The Potential of Renewable Energy to Replace Diesel Power Plants in Supporting Energy Transition in Indonesia

Abstract

The Indonesian government is committed to reducing greenhouse gas emissions under the Paris Agreement. One form of this commitment is the program to replace diesel power plants with renewable energy plants in the electricity sector. Fossil-based diesel power plant operations have disadvantages, such as relatively expensive generation costs and greenhouse gas emissions. There are three renewable energy technology options as potential substitutes for diesel power plants: a solar photovoltaic (PV) power plant integrated with a battery energy storage system (BESS), a small-scale geothermal power plant, and a micro-hydropower plant. This paper will analyze the prospects of each technology option based on its economic and environmental impact. Various technical parameters, including renewable energy potential and intermittent factors, as well as economic parameters such as investment and generation costs, are important factors for selecting prospective renewable energy generators. The analysis was carried out by calculating the levelized cost of electricity (LCOE), CO2 emissions, and oil fuel consumption for four different scenarios. The results of the analysis show that replacing the diesel power plants with micro-hydropower plants can reduce LCOE by 0.24 USD/kWh to 0.12 USD/kWh. The use of a solar PV power plant integrated with a BESS has the most potential to reduce CO2 emissions, which account for 54% of emissions from diesel power plants. Meanwhile, the potential for oil fuel reduction from this program can reach an annual average of 0.85 million kl.