A thesis submitted in partial fulfillment of the requirements for the degree of Master of Science Sustainable Energy Transition

Thesis (M. Sc.) - Asian Institute of Technology, 2023

This study uses the TIMES model to assess Indonesia's power sector's carbon price impact from 2020 to 2050 anditheipriceineedediby 2030 to meet the Paris Accord NDC target. Four scenarios are used to model the impact of carbon price up to 2050: no carbon price, Indonesia's current price of USD 2.02/tCO2e, ICPF middle- and high-income countries, USD 50/tCO2e and USD 75/tCO2e. Four price scenarios{u2014}10, 25, 35, and 150 USD/tCO2e {u2014}are added to better understand the carbon price's effects. As carbon prices rise, installed capacity and power generation will shift to lower-carbon technology. Ultracritical coal, gas-fired, solar, geothermal, and hydropower plants will replace subcritical coal. Investment, fixed, and variable costs would exceed BaU with a higher carbon price. 2.02 to 25 USD/tCO2e may start the coal-to-gas transition without changing the generation profile. The generation will change significantly above 35 USD/tCO2e. Carbon emissions peak lower with rising carbon prices. Carbon prices below USD 25 are costly and ineffective. Indonesia ratified the Paris Accord NDC in 2016, pledging toicutiemissionsibyi29ipercentibyi2030ias well as 41 percent with internationalisupport.iEnergy sector emissions need to decrease by 11% for a 29 percent reduction and 14% for a 41 percent reduction. A 29% reduction requires USD 39.65/tCO2e carbon price, while a 41% reduction requires USD 43.78/tCO2e. These prices are still within the reasonable ICPF price limit for Indonesia to approach the middle-income country price floor.