System Dynamics Modelling for a Sustainable Natural Gas Supply and Demand in Indonesia to Meet up the Additional Demand of 52 Converted Power Plants

Abstract

US Trade Representatives at WTO had recently excluded Indonesia in the list of Least Developed countries. One of the reason behind the decision was that considering the potential economic of Indonesia that has consistently shown positive trend of growth. As the economic and population growth, the energy demand in Indonesia is also increasing over the time. Indonesia has an abundant natural gas reserves and in fact is the largest reserves in Southeast Asia. In line with the increasing of global awareness toward the sustainable development and environmental concerns, choices over an affordable source of energy with a less carbon footprint is inevitably. With the latest LNG technology, has made distribution even possible to reach remote areas of Indonesian archipelago. The Indonesian government had set up a strategy to promote the use of natural gas in power generation. The Ministerial Energy and Mining Resources Decree No. 13 K/13/MEM/2020 (Ministerial Energy and Mining Resources, 2020e) issued, January 2020, has mandated the state owned enterprise PERTAMINA to establish LNG supply within 2 years time frame to support the conversion of 52 power plants from diesel fueled to natural gas. This study, is offering stages of research, first is determining supply and demand of natural gas in Indonesia, and then conducting a market analysis. A market review analysis on gas supply and demand is done upon various sectors, ie power plants (in relation to additional demand for the conversion of 52 power plants), industries, transportation and households. From which, it will be analyzed, whether or not the gas supply meet the demand. The result of the simulation is revealing the fact that there will be deficit of supply starting sometime in 2031 (much earlier than Asia Pacific Energy Research Centre’s prediction by 2040), with short gap of about 55 MTPA by end of simulation time, thus if the Government is deciding to maintain the existing export commitment.