Analysis of CCS implementation in Indonesia’s coal fired power plants, economic optimization, and potential impact on Java-Bali grid for future decarbonization

Abstract

This study aims to evaluate impact of retrofitting carbon capture and storage (CCS) technology on coal fired power plants (CFPP) in Indonesia. Using a representative 3×330 MW CFPP, the integration of CCS increases the levelized cost of electricity (LCoE) to 124 USD/MWh. Key cost components include CO₂ capture (21.7%), energy penalty from steam extraction (18.5%), and CO₂ transport and injection (16.7%). Sensitivity analysis indicates that CCS becomes financially viable under a high carbon cap (0.9 tCO₂/MWh) and a carbon tax of 76 USD/tCO₂. Meanwhile, International carbon markets offer a potential revenue at 75 USD/tCO₂ can fully offset CCS costs. Additionally, CAPEX grants can reduce LCoE to 12.4%, serving to mitigate upfront investment for CCS deployment. Within the Java-Bali grid, CFPP account for 58.8% of the generation mix with 41% aged 10-20 years using predominantly subcritical technology while 28% are over 20 years old and follow natural retirement being replaced by renewable energy. CCS retrofitting is more economically and technically viable for mid aged plants with newer technologies and lower emission intensities, supporting grid stability with limited renewable base load availability. This strategy also serves as a transitional pathway toward long term renewable integration until the LCoE of PV+BESS falls below 50 USD/MWh.