Supply- and demand-side effects of power sector planning with CO2 mitigation constraints in a developing country

In this paper, the implications of CO2 emission mitigation constraints in the power sector planning in Indonesia are examined using a long term integrated resource planning model. An approach is developed to assess the contributions of supply- and demand-side effects to the changes in CO2, SO2 and NOx emissions from the power sector due to constraints on CO2 emissions. The results show that while both supply- and demand-side effects would act towards the reduction of CO2, SO2 and NOx emissions, the supply-side options would play the dominant role in emission mitigations from the power sector in Indonesia. The CO2 abatement cost would increase from US$7.8 to US$9.4 per ton of CO2, while the electricity price would increase by 3.1 to 19.8% if the annual CO2 emission reduction target is raised from 10 to 25%.