Archive for category Sustainable Industrial Policy

Is Indonesia Ready for New Technology in Reducing CO2 Emission?

smoke-654072_960_720Green house gases (GHG) emission is one of the environmental issues that hasn’t been resolved and continued to increase annually. Carbon dioxide gas is known as the largest contributor for GHG emissions. This environmental issue also happens in Indonesia as a developing country which has focused on sustainable development. In 2020, the total emission of carbon dioxide gas in Indonesia is predicted around 960 million ton if there is no mitigation action.

Developed and developing countries are still looking for the effective technology to answer the emission issue. The carbon dioxide gas emission has to be reduced because if there is no immediate action, the impact is not only effected to the amount of emission itself in air but also to the health issue on human. If the air is heavily contaminated, people who live on that environment will get a health problem.

In the last fifteen years, researchers who focus on cleaner energy are looking for the effective technology which can lower the level of the CO2 emission. Developed countries have landed their first step to mitigate their emission of CO2 gas by using Carbon Capture and Storage (CCS) Technology. This kind of technology could effectively reduce the amount of CO2 emission in large-scale.

Indonesia is aware to the carbon dioxide gas emission issue. There are a few technologies that have been  used to reduce the emission, such as: using the alternative energy which produce cleaner emission than CO2, using a cleaner technology (in transportation), reducing the use of fossil fuel, etc. Carbon capture and storage technology is still new in Indonesia, and there is no enough information and study on it. The researcher in Universitas Indonesia (majoring Industrial Engineering) helps to find the answer to this new technology. Is Indonesia ready for new technology?

The increment of carbon dioxide gas emission keeps increasing annually. Globally, there is a significant difference in incremental of the emission. From 1970 to 2000, the rise of the emission was only 1,3% per year but, from 2000 to 2010, the escalation reaches to 2,2% per year. These circumstances stand on the entire world because the human needs to make a better economy. To fulfill the better economy and life, humans aren’t satisfied. Every single days, there will be a new need from every single human. On that reason, industries grow wild and keep rising every year. Doing their activities, industries occur any kind of emission included the carbon dioxide gas emission, so the increment of carbon dioxide gas emission increases annually.

In developed countries, they have a bold step to mitigate their emission of CO2 gas by using Carbon Capture and Storage (CCS) technology. A post-graduate student from Universitas Indonesia sees the gap in Indonesia. The study and information about CCS, as a new technology to reduce emission, haven’t well developed in Indonesia. Based on the situation, the student tries to do a research of CCS technology implementation in Indonesia using technology assessment method. He spent six months in doing the research in Indonesia.

The objective of the research is to find the criterias and subcriterias for the implementation of carbon capture technology with an adjustment of Indonesia’s condition. Because there is no enough information about the criteria in implementing carbon capture technology, this research could be the opening project for the further research in Indonesia. Through this study, we will seek what the subcriterias are needed to be fulfilled. It will be divided into two main criterias based on economy and environment, and the other supporting criterias are performance and technology innovation.

Data-data on the research used primary and secondary data,. Focus group discussion (FGD) and questionnaire are the main primary data, meanwhile, references from literatures are the secondary data. FGD and questionnaire involved some experts to give their perspectives on this research so the results will be various.

The results suggest the subcriterias that are important in using CCS technology are: the rate of capturing CO2 emission from its technology (for environment criteria) and investment cost of the technology (economy criteria).

The investment cost for the carbon capture technology is big enough, so the implementation itself needs support from the government and other investors. Although there are some challenges in implementing the carbon capture technology, the potential to implement the technology is opened. Indonesia has a big sources for the CO2 emission because there are still many industries using fossil fuel. If the technology applied, it could be a benefit for Indonesia in supporting the sustainable development aligned with the statement (of the government) on reducing CO2 emsision.

This research still needs to be improved, but the results as opening project are promising. Hopefully, there will be other futher  research developed on this field.

This research is conducted by Reinaldo Giovanni and Akhmad Hidayatno

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SEMS Research Highlights 2015: Enabling the Adoption of Alternative Fuel Vehicles – An Approach to Refueling Station Spatial Placements

Refueling station accessibility for more cleaner and greener energy is one of the most important factors in the adoption of alternative fuel vehicles.


Image Courtesy of Radar Pena

If the refueling station is not strategically located, people will be hesitant to adopt the new alternative fuel (such as gas, hydrogen or other type of alternative fuel).
Due to the importance of locations,  researcher in System Engineering, Modeling, and Simulation lab of Universitas Indonesia develop an operations research-based spatial-model to determine ideal refueling station locations. Early results has delivered a whopping gain up to 96% demand coverage, while at same time maintained profitability in each individual location.

The model was develop in three stages: demand mapping, spatial simulation and financial screening.

First stage is determining how many refueling stations are needed to cover potential demand within the scope. This is done through a series of calculations: total vehicles converted are multiplied by each vehicle’s fuel demand, subtracted by the amount of existing alternative fuel supply (if some refueling stations already exist), and then divided by an individual station’s capacity. Through these calculations, a number of stations needed to be built can be obtained.

In the second stage, multiple variables are used as input to reflect real-world conditions in a geographic information system-based spatial model. These variables include spatial data, such as the locations of distributed potential demand, already-existing alternative refueling stations, and candidate locations to build the new refueling stations, as well as non-spatial data, like the daily capacity of each refueling station and the maximum distance car owners are willing to travel to reach a station. The model then uses a location-allocation technique—the ‘maximize capacitated coverage’ approach—to determine the ideal locations for every refueling stations. These locations cover the most demand possible while subjecting to the capacity of individual stations.

The final stage is financial screening of the chosen locations. Three economic metrics are used to determine profitability: the NPV, IRR, and payback period. The demand in each location chosen, obtained through the spatial model, is entered into a simple financial model of a refueling station’s operations to reveal the three economic metrics. Afterwards, a final analysis is conducted to determine other alternatives to reach demand points not yet covered, or to replace unprofitable locations.

In this study, the researchers focused on the adoption of natural gas vehicles by public transportation fleets in DKI Jakarta, as the case study. There were four scenarios used, based primarily on the types of candidate locations (to simulate ease of implementation) and the simulated traffic conditions. The resulting locations show a range of 79-96% coverage, with the lower numbers found in traffic jam scenarios. To boost coverage and replace unprofitable locations, there were 2 possible alternatives: constructing stand-alone refueling stations (not constrained by candidate locations) and deploying mobile refueling units (MRUs).

This work has implications for various types of alternative fuel vehicles, not just limited to natural gas. Refueling stations are capital-heavy infrastructures regardless of fuel type, especially for new, still growing vehicle types. The approach used is replicate-able and adjustable for other situations to improve the adoption process.

This research was conducted by Aziiz Sutrisno, Akhmad Hidayatno, Dio Aufa Handoyo, Eka Nugraha Putra

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SEMS Research Highlights 2015: A New Strategy Development Model to Support FLNG Implementation in Indonesia

Floating Liquefied Natural Gas (FLNG), a relatively new technology in LNG industry, appears as billion dollars attraction to uncover the massive proportion of stranded natural gas reserves. Apparently, one-third of the gas reserves in the world are located in offshore, which in many cases considered to be stranded. As the growing interest to exploit and trade all available gas reserves along with the opportunity to build the offshore LNG facilities, the FLNG gives an ideal solution. FLNG is a natural gas liquefaction and storage system which is placed directly above the gas source using technology that is installed in a ship. The entire value chain of the FLNG will be shorter than the LNG supply chain in general, since it omits the transportation of natural gas via pipeline to onshore plants.


Prelude FLNG Source:

Despite its huge positive potential impacts offered, FLNG construction in Indonesia comprises number of risks and opportunities. One of major risks in the preparation to implement FLNG technology in Indonesia is how to meet the requirements of the local content percentage. In 2013, Indonesia’s Ministry of Energy enacted a regulation of minimum local content for equipment used in the energy industry. However, the current state of local industry capacity still requires significant new development in terms of technical, engineering, and security.

A coordinated effort between relevant actors to develop the industry of FLNG development, especially for the topside structure, is also in-line with the new focus of the Government on Maritime Sector Development. Therefore, a proper multi-actor roadmap is needed to address the complexity as well as ensuring that the overall strategies can be fully understood and well implemented by all relevant parties. This would allow the government to minimize the risk of delays in the implementation and achievement of the targets.

Technology Roadmapping is a method that has been used extensively to support the development of certain types of technology. Since this research took an industrial development for FLNG implementation as a focus of the study, the roadmap is considered appropriate because it has been widely used as a planning tool in some ministries in Indonesia. However, there is a saying that goes “planning without action is futile, action without planning is fatal”. We found that a roadmap is not enough to become a planning tool for the project in this type and scale.

We proposed the integration of Technology Roadmapping and Hoshin Kanri Strategic Deployment Management. Both methods have a similarity in the importance of interactions between stakeholders to support the development and deployment of strategies and policies. Hoshin kanri is incorporated in the roadmap making to provide a clear accountability arrangement and review of the strategies with the existence of clear documentation from planning to review stage.

The proposed integration model comprises four stages process including planning, visioning, strategy and roadmap development, as well as implementation and review. In the end, the planning process would produce two main outputs that become guides in the implementation of strategies. First, a roadmap that describe the strategic plan required at a certain time period. Second, an x-matrix that translates those strategies into tactics and detailed process to achieve each result or target.

This research has managed to find a novel approach to the development of the strategy, which is conducted by integrating the approach of Technology Roadmapping and Hoshin Kanri method and serves them as a strategic planning tool. We are integrating both methods to make a more detail strategy plan that includes strategy development, deployment to all parties, and a system of periodic reviews. To this extent, the research is believed could provide a novel implication by integrating the strengths of the two methods to provide the strategic framework for industrial development in the national sector.

This research is conducted by Akhmad Hidayatno, Aziiz Sutrisno, and Wulan Maulidiah

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Introductory SD Workshop on Modeling Fiscal Policy for Sustainable Development

SEMS in collaboration with PT Makara Mas (Holding Company of Universitas Indonesia) conducted an introductory system dynamics workshop on modeling sustainable development for Fiscal Policy Agency – Ministry of Finance, Government of Indonesia. The workshop was part of Low Carbon Support, provided by the United Kingdom (UK) for the Ministry of Finance, especially the Centre for Climate Change Financing and Multilateral Policy (PKPPIM) in the Fiscal Policy Agency. PKPPIM are tasked to recommend a low carbon fiscal policies especially starting from the national budget 2015. This is why they needed a more integrated modeling tool to be able to evaluate green fiscal policy impacts.

FPA has already a strong group of economic models that are based on IO Models, SAM, and CGE, however since the questions of green policy is multi-dimensions with multi-sectoral approach, they feel that they need to have a more adaptive model to answer these questions.

The workshop was conducted for 5 days in the 2nd week of February, ranging from the basics of systems thinking and system dynamics, group dynamics, simple model building and closed by discussion on future models development of a new “green fiscal policy” model.

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National Energy Council Workshop on SD

SEMS Laboratory is developing a model to evaluate the energy impact on land transportation strategy for the Dewan Energi Nasional (DEN – National Energy Council). The model is based on System Dynamics, therefore we kick off the model development by conducting an introductory one-day workshop on System Dynamics Modeling.

Our researcher, Aziiz Sutrisno, lead the workshop aims to give a foundation for the council’s expert to understand the SD “engine” of the model.

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