Policy Development for the Energy Mix in Indonesia Using System Dynamics

Abstract

Objective - This paper discusses a literature review regarding finding system dynamics modeling as the preferred approach to building the national energy system model in Indonesia and introduces the uniqueness of the initial system dynamics model of the Indonesia energy mix today. Methodology/Technique - A literature review about system modeling of energy portfolio management worldwide to find the research gaps and to screen for the preferred modeling approach for the country. Along with past statistics in the background, a combination of system dynamics modeling and focus group discussion is subsequently expected to answer the research questions, bridge the research gaps, and contribute a new invention to management science. Findings - The theoretical testing reveals that system dynamics modeling is suitable to simplify and simulate very large, complex dynamic systems of energy supply that get feedback from many subsystems in non-linear fashions and is a good methodology for holistic approaches to understand underlying behavior over time, taking into account all sorts of feedback, including time delays and feedback loops, and those cannot be easily represented by conventional models, vastly applied in a study of sustainable development. Novelty - The uniqueness of the proposed system dynamics approach lies in the inclusion of a series of new variables developed from common characteristic impediments in public policy development using a traditional non-simulation approach, besides its focus on the unprecedented energy supply quality side of the archipelagic country with its unique parameters being highlighted. Type of Paper: Review Keywords: Portfolio Management; Past Performance; System Dynamic Modelling; Initial Model of Energy Close Loop Diagram of Indonesia Today. JEL Classification: Q40, Q48.