Overall modelling Assumptions: Indonesia Energy Transition Outlook

Power Sector Assessment

Prepared by the Renewable Energy Agency (IRENA)

Confidential – Do Not Circulate

There were a number of open questions following the discussion between the staff of IRENA and PLN
on the 24th of February regarding the power sector expansion of the Indonesia Energy Transition
Outlook. Key questions that remain from IRENA in this regard are presented below, and a response to
these would greatly help the refinement and understanding of the technology portfolios developed
and their sensitivities to various parameters and assumptions underpinning the analysis:
• Demand projections across the scenarios BES, PES, TES and DES range from 5.4% to 6.2%
depending on the scenario considered. Nodal demand growth is assumed to be proportionally
spread across the model nodes in line with today's values. In other words, the same regional
shares of today are considered regarding the total national load (ex., 43% for West Java). It
should be noted that the solar rooftop generation is not discounted from demand at this
stage. What is your opinion on this, any specific consideration?
o Would you mention demand growth rates per region based on your internal
discussion? Do they consider electric vehicles?
o Will more demand growth proportionally occur outside of Java due to the relocation
of the capital city to Kalimantan?
o Is the demand projection of approximately 3% per year mentioned in the meeting for
Java net of rooftop PV generation?
• In the IRENA TES and DES scenarios, there is a very significant expansion of utility solar PV
which is particularly concentrated in some nodes (as shown in Table 3), how does this nodal
expansion compare with other national analyses performed? What is the anticipated
expansion of rooftop PV capacity?
• The role of CCS is an open question across all scenarios considered but even at 90% CO2
capture rate, there are still significant emissions. What role is envisaged nationally for gas,
coal and biomass based CCS technologies? To date, the study has shown that limited share of
fossil fuel capacity with CCS is cost-effective, even considering carbon costs of up to 150 USD
per tonne. A sensitivy on this could be performed.
• The role of nuclear is considered in IRENA scenarios but fails to come through on a least cost
basis (as can be seen in results shown in Table 6, using costs as shown in Table 1). What role
is envisaged nationally for Nuclear? Should this be reflected in the scenarios developed? Is
there any other Nuclear energy-related parameter we should consider (cost or non-cost
related)?
• Interconnection: there are very high-capacity transmission lines in particular between
Sumatra and Java. Investments result from the model optimization. Costs can be seen in the
corresponding section below with a standard cost per MWkm for HVDC and AC lines, and node
distances (Figure 1). How reasonable are they? Please let us know if there is anything else we
should consider or what sensitivities could be performed in this regard.
• Battery storage reaches a capacity of 147GW in 2050 in the IRENA DES scenario, while
pumped storage reaches 86 GW (as shown in Table 8). This is quite significant and also implies
 a role for flexible demand such as that which electric vehicels can provide. To what extend has
this been explored nationally? Investment costs can be seen in Table 1.
• Electric vehicles have been represented based on an EV fleet forecast by 2050 (light vehicles,
motorcycles, others). We consider that 10% of the fleet is inflexible, for which demand is flat
for each hour of the day. The remaining 90% of the fleet is deemed flexible, which means that
charging moments occur when energy prices are lower (including during the night). We also
consider that a maximum of 30% of the fleet can charge simultaneously. Any observations on
that?
• Hydrogen: A set of assumptions have been made for hydrogen on a global model. Hydrogen
domestic production would be 43.5 PJ/yr, most of it as green hydrogen, And demand is split
into 23.5 PJ/yr (High-value chemicals), 106 PJ/yr (as a feedstock for Ammonia), and 20 PJ (as
a feedstock for methanol). Still, we lack any local policy for hydrogen production and use on
end-uses. It should bear in mind that green hydrogen production has obvious relationships
with the power sector and can help integrating renewables
• The nature of modelling makes cost parameters and sensitivities to these costs key to the
analysis. How do the costs shared in Table 1 compare with other national studies and those
considered by PLN?

Additional notes from the meeting:

1. CCS and Co-Firing related to Coal CCS:

We are currently considering CCS to varying degrees across the scenarios and all CCS
technologies have a capture rate of 90%. The remaining emissions in the power sector are for
a large part, resultant from these CCS technologies. Our modelling considers potential for
Biomass overall (including CCS, based of the DEA technology catalogue) of about 33GW and
while it is significant, its growth potential is limited and could not negate the majority of
emissions if co-fired with coal due to this limit on capacity expansion and projected power
demand growth.
2. Generation technology and battery costs: What values are used for these investment costs?
Investment costs considered are shown in (Table 1), these are largely sourced from the DEA
technology catalogue for Indonesia unless otherwise indicated.
3. To what extent is a zero carbon system achieved: What does it mean to be zero carbon with
a remaining share of Gas and Coal?
With an assumed capture rate of 90% there are remaining CO2 emissions from these
tehcnologies but renewables can signficantly lower these when coupled with a retirement of
unabated coal fired generation. Please see table 4 for further information on the scenarios.
4. RE potential : ESDM’s new RE potential is much higher than last year.
There is a difference between technical and theoretical potential, and even further for
economic potential. The PV potential has been quantified based on a GIS tool which
considered exclusion areas (ex., forests, urban areas, others) and the solar resource quality.
The potential used in the study is presented in table 3.
 1. Modelling Assumptions and Scenario Development

The model has been developed using the PLEXOS modelling platform (using both long- and short-term
modelling capabilities), with 18 nodes (as below) representing the Indonesian power system. It is
based on hourly data for renewables and demand profiles and a range of technology databases and
renewable potentials.

Model Nodes

SM_1: Sumatra - South, Lampung- SW_1: Sulawesi - South,

Kal_4: Kalimantan - South
Bengkulu, Bangka Beitung Southeast

JV_1: Java - West Java, Jakarta.

SM_2: Sumatra - West, Jambi, Riau SW_2: Sulawesi - Central, West
Banten

JV_2: Java - Central Java- SW_3: Sulawesi - Gorontalo-

SM_3: Sumatra - North-Aceh
Yogyakarta North

Kal_1: Kalimantan - North JV_3: Java - East Java WNG: Western New Guinea

Kal_2: Kalimantan - West LSI_1: LesserSunda I. - Bali MLK: Maluku Islands

LSI_2: LesserSunda I. - East Nusa SW_1: Sulawesi - South,

Kal_3: Kalimantan - East, Central
Tenggara Southeast

Kal 2 SW 1
Kal 3 SW 2 SW 3
WNG
SM 3 Kal 1

SM 2 Kal 4

SM 1

JV 1

JV 2

JV 3
LSI 1
LSI 2
LSI 3 MLK
Technology Database and Potentials
The model relies on the DEA technology catalogue for vast majority of these inputs for the modelling
of Indonesian power sector, which themselves are based on a range of reputable national sources in
terms of both technologies and the renewable energy potentials of hydropower, geothermal and
bioenergy. The capital cost assumptions are presented below in Table 1. All these costs are derived
from the DEA technology catalogue, aside from Nuclear and Carbon Capture and Storage (CCS)
technologies. Note that cost assumptions for Nuclear and CCS technologies were derived based on
those provided in the Annual Technology Baseline produced by NREL due to them being more in line
with values seen in a literature review. The technology catalogue of the US Energy Information
Administration and that of the Joint Research Centre of the European Commission were also consulted
in a sensitivity assessment of technology costs and their impact on modelling results.

Table 1: CAPEX costs used in power system expansion modelling

Nominal investment (M$/MWe) 2018 2030 2040 2050

Geothermal power plant - large system (flash or dry) 4000 3440 3140 2840
Geothermal power plant - small system (binary or condensing) 5000 4300 3925 3550
Hydro power plant - large system 2080 2000 1925 1850
Hydro power plant - Medium system 2290 2200 2120 2040
Hydro power plant - Mini/micro system 2700 2590 2495 2400
Hydro power plant - Mini/micro system 2700 2590 2495 2400
Wind power - Onshore 1500 1280 1180 1080
Wind power - Offshore 3500 2980 2750 2520
Wind power - Small onshore wind turbines < 1 MW 4000 3400 3140 2880
Tidal power - Impoundment Type 5500 5100 5100 5100
Tidal power - Stream Type 5300 4600 4000 3400
Nuclear Light Water Reactor 7400 6850 6400 5850
Subcritical coal power plant 1650 1600 1575 1550
Supercritical coal power plant 1400 1360 1340 1320
Ultra-supercritical coal power plant 1520 1480 1455 1430
IGCC 2400 2210 2125 2040
Simple Cycle Gas Turbine - large system 770 730 705 680
Combined Cycle Gas Turbine 690 660 635 610
Supercritical coal power plant with CCS (90% CO2 capture) 6000 5400 4500 3700
Natural Gas Combined Cycle with CCS (90% CO2 capture) 2500 2300 1900 1600
Biomass power plant (small plant - palm oil / rice husk) 2000 1820 1710 1600
Biomass CCS (90% CO2 capture) 7132 6990 5700 5100
Incineration Power Plant - Municipal Solid Waste 6800 6300 5950 5600
Landfill Gas Power Plant - Municipal Solid Waste 2500 2500 2500 2500
Biogas power plant 2150 1960 1840 1720
Diesel engine (using fuel oil) 800 800 790 780
Batteries - Lithium-ion (utility-scale) (USD per kWh) 578 264 210.5 157
 Utility-scale Solar PV 790 560 485 410
Industrial PV - Large scale grid connected 1190 840 730 620
Rooftop PV grid connected 1320 940 815 690
Floating PV - Large scale grid connected 890 660 570 480

In terms of fuel prices used in the model, they follow a regional projection of costs as per IRENA
analysis in IRENA’s World Energy Transitions Outlook, as shown in Table 2.

Table 2: Fuel price assumptions

Year Biomass Coal Oil Natural Gas Nuclear

2018 5 3 14.9 10.4 2.1

2030 6.5 2.8 13.6 13.6 2.1

2040 6.5 2.9 13.3 13.3 2.1

2050 6.5 2.9 13.3 13.3 2.1

The renewable energy potentials and hourly profiles for solar PV and wind generation were
determined in conjunction with the FBK research institute. Solar plays a key role across the scenarios
considered, this information is presented in Table 3. These were inputs to the model and were highly
influential in the optimisation of the capacity expansion. Note that the capacity factor achieved in the
model results may be lower than reflected in the table due to curtailment of solar power due to
operational constraints in certain periods or excess supply.

Table 3: Solar PV capacity factors, potentials, and installed capacity in DES 2050

Capacity Factor DES 2050 Installed (MW) Potential (MW) Potential Use in DES 2050
JV_1 17% 44300 44270 100%
JV_2 17% 23850 23830 100%
JV_3 18% 28693 36570 78%
Kal_1 18% 41105.5 262830 16%
Kal_2 15% 9613.5 160580 6%
Kal_3 15% 0 252500 0%
Kal_4 17% 41192.5 177690 23%
LSI_1 18% 1200 4170 29%
LSI_2 18% 49500 50490 98%
LSI_3 18% 101599.5 419660 24%
MLK 14% 2772.5 74970 4%
SM_1 17% 32738.5 175930 19%
SM_2 17% 249234 356380 70%
SM_3 17% 300000 509390 59%
SW_1 17% 12727.5 184120 7%
SW_2 18% 8689 61570 14%
SW_3 18% 11573.5 25590 45%
WNG 15% 3442.5 123760 3%
Interconnection Capacity
We are using a set line cost per unit distance for transmission expansion. We are considering HVDC
(3000 USD per MWkm) for inter-island (ex., Java West-Sumatra South) and AC lines (700 USD per
MWkm) and intra-island (ex., Kalimantan North-Central) based on a review of the literature. The
distances between nodes that were used are presented in Figure 1. These costs, HVDC in particular,
have significant uncertainty attached to them given their very nature.

We then prepared a set of all possible expansion candidates with a cost per MW based on this cost by
line type and distance between the nodes. Given the uncertainty in the rollout of such cables, a
simplified and transparent approach like this was the most readily practicable. We have also captured
losses on these lines based on distance and line type and have placed a wheeling charge on the lines
per MWh just to constrain power flows to better reflect reality, these losses were 3.5% and 6.5% per
1000km for HVDC and AC lines respectively.
Km JV_1 JV_2 JV_3 Kal_1 Kal_2 Kal_3 Kal_4 LSI_1 LSI_2 LSI_3 MLK SM_1 SM_2 SM_3 SW_1 SW_2 SW_3 WNG
JV_1 - 407 663 1,232 741 1,047 917 952 1,593 1,274 2,603 426 872 1,130 1,398 1,608 1,836 3,465
JV_2 407 - 257 890 785 716 616 546 1,186 867 2,222 771 1,231 1,536 1,016 1,267 1,505 3,073
JV_3 663 257 - 690 889 537 483 297 930 613 1,977 1,003 1,461 1,792 775 1,057 1,299 2,821
Kal_1 1,232 890 690 - 986 185 331 624 708 605 1,395 1,422 1,820 2,315 289 378 615 2,277
Kal_2 741 785 889 986 0 834 689 1,135 1,616 1,372 2,339 604 879 1,492 1,257 1,285 1,459 3,227
Kal_3 1,047 716 537 185 834 - 152 540 799 619 1,578 1,241 1,646 2,131 424 560 793 2,458
Kal_4 917 616 483 331 689 152 - 570 931 717 1,726 1,091 1,494 1,985 574 696 920 2,608
LSI_1 952 546 297 624 1,135 540 570 - 648 324 1,751 1,301 1,757 2,078 593 937 1,175 2,571
LSI_2 1,593 1,186 930 708 1,616 799 931 648 - 326 1,169 1,910 2,355 2,722 431 738 898 1,940
LSI_3 1,274 867 613 605 1,372 619 717 324 326 0 1,464 1,608 2,060 2,401 425 800 1,014 2,260
MLK 2,603 2,222 1,977 1,395 2,339 1,578 1,726 1,751 1,169 1,464 0 2,817 3,203 3,708 1,207 1,055 901 888
SM_1 426 771 1,003 1,422 604 1,241 1,091 1,301 1,910 1,608 2,817 0 461 911 1,643 1,775 1,980 3,698
SM_2 872 1,231 1,461 1,820 879 1,646 1,494 1,757 2,355 2,060 3,203 461 - 699 2,062 2,150 2,335 4,090
SM_3 1,130 1,536 1,792 2,315 1,492 2,131 1,985 2,078 2,722 2,401 3,708 911 699 - 2,513 2,677 2,888 4,581
SW_1 1,398 1,016 775 289 1,257 424 574 593 431 425 1,207 1,643 2,062 2,513 - 375 597 2,069
SW_2 1,608 1,267 1,057 378 1,285 560 696 937 738 800 1,055 1,775 2,150 2,677 375 - 242 1,943
SW_3 1,836 1,505 1,299 615 1,459 793 920 1,175 898 1,014 901 1,980 2,335 2,888 597 242 0 1,781
WNG 3,465 3,073 2,821 2,277 3,227 2,458 2,608 2,571 1,940 2,260 888 3,698 4,090 4,581 2,069 1,943 1,781 -

Figure 1: Distance as calculated between model nodes

Scenario definition
All scenarios capture the planned expansion outlined in the RUPTL 2021 up to the year 2030 and
historical installed capacity distribution by node based on generator level information from the Platts
dataset. With these considerations in mind the below scenarios were prepared.
Simulation Key questions
• How will the system develop without
constraints on CO2 or fossil fuel
BES expansion?
• What measures are needed to avert such
expansion?
• What are the implications and costs of the
recent declaration at COP26?
• How much CO2 needs to be sequestered?
PES • How does coal reliance limit VRE penetration
in the system?
• What level of infrastructure expansion is
needed?
• How can VRE reduce costs if used in place of
a significant share of coal CCS?
• How does this affect the CO2 that needs to
TES
be sequestered?
• What level of infrastructure expansion is
needed?
• What are the implications of maximising RE
and minimising fossil CCS further?
DES
• What level of infrastructure expansion is
needed?
Specific assumptions by scenario may be seen in Table 4.
Insights from the analysis
• Very significant fossil fuel expansion with minimal RE expansion unless
policy is enacted to avert it
• Promotion of RE is essential in the planning process and removal of non-cost
barriers needed for expansion
• Reliance on old technologies will lead to significant increase in emissions
• High use of local coal resources creates a dependence on an uncertain
technology, failure to achieve such ambitions would result in enormous
reliance on unabated coal by default
• CO2 pipelines would need to be rolled out nationwide at very significant cost
• More expensive than scenarios that rely on higher shares of RE
• Greater reliance on VRE requires greater power network expansion but
lowers CO2 storage requirement
• Solar power plays a significant role still despite system flexibility limitations
of coal CCS
• While ambitious it shows a near zero emission power sector is
technologically possible for Indonesia
• Biomass coupled with Carbon capture performs a critical role in the sector
in terms of flexibility and making use of waste products
• Highest Solar PV penetration and power network expansion of all the
scenarios requires new operational practices
• Lack of coal use in DES creates a need for alternative dispatchable
generation sources
 Table 4: Key assumptions across scenarios

Compound Annual Electricity CO2 price VRE penetration limit Capacity constraints on
Demand Growthrate expansion of generation
capacity
BES • 5.4% per year • $0 • 20% of generation • None
PES • 5.4% per year • Gradual rise to $50 • 40% of generation • No unabated coal
per tonne by 2050 expansion post
2040
• Existing unabated
coal generation
limited to 50%
capacity factor post
2040
• No gas CCS
available
TES • 5.9% per year • Gradual rise to • 60% of generation • No unabated coal
$150 per tonne by expansion post
2050 2040
• Existing unabated
coal generation
limited to 25%
capacity factor post
2040
• No gas CCS
available
DES • 6.2% per year • Gradual rise to • 60% of generation • No unabated coal
$150 per tonne by expansion post
2050 2040
• Existing unabated
coal generation
limited to 0%
capacity factor post
2040
• No coal CCS
available
Annual Load and Peak Load by Model Node in 2050 for all scenarios
• Load growth rates are different for each scenario (PES, TES, DES) due to different
electrification rates and other aspects. Nevertheless, load shares per region are the same
along the entire period (2020-2050) – please see below in Table 5.

Table 5: Annual load and peak load by model node in 2050 for all scenarios

PES 2050 PES 2050 TES 2050 TES 2050 DES 2050 DES 2050
Regional Annual Load Peak Load Annual Load Peak Load Annual Load Peak Load
shares (%) (GWh) (MW) (GWh) (MW) (GWh) (MW)
JV_1 43.2% 691,787 81,294 811,561 95,328 881,827 103,108
JV_2 10.7% 171,944 20,435 201,713 25,770 219,178 26,330
JV_3 15.0% 240,126 28,261 281,701 33,604 306,091 35,877
Kal_1 0.1% 1,435 172 1,683 199 1,829 221
Kal_2 1.1% 17,569 2,101 20,611 2,436 22,395 2,708
Kal_3 2.3% 36,392 4,353 42,693 5,048 46,389 5,610
Kal_4 1.3% 21,179 2,475 24,846 3,083 26,997 3,187
LSI_1 2.4% 38,699 4,375 45,399 5,437 49,329 5,614
LSI_2 0.4% 6,689 800 7,847 928 8,526 1,031
LSI_3 0.8% 12,458 1,490 14,615 1,729 15,881 1,921
MLK 0.5% 7,826 936 9,180 1,085 9,975 1,206
SM_1 5.4% 85,771 10,155 100,621 12,823 109,333 13,084
SM_2 5.0% 79,310 9,699 93,041 11,720 101,097 12,502
SM_3 5.8% 93,510 11,058 109,700 12,681 119,198 14,016
SW_1 3.7% 58,961 7,007 69,169 8,837 75,158 9,029
SW_2 0.7% 10,484 1,238 12,299 1,420 13,364 1,568
SW_3 1.0% 15,974 1,915 18,739 2,359 20,362 2,468
WNG 0.7% 11,890 1,422 13,948 1,649 15,156 1,832
Overview of Model LT Expansion Results
Table 6: Overview of model long term expansion results

LT Expansion results BES 2050 PES 2050 TES 2050 DES 2050
Based on
RUPTL but
with a
sigificant
Least cost share of coal Based on
expansion CCS RUPTL but
based on in future to with a higher Highest
planned reflect share of peneration
RUPTL COP26 renewables of RE
capacity ambitions than PES capacity
Power Capacity
Geothermal 6,096 8,096 20,396 27,796 MW
Hydropower 27,549 42,046 59,999 70,986 MW
Nuclear - - - - MW
Ocean Energy - - - - MW
Offshore Wind - - - - MW
Onshore Wind 354 13,461 15,043 20,298 MW
Other - - - - MW
Solar CSP - - - - MW
Solar PV Rooftop - - 59,200 51,293 MW
Solar PV Utility 215,987 391,764 670,624 915,810 MW
Thermal- Oil 11,257 11,257 11,257 11,257 MW
Thermal-Biogas - - - - MW
Thermal-Biomass 5,682 5,682 10,810 5,682 MW
Thermal-Biomass CCS - - - 14,865 MW
Thermal-Coal 144,369 10,000 1,000 - MW
Thermal-Coal CCS - 39,200 47,715 - MW
Thermal-Gas CCS - - - 138,643 MW
Thermal-Hydrogen - - - - MW
Thermal-Municipal Solid Waste - - - - MW
Thermal-Natural Gas 27,067 40,898 27,067 27,067 MW
Power Generation
Geothermal 46,568 62,518 124,826 157,048 GWh
Hydropower 92,087 142,957 196,086 219,018 GWh
Nuclear - - - - GWh
Ocean Energy - - - - GWh
Offshore Wind - - - - GWh
Onshore Wind 666 35,765 32,825 26,523 GWh
Other - - - - GWh
Solar CSP - - - - GWh
Solar PV Rooftop - - 90,478 66,897 GWh
Solar PV Utility 325,085 598,307 926,774 944,292 GWh
Thermal- Oil 39,114 41,801 38,115 37,605 GWh
Thermal-Biogas - - - - GWh
Thermal-Biomass 23,722 24,850 28,897 18,177 GWh
Thermal-Biomass CCS - - - 65,109 GWh
Thermal-Coal 991,488 232,574 221,929 - GWh
Thermal-Coal CCS - 280,153 193,659 - GWh
Thermal-Gas CCS - - - 487,930 GWh
Thermal-Hydrogen - - - - GWh
Thermal-Municipal Solid Waste - - - - GWh
Thermal-Natural Gas 92,616 206,655 74,114 73,360 GWh
RE Shares and Emissions
RE Capacity Share 58% 82% 91% 86%
RE Generation Share 30% 53% 73% 71%
Total Emissions 1,315 800 943 84 Mt
Emissions intensity 816 492 489 40 gCO2 per kWh
 Table 7: DES Scenario Storage Capacity (2050)

Battery Pumped Storage

Power Pumped
Power Capacity Battery Energy
Node Capacity Energy
(GW) (GWh)
(GW) (GWh)
JV_1 4.6 22.9 0 0

JV_2 4.7 23.5 0.04 0.2

JV_3 6.4 31.8 0.04 0.2

Kal_1 4.1 20.6 1.66 10

Kal_2 0.0 0.0 0.00 0

Kal_3 0.5 2.5 0.00 0

Kal_4 3.9 19.7 0.00 0

LSI_1 0.2 0.8 0.01 0.04

LSI_2 5.7 28.6 16.60 100

LSI_3 9.3 46.4 8.30 50

MLK 0.7 3.6 0.00 0

SM_1 70.6 352.9 33.20 199

SM_2 31.3 156.5 24.90 149

SM_3 3.5 17.4 0.00 0

SW_1 0.0 0.0 0.83 5

SW_2 0.4 2.1 0.11 1

SW_3 1.4 6.8 0.58 3

WNG 0.1 0.3 0.00 0

Total 147.3 736.3 86.3 517.6

Table 8: DES Scenario: Transmission capacity 2050

Export/Import
Node 1 Node 2
limit

JV_2 JV_1 7.30

JV_3 JV_2 10.00
Kal_3 Kal_1 3.00
Kal_3 Kal_4 1.00
Kal_4 JV_3 16.00
Kal_4 Kal_1 7.00
Kal_4 Kal_2 1.00
LSI_1 JV_3 15.40
LSI_2 LSI_1 9.00
LSI_3 LSI_1 10.00
LSI_3 LSI_2 3.00
SM_1 JV_1 80.00
SM_2 SM_1 36.80
SM_2 SM_3 1.90
SW_1 Kal_1 1.00
SW_2 SW_1 3.30
SW_3 SW_1 2.00
SW_3 SW_2 1.00