National energy policy; a least cost option

The recent Fukushima daiichi Nuclear power plant (NPP) accident caused by Tsunami has changed the shape of the world towards the safety of nuclear power generation. The view on NPP has changed literally not because of the accident itself, but more to the perspective of the global society to the advance technology and high integrated and discipline country which unfortunately is not enough to secure the NPP from natural disaster. The latest draft of the National Energy Policy (NEP) from the National Energy Council (DEN) of Indonesia, which will be discussed in the Commission VII of the house representatives, revealed a target of electricity consumption of between 710 to 910 TWh in 2030 and around 2,100 to 2,710 TWh in 2050. However, due to the low capacity of the currently available power plants (30.5 GW) the state owned electricity company (PLN) needs to boost its capacity to up to 450 GW by 2050, i.e. the capacity needs to go up by a factor of 15. For achieving the 2050 target PLN needs to invest in the range of 27.3bn US$ for an all natural gas power plant scenario (NG) up to 1.47tn US$ for a solar cell scenario by 2050 (without considering fuel cost, operational and maintenance as well as other costs). The Optimum energy mix involves a 30% share of renewable energy (RE) and new energy (NE) and 70% fossil based fuel in 2030. However these optimum electricity mixes do not include the objective estimation of the optimum cost (minimum cost) as well as how to minimize CO
₂
emissions. Considering the huge increase in capacity that will be required in the future to meet these targets, the optimum function in terms of the economics of the system should be analyzed in order to minimize the costs. This paper will analyze the possible optimum cost (minimum cost) for the Indonesian electricity power generations mix in 2030 and 2050 and compare it to current NEP draft which will be used as a reference scenario.