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The Impact Of Geothermal Energy Sector Development On Electricity Sector In Indonesia Economy

Author

Listed:
  • Nayasari Aissa

    (University of Indonesia)

  • Djoni Hartono

    (University of Indonesia)

Abstract

Energy is one of the most important inputs that supports Indonesia’s economy. The government utilises coal and oil as the main sources for power plants energy mix. However, the utilization of fossil fuel energy has been proven to pose negative impacts on the environment such as, increasing carbon dioxide emission which leads to global warming. This study analyses investment policy on increasing electricity production of geothermal power plants as well as substitution of fossil energy to geothermal energy using Computable General Equilibrium (CGE) Model and Indonesia’s data of Social Accounting Matrix 2008. The result shows that when investment on the substitution of energy from fossil to renewable energy takes place, economic growth will increase and carbon dioxide emission will reduce significantly.

Suggested Citation

  • Nayasari Aissa & Djoni Hartono, 2016. "The Impact Of Geothermal Energy Sector Development On Electricity Sector In Indonesia Economy," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 19(2), pages 153-176, October.
    • Handle: RePEc:idn:journl:v:19:y:2016:i:2b:p:153-176
    DOI: https://doi.org/10.21098/bemp.v19i2.628
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    CGE; Electricity; CO2 Emission; Fossil Energy; Geothermal; Growth;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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