydro3%

Geothermal1%

Oil52%Coal

15%

Gas 29%

Hydro, others

5% Geo5%

Oil20%

Coal 33%

Gas 32%

Biofuel5%

Energy Mix 2006 Energy Mix 2025

4

Shift Oil to Biofuel and Geothermal.Source: Indonesia Ministry of Energy and Mineral Resources,2006

5

Climate Change in IndonesiaClimate Change cause is: Greenhouse Gas (GHG) emissions.GHG emission in 2005: Global 45,667 MtCO2eq. Indonesia 2.055 Mt CO2eq.

78%

Source: Indonesia National Climate Change Commission,2010

Energy Vision 25/25 in 2010: Changing Future Energy Mix

6Source: Indonesia National Energy Agency, 2010

7

Shift from Oil to Geothermal

Source: Indonesia Ministry of Energy and Mineral Resources, 2010

8

Energy Reserves and Production

Source: Indonesia Ministry of Energy and Mineral Resources, 2010

Methodology

Methodology: Partial equilibrium (Non linear programming)

Tool: GAMS , Model: GEOTHERM (based on GLOBAL 2100 model)

Time: 2007-2040 (3years step time)

Objective function: Max. UTILITY

Subject to:

UTILITY =

=Y0(RG)/L0(RG)/SHARENEGISHI (RG)

SHARE =sum (RG, Y0 (RG)/L0(RG)

Y0 (RG)

While: = Output in 2007 (million US$)

L0 (RG) =Population in 2007 (million)

BETA (T) = annual discount factor (0.9)

C (T,RG)= Consumption in t year (mio US$)

L (T,RG) =Population in t year (million)

Data and Scenario Setting

Scenario:

1. Business As Usual : Follow government energy policy

2. Technology: Including the learning by R&D and economies of scale

Java Sumatera Kalimantan Others

Population (106) a

1980 91.22 28 6.72 21.92007 143.75 48 12.63 21.27

Income (billion US$) a

1980 37.51 20.15 6.25 5.572007 236.82 87.85 35.04 21.62Demand (Mtoe) b

1980 19.8 8.77 1.95 2.462007 75.02 33.21 7.38 9.3ESUB c 0.3 0.3 0.3 0.3KPVS c 0.3 0.3 0.3 0.3ELVS c 0.33 0.33 0.33 0.33Discount rate (%) 6 6 6 6

Depreciation rate (%) 10 5 5 5

source: a(BPS Statistics Indonesia, 2009); b source: (Sugiyono, 1995), (Ministry of Energy and Mineral Resources, 2009); c source: (Manne, 1992)

Supply side (BAU scenario)

2007 2010 2013 2016 2019 2022 2025 2028 2031 2034 2037 20400

200

400

600

800

1000

1200

Biofuel Biomass

Geothermal Hydropower

Oil Gas

Coal

Tot

al e

nerg

y pr

oduc

tion

(M

toe)

1.6%

12

2007 2010 2013 2016 2019 2022 2025 2028 2031 2034 2037 20400

300

600

900

1200

#REF!

#REF!

#REF!

Tot

al e

nerg

y de

man

d (M

toe)

Demand side (BAU scenario)

13

Technological Change of Geothermal

2007 2010 2013 2016 2019 2022 2025 2028 2031 2034 2037 20400

30

60

90

120

150

180

BAU

Technology

Tot

al e

ner

gy p

rod

uct

ion

(M

toe)

3.4%

GDP, Population and Electricity efficiency

2007 2040

GDP (billion US$) 204.70 2,376.73

Population (million) 224.88 310.95

Electricity efficiency (-) 0.32 0.35

GDP percapita (US$) 910.26 7,643.50

CO2 emission (mton-CO2) 245.48 3,343.33

1. The energy supply increases tenfold up to 1,091 Mtoe from 2007 to 2040 in the `Business As Usual` scenario. The highest increment comes from coal, gas, oil, hydro, geothermal, biomass and biofuel respectively.

2. The energy demand grows in line with the GDP growth. Comparing all these sectors, the highest increment is to come from industry, transportation and other sectors put together respectively. The increments between 2007 to 2040 are 18.6, 6.8 and 3.8 times for industry, transportation and others respectively.

3. The geothermal could supply in 2040 at value 180 Mtoe under `Technology` scenario compares with 5.9 Mtoe under`Business as Usual` scenario. Still, this amount in 2025 is only represent 3.4% from the energy mix, lower than 5% target in Energy Mix Policy.

4. GDP grow at rate 7.8% per year. The population increases by1% per year resulting in 311million people in 2040 and the electricity efficiency is growing from 0.32 in 2007 to 0.35 in 2040. The CO2 emissions increase from 246 Mtoe to 3,343 Mtoe from 2007 to 2040 under `Business as Usual` scenario.

Conclusion

Thank you!

For further information please contact :

Joni JupestaUnited Nations University- Institute of Advanced Studiesjupesta@ias.unu.edu