1. 30th USAEE/IAAA North American Conference 9th-12th October 2011 Modeling Geothermal as Low Carbon Source in Indonesia Joni Jupesta JSPS-UNU Postdoctoral Fellow United Nations University- Institute of Advanced Studies Yokohama-Japan 1

2. 2 Agenda Background Methodology Data and scenario settings Results and discussions Conclusion

3. 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

4. Energy Mix Policy in 2006 4 Shift Oil to Biofuel and Geothermal. Source: Indonesia Ministry of Energy and Mineral Resources,2006

5. 5 Climate Change in Indonesia Climate 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

6. Energy Vision 25/25 in 2010: Changing Future Energy Mix 6 Source: Indonesia National Energy Agency, 2010

7. 7 Shift from Oil to Geothermal Source: Indonesia Ministry of Energy and Mineral Resources, 2010

8. 8 Energy Reserves and Production Source: Indonesia Ministry of Energy and Mineral Resources, 2010

9. 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)/SHARE NEGISHI (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)

10. 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 JavaSumateraKalimantanOthers Population (10 6 ) a 198091.22286.7221.9 2007143.754812.6321.27 Income (billion US$) a 198037.5120.156.255.57 2007236.8287.8535.0421.62 Demand (Mtoe) b 198019.88.771.952.46 200775.0233.217.389.3 ESUB c 0.3 KPVS c 0.3 ELVS c 0.33 Discount rate (%)6666 Depreciation rate (%)10555 source: a (BPS Statistics Indonesia, 2009); b source: (Sugiyono, 1995), (Ministry of Energy and Mineral Resources, 2009); c source: (Manne, 1992)

11. Supply side (BAU scenario)

12. 12 Demand side (BAU scenario)

13. 13 Technological Change of Geothermal 3.4%

14. GDP, Population and Electricity efficiency 20072040 GDP (billion US$)204.702,376.73 Population (million)224.88310.95 Electricity efficiency (-)0.320.35 GDP percapita (US$)910.267,643.50 CO 2 emission (mton-CO2)245.483,343.33

15. 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 CO 2 emissions increase from 246 Mtoe to 3,343 Mtoe from 2007 to 2040 under `Business as Usual` scenario. Conclusion

16. Thank you! For further information please contact : Joni Jupesta United Nations University- Institute of Advanced Studies jupesta@ias.unu.edu