The Indonesian Government’s Role in Setting Renewable Energy Targets to Reduce GHG Emissions from the Electrical Energy Sector

Greenhouse gas (GHG) emissions are being blamed for global warming, and the Indonesian government is concerned about it. The government has proven its concern for GHG reduction by participating in the Intergovernmental Panel on Climate Change and signing the Paris Agreement. In order to meet the Nationally Determined Contribution (NDC) target in the National Energy General Plan (RUEN) 2015-2050, the government has issued regulations and plans designed to achieve the objective of producing up to 31% of the nation’s electrical energy from renewable sources by 2050. The RUEN transcription in the General Plan of Regional Energy (RUED) will be implemented in the RUED of West Papua (RUED-P), which is expected to reach the target of 33% of the energy production from renewable sources by . The main issues with implementing NDC targets in RUEN and RUED-P are related to time and costs. This paper investigates the effectiveness of current and proposed government regulations in achieving Indonesia's NDC target by 2030 through the implementation of RUEN and RUED-P in the province of West Papua. The simulation results show that the target of achieving the NDC target of a 29% reduction in GHGs through RUEN can be surpassed. The potential exists to achieve a reduction of 54,363 tons CO2e (or 30.01%), compared to the ‘business as usual’ (BAU) scenario of 77.619 tons CO2e. However, the NDC target of a 41% reduction by 2050 will not be met as implemention of the West Papua regional scenario via the RUED-P will result in a GHG reduction of only 55,393 tons of CO2e, or 28.63% under this scenario. By imposing a 2030 target for energy production from renewable sources amounting to 33% of total generating capacity under RUED-P, the NDC target can actually be exceeded. Under every scenario, the state-owned electric company (PLN) operates at a deficit under current customer pricing. For this reason, the government needs to increase the basic electricity tariff to IDR 2,500 per kWh in order to support PLN operations and not burden the state's budget by subsidizing PLN’s losses.