Trade-offs between electrification and climate change mitigation

Abstract

The power sector in many developing countries face challenges of a fast-rising electricity demand in urban areas and an urgency of improved electricity access in rural areas. In the context of climate change, these development needs are challenged by the vital goal of CO2 mitigation. This paper investigates plausible trade-offs between electrification and CO2 mitigation in a developing country context, taking Indonesia as a case study. Aligned with the 2015 Paris Agreement, the Government of Indonesia has announced its voluntary pledge to reduce 29% of its GHGs emissions against the business as usual scenario by 2030. 11% of this should be attained by the energy sector. We incorporate the Indonesian Paris pledge into the modelling of capacity expansion of the Java-Bali power system, which is the largest power system in Indonesia. The LEAP model is used for the analysis in this study. Firstly, we validate the LEAP model using historical data of the national electricity system. Secondly, we develop and analyse four scenarios of the Java-Bali power system expansion from the base year 2015 through to 2030. These include a reference scenario (REF) to reflect a continuation of the present energy mix (REF), then a shift from coal to natural gas (NGS) (natural gas), followed by an expansion of renewable energy (REN) and, finally, the least-cost option (OPT). The shift to natural gas decreases future CO2 emissions by 38.2 million ton, helping to achieve the CO2 mitigation target committed to. Likewise, an escalation of renewable energy development in the Java-Bali islands cuts the projected CO2 emissions by 38.9 million ton and, thus, assures meeting the target. The least-cost scenario attains the targeted emission reduction, but at 33% and 52% lower additional costs compared to NGS and REN, respectively. The cost-effectiveness of CO2 mitigation scenarios range from 14.9 to 41.8 US$/tCO2e.