Volume 65

Feasibility of Carbon Neutrality in Indonesia’s Power Sector by 2050: A Multi-Region Optimization without Carbon Pricing Joshua Christopher Lim, Yali Xue, Zheng Li, Yujuan Fang

Abstract

As an archipelagic nation, Indonesia faces large geographic imbalances between the location of energy resources and major demand centers. To assess the feasibility of carbon neutrality, we develop a cost-minimizing, multi-region power system model for 2024–2050, incorporating 21 nodes, 25 generation technologies, and 22 inter-node transmission lines (5 existing, 17 candidates). In the baseline pathway without carbon pricing, total system expenditures reach $833 billion by 2050, renewables account for only 29% of generation, and net CO₂ emissions remain at 146 Mt. These results indicate that, under current conditions and in the absence of carbon penalties, Indonesia’s power sector fail to achieve carbon neutrality by mid-century. The findings highlight the limits of power plant efficiency improvements alone and underscore the importance of policy mechanisms.

Keywords carbon neutrality, multi region model, Indonesia, power sector, optimization