The role of renewable energy to achieve net zero emissions: A cost-benefit analysis of Indonesia's power sector transition
Year: 2025
Type: article
Abstract: • The study explores low-carbon technology adoption to mitigate global warming. • The Indonesian government's roadmap targets NZE for the power sector transition. • Shifting from fossil power to renewables is critical to achieve NZE target. • A cost-benefit analysis shows a $4510.3B net gain for NZE with a 2.1 % tariff rise. • These findings show NZE is viable without a strict timeline and offers net benefits. To mitigate global warming, Indonesia must transition from fossil-based to renewable power generation. This study applies a CBA to assess BAU and NZE scenarios. Modeling results indicate that NZE is optimally achieved by 2075, later than the government’s 2060 target, reflecting coal plant lifetimes, gradual CCS integration, substituting fossil-based power plants with new renewable energy-based power plants, and current investment patterns. This study employed a least-cost optimization approach applied exclusively to the electricity generation mix modeled within the LEAP and NEMO framework. Sensitivity analyses conducted on electricity tariff growth rates and carbon pricing to assess the robustness of the NZE pathway. The results indicate that the cost–benefit analysis yields a positive net benefit of USD 4510.3 billion, supported by a 2.1 % annual tariff escalation and a carbon price of USD 25 per ton of CO₂, confirming that the NZE pathway is economically feasible. These findings provide policy-relevant insights, showing that while NZE by 2075 is cost-optimal, alignment with the 2060 commitment demands urgent policy action and sustained financial support.
Source: Results in Engineering
Authors: Ira Fitriana, Hadiyanto, Budi Warsito, Edi Hilmawan, Joko Santosa, Agus Sugiyono
Language: English
Field: Energy
Domain: Physical Sciences
Open Access status: gold
Estimated APC paid: $1,940
OpenAlex ID: W7108241836