The DREAM approach to demand-side emissions reductions in Indonesia, 2020–2060

Indonesia’s current energy system modeling is heavily focused on the supply side, but emissions reductions in the demand sector have a significant impact on advancing Indonesia’s ambitious emissions reductions goals. To address the gap, we develop a new modeling tool DREAM Indonesia based on a bottom-up, technology-rich demand side framework and formulate projections of demand-side emissions reductions in Indonesia in 2020–2060. We find that demand-side energy efficiency and electrification can halve the growth rate of final energy demand to 1.4% annually over 2020–2060 and reverse the growing trend of emissions. The feasibility of full electrification by 2060, coupled with rapid adoption of existing technologies, positions the building sector as a model for achievable decarbonization and a cornerstone of Indonesia’s emissions reductions ambitions. In the industrial sector, extensive emissions reductions of 87% by 2060 (compared to business-as-usual) are achievable through energy efficiency improvements, alongside enhanced material efficiency measures including optimized material usage, low-carbon substitutions, innovative technologies, and increased circularity. In the transportation sector, balancing final energy demand by incorporating energy efficiency improvements across all transport modes, along with electrification particularly in road transportation, could decrease the emissions by up to 82% in 2060 compared to business-as-usual. This study provides insights and modeling approaches for rapidly growing Asian economies as well as other developing countries facing combined development and decarbonization challenges.