System dynamics modeling of leveraging geothermal potential in Indonesia towards emission reduction effort: A case study in Indonesia state-owned energy enterprise

Abstract

In the face of the global climate crisis, geothermal energy emerges as a crucial, sustainable, and low-carbon solution to reduce greenhouse gas emissions and foster economic growth. Despite significant research into geothermal energy in Indonesia, gaps remain in understanding how dynamic interactions among variables can enhance its potential for emission reduction. Therefore, this research aims to identify and analyze the variables influencing geothermal development and their impact on emissions. Employing the system dynamics approach, the study examines the interactions among key factors such as economic growth, energy demand, and policy measures over a projected period from 2022 to 2122. Key findings reveal that strategic interventions like increasing the carbon credit price, implementing carbon taxes, and enhancing renewable energy mix can dramatically reduce national and internal company emissions while advancing geothermal capacity. The study recommends robust government policies and incentives to foster investment in renewable energy, highlighting the crucial role of financial strategies and external funding in achieving Indonesia’s geothermal targets efficiently.