Strategies for Indonesia's low carbon energy transition based on a participatory energy system dynamic model

Abstract

Managing energy transitions in developing countries is essential to ensuring a stable and affordable energy supply for both society and industry. The social, economic, and environmental impacts of this transition are typically assessed using various energy models, with dynamic system approaches providing a more comprehensive representation than conventional methods. This study presents an Indonesia's energy system dynamics model, co-developed with key stakeholders—including experts from technical ministries, research institutions, NGOs, and energy companies—to evaluate energy security policies. A participatory approach enabled stakeholders to define the model's structure, select data, formulate policy scenarios, and assess simulation outcomes through meetings and focus group discussions, ensuring transparency and credibility. Stakeholders also play a crucial role in implementing scenario analyses and simulation insights. Notably, they emphasize the importance of maintaining fossil fuel supplies toward energy security, highlighting that policy modeling in Indonesia cannot overlook fossil fuel considerations. The resulting Participatory Energy System Dynamics Model (P/ESDM) integrates five interconnected sub-models: Demography and Macroeconomics, Final Energy Demand and Total Emissions, Total Energy Supply, Policy Interventions, and Impact Assessments. P/ESDM was applied to simulate eight policy scenarios, including oil production strategies, crude oil export restrictions, refinery capacity expansion, electric vehicle promotion, biodiesel blend mandates, renewable energy capacity expansion, coal production management, and urban gas network development. Policy implications are derived from simulation results, and the model offers adaptability for other nations pursuing energy security.