Long-term Planning of the Fuel System in Indonesia using Optimization

Abstract

Abstract Biofuel has been considered as an option to substitute petroleum fuels and reduce dependence of fossil fuel importation and greenhouse gasess emissions. Current Indonesia’s biofuel blending mandates are cannot achieved due to technical, price and financial aspects. The objectives of the study are to obtain the optimum fuel supply mix by considering the fuel quality standard, production capacity and resource availability. Long-term fuel system optimization by minimum total system cost up to 2050 is carried out using TIMES-VEDA. The results showed that if goverment does not upgrade the quality of diesel up to EURO 4 and adapted EURO fuel specification with adjustment, the optimal fuel supply mix are FAME 50%-Diesel 50% in 2020-2030 and mix of FAME 47%-HVOSMR 53% in 2035-2050. For adapted EURO specification with adjustment except the sulphur content has fuel supply mix of HVOSMR 30%-Diesel 70% in 2020, FAME 20%-Diesel 80% for 2025-2030 and FAME 47%-HVOSMR 53% for 2035-2050. For gasoline, the optimum supply mix is Ethanol 5%-Gasoline 95% in 2020 and Ethanol-Ethanol2G 20%-Gasoline 80% in the 2025-2050. The utilization of biofuels can reduce the diesel and gasoline consumption for about 67-79% and 19% and reduce carbon intensity by 65-78% and 27%, respectively.