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Modeling technological changes in the biofuel production system in Indonesia

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  • Jupesta, Joni

Abstract

In Indonesia, the high subsidy on fossil fuel significantly burdens the country’s economy. The partial replacement of fossil fuel by biofuel in the transportation sector would significantly reduce fossil oil consumption. To enable this replacement, a model was built to predict the effects of biofuel in the energy system. This paper examines the importance of technological changes in biofuel production. The objective is to find the optimal net energy balance under land and technology constraints. An optimization model to find this optimum was developed by using GAMS as a tool to provide the optimal answer about the potential of biofuel production in Indonesia in a scenario of technology development and a base scenario. The model shows that a net energy balance can be achieved with up to 3.8kPJ in the technology scenario and 0.9kPJ in the base scenario (a scenario describing present government policy). The export value could rise to 33 billion US$ in the technology scenario. In the base scenario, the export value of biofuel drops from 7 billion US$ in 2023 and further declines thereafter due to the low growth in land allocation whilst domestic demand is increasing. The lowest production cost is achieved with palm oil production at 9.5 US$/GJ in 2025. The net emission balance in the base scenario could achieve 54Mtce, while in the technology scenario it could achieve 212Mtce. The technology scenario relies on technological changes through R&D and economies of scale, which are not considered in the base scenario. The outcome of the model is that technological changes could have a positive impact on the introduction of biofuel in the transportation sector in Indonesia, i.e.: a higher net energy balance, higher export value, lower production cost and higher net emission balance.

Suggested Citation

  • Jupesta, Joni, 2012. "Modeling technological changes in the biofuel production system in Indonesia," Applied Energy, Elsevier, vol. 90(1), pages 211-217.
    • Handle: RePEc:eee:appene:v:90:y:2012:i:1:p:211-217
    DOI: 10.1016/j.apenergy.2011.02.020
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    Cited by:

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    4. Fatimah, Yuti Ariani & Raven, Rob P.J.M. & Arora, Saurabh, 2015. "Scripts in transition: Protective spaces of Indonesian biofuel villages," Technological Forecasting and Social Change, Elsevier, vol. 99(C), pages 1-13.
    5. Deendarlianto, & Widyaparaga, Adhika & Sopha, Bertha Maya & Budiman, Arief & Muthohar, Imam & Setiawan, Indra Chandra & Lindasista, Alia & Soemardjito, Joewono & Oka, Kazutaka, 2017. "Scenarios analysis of energy mix for road transportation sector in Indonesia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 13-23.
    6. Satya Widya Yudha & Benny Tjahjono & Athanasios Kolios, 2018. "A PESTLE Policy Mapping and Stakeholder Analysis of Indonesia’s Fossil Fuel Energy Industry," Energies, MDPI, vol. 11(5), pages 1-22, May.
    7. Ucok W.R. Siagian & Bintang B. Yuwono & Shinichiro Fujimori & Toshihiko Masui, 2017. "Low-Carbon Energy Development in Indonesia in Alignment with Intended Nationally Determined Contribution (INDC) by 2030," Energies, MDPI, vol. 10(1), pages 1-15, January.
    8. Wise, Marshall & Dooley, James & Luckow, Patrick & Calvin, Katherine & Kyle, Page, 2014. "Agriculture, land use, energy and carbon emission impacts of global biofuel mandates to mid-century," Applied Energy, Elsevier, vol. 114(C), pages 763-773.

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