An Energy-Economy Model to Evaluate the Future Energy Demand-Supply System in Indonesia

Abstract

   Energy resources in Indonesia are characterized by limited oil reserves, sufficient gas reserves and abundant coal reserves. Therefore, it is important to make optimal strategies for the national energy demand-supply system for the long future. Energy-economy model is one of the tools for the energy decision-maker to perform it.
   The model is formulated as an inter-temporal optimization model with two-way linkages between the energy sectors and the balance of the economy. The whole country is divided into four regions. The model is benchmarked against 1990 base year statistics. The evaluations cover for ten-year time intervals extending from 2000 through 2030. The model contains five types of primary energy sources: coal, natural gas, crude oil, biomass and other renewable energy which involves hydropower and geothermal energy. A software called General Algebraic Modeling System (GAMS) is used to solve the problem on 386 compatible personal computer.
   The result show that abundant coal reserves make coal attractive as the major domestic energy supply in Indonesia. These huge amounts using coal seem to create high emission of air pollutants. The second major energy supply is natural gas and followed by crude oil. Crude oil supply is expected not growing significantly due to limited of resource.

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