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Cost-Benefit Analysis For Indonesia Building Sector: Whole-Building Cooling Solutions

The Net Zero World (NZW) Initiative Collaborative Work Program with the Government of Indonesia (GoI) includes technical assistance and investment mobilization facilitation to accelerate deployment of energy efficiency technologies and solutions for the building sector. A February 2023 U.S.–Indonesia Joint Workshop on Decarbonizing the Building Sector yielded a NZW Indonesia Building Decarbonization Working Group (NZW IBDWG) with four sub-working groups (SWG): SWG-A National Center, SWG-B Capacity Building, SWG-C Investment and Financing, and SWG-D Pilot Projects. Technical analysis of whole-building cooling solutions for tropical climates of Indonesia was conducted by SWG-A to quantify energy savings, carbon dioxide reductions, and comfort improvements offered by 12 passive or low-energy cooling strategies: ceiling fans with and without thermostat setbacks; cool roofs; cool walls; exterior awnings; exterior shades; interior shades; insulated roofs; insulated walls; low-e windows; solar window films; and natural ventilation. Leveraging the results from SWG-A, cost-benefit analysis (CBA) was conducted by SWG-C to assess the consumer and national costs and impacts associated with these 12 cooling solutions. The evaluation involved estimating life-cycle costs (LCC), payback period (PBP), net present values (NPV), annual electricity burden change for low-income households, and reduced national annual power-sector generation demand by 2030, 2040, 2050, and 2060. This evaluation can help guide Indonesia’s Just Energy Transition Partnership (JETP) investments in policies and programs to advance research, development, deployment, and commercial adoption (RDDCA) of efficient residential building sector cooling technologies and solutions in Indonesia. Four key energy conservation measures (ECM) have been identified to reduce air-conditioning (AC) energy demand in single-family housing in Indonesia: ceiling fan with temperature setback (to 28.1 °Celcius from 25 °C); insulated walls; insulated roof; and cool roof. This study found that low-income households with AC installations in Indonesia currently face a high energy cost burden of approximately 10%. However, by implementing a ceiling fan with temperature setback, this burden could decrease to 2.5% today and further reduce to 1.3% by the year 2060. The PBP for a ceiling fan with temperature setback is one year, indicating one of the lowest LCC and best NPV. In the planned upcoming phase of CBA, a series of building cooling improvement scenarios can be further defined, incorporating more than one ECM in combination with socio-economic factors evaluated in the initial CBA phase. Additionally, the analysis of ECM effects in multifamily housing can be expanded. This broader national analysis aims to encompass a holistic and comprehensive system-level perspective, including factors such as avoided power sector infrastructure investments, domestic job creation, domestic manufacturing job creation, and gross domestic product (GDP) growth.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Phase II Cost-Benefit Analysis: Economic Impact Assessment For Indonesia Building Sector Whole-Building Cooling Solutions

The Net Zero World (NZW) Initiative Collaborative Work Program with the Government of Indonesia (GoI) includes technical assistance and investment mobilization facilitation to accelerate deployment of energy efficiency technologies and solutions for the building sector. A February 2023 US–Indonesia Joint Workshop on Decarbonizing the Building Sector yielded a NZW Indonesia Building Decarbonization Working Group (NZW IBDWG) with four sub working groups (SWGs): SWG-A National Center, SWG-B Capacity Building, SWG-C Investment and Financing, and SWG-D Pilot Projects.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

Nuclear Energy Cost Estimates for Net Zero World Initiative

This report provides recommended parameters for incorporating nuclear energy systems into decarbonization modeling scenarios. The values are primarily intended for the Net Zero World (NZW) Initiative but are expected to prove useful to other related efforts. Both costs and operational metrics are provided in the study. Several cost factors, namely overnight capital costs (OCC) and operational costs are taken to be country specific. OCC is defined as the value of building the reactor in one night considering all costs prior to the start of operations including fuel for the initial core load. The value assumes the build is neither a first nor a ‘Nth’ of a kind, but somewhere in between. All costs are escalated to 2022 USD values.

22 GENERAL STUDIES OF NUCLEAR REACTORS↗

Nuclear Energy Cost Estimates for Net Zero World Initiative – 2024 Update

This report provides recommended parameters for incorporating nuclear energy systems into decarbonization modeling scenarios. The values are primarily intended for the Net Zero World (NZW) Initiative but are expected to prove useful to other related efforts. Both costs and operational metrics are provided in the study for large reactors and small modular reactors (SMR).

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Technical Geothermal Roadmap for Indonesia

The technical geothermal roadmapping exercise described by this report is part of the NZW Collaborative Work Program with the Government of Indonesia. Indonesia currently has the second largest installed geothermal power generation capacity in the world and has abundant undeveloped resources that allow for continued expansion of its geothermal resource development, which can serve to contribute to the country’s goal of achieving net zero emissions for power generation by 2060. The DOE GeoVision study (2019) highlighted the importance of technical improvements as the key for accelerating the development of geothermal resources in the United States by reducing the costs and risks to make geothermal more competitive, and this also applies to Indonesia. The main objective of the roadmap is to identify and discuss key technical challenges and discuss how implementation of geothermal technology advances could reduce the risks, costs, and time associated with geothermal exploration and development activities and expand the potential resource base to include unconventional resource types, thus accelerating geothermal deployment in Indonesia.

15 GEOTHERMAL ENERGY↗

COP28 Outcomes Report: Executive Summary

Net Zero World, launched at COP26, is a flagship U.S. effort to partner with countries in accelerating transitions to clean energy systems. This initiative brings together world-class experts and resources from 10 U.S. Department of Energy national laboratories and nine U.S. government agencies. Collaboratively, they work with technical and government representatives from Argentina, Chile, Egypt, Indonesia, Nigeria, Singapore, Thailand, and Ukraine to advance decarbonization in these economies.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Tierra del Fuego Case Study Capacity Expansion Analysis

This case study, developed by Net Zero World Initiative and the Government of Argentina, examines least-cost decarbonization pathways for Tierra del Fuego, Argentina, utilizing renewable energy, energy storage, hydrogen, and other decarbonization technologies. Being the second largest natural gas producing province in Argentina, Tierra del Fuego has historically relied on natural gas for their energy sector needs. As they look at possible decarbonization pathways, they face challenges due to extreme weather conditions, isolation from the mainland, and low population density. The study utilizes the Engage web application for capacity expansion modeling, addressing both business-as-usual (BAU) and accelerated decarbonization scenarios, with varying degrees of electrification and carbon emission constraints. Key findings reveal that an interconnection with the mainland, high contribution of wind energy development on Tierra del Fuego, energy storage, and hydrogen, coupled with energy-efficient electrification technologies (such as heat pumps and electric vehicles), emerge as the most cost-effective solutions to decarbonize, significantly reducing carbon emissions and total system energy costs. The study explores self-generation and interconnection alternatives, demonstrating the economic advantage of an interconnection of Tierra del Fuego with the mainland, as an alternative to 100% local generation. Sensitivity analyses on wind data sources and temporal resolutions, as well as projected natural gas prices, highlight the influence of external factors on the feasibility of decarbonization pathways. Challenges identified include the practicality of phasing out natural gas, economic uncertainty, cost implications of long-term storage technologies as wind energy increases, and geographical limitations for wind generation. The case study concludes that while substantial emissions reductions can be achieved by 2050, and be competitive with conventional pathways, achieving a full 100% decarbonization by 2050 would entail higher costs, particularly due to the significant reliance on storage solutions with higher contribution of wind energy. The analysis offers valuable insights for policymakers and stakeholders in Argentina's energy sector, emphasizing the importance of strategic planning, investment in renewable energy and storage technologies, and careful consideration of local conditions in the transition towards Net Zero targets.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗