IDEAS home Printed from https://ideas.repec.org/a/taf/bindes/v54y2018i2p233-264.html
   My bibliography  Save this article

Financing Renewable Energy in Indonesia: A CGE Analysis of Feed-In Tariff Schemes

Author

Listed:
  • Herbert Wibert Victor Hasudungan
  • Sulthon Sjahril Sabaruddin

Abstract

This paper examines the impact of promoting clean (renewable) energy production through feed-in tariff (FIT) schemes on Indonesia’s economy and on greenhouse gas (GHG) emissions. For numerical analysis, we designed a hybrid computable general equilibrium (CGE) model that explicitly incorporates electricity generation technologies. The Indonesian FITs have been stipulated in Government Regulation No. 79/2014 on National Energy Policy. We assume that the government sets a 15% subsidy rate for renewable generation technologies. Two possible financing schemes are implemented: (i) the FIT is paid by electricity consumers through the endogenous electricity tax rate; and (ii) the FIT is financed by a carbon tax adjustment. The results show that the effects of both FIT scenarios on macroeconomic and CO2 emission accounts are negligible. These negligible effects are due to the low shares of renewables (geothermal and hydro) generation load in total electricity mix. Therefore, we argue that Indonesia’s current FIT regulation is insufficient to boost the national clean energy production and therefore is ineffective to reduce the national emissions.

Suggested Citation

  • Herbert Wibert Victor Hasudungan & Sulthon Sjahril Sabaruddin, 2018. "Financing Renewable Energy in Indonesia: A CGE Analysis of Feed-In Tariff Schemes," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 54(2), pages 233-264, May.
    • Handle: RePEc:taf:bindes:v:54:y:2018:i:2:p:233-264
    DOI: 10.1080/00074918.2018.1450961
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00074918.2018.1450961
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00074918.2018.1450961?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yuventus Effendi & Budy P. Resosudarmo, 2022. "Development of renewable electricity in ASEAN countries: socio-economic and environmental impacts," Asia-Pacific Journal of Regional Science, Springer, vol. 6(1), pages 247-266, February.
    2. Dzyuba, Yu. & Bakalova, I., 2023. "CGE models for resource-based economy: A comprehensive bibliometric analysis," Journal of the New Economic Association, New Economic Association, vol. 61(4), pages 12-50.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:bindes:v:54:y:2018:i:2:p:233-264. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CBIE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.