Exploring carbon scheme scenarios for retrofitted coal-fired power plants with carbon capture system in Indonesia

The Indonesian electrical sector, primarily dependent on coal-fired power plants (CFPPs), has contributed approximately 50% of emission growth in the last two decades. Consequently, the CFPPs, which account for roughly 85% of total CO 2 emissions from electricity generation, have become a vital element for decarbonization to meet the Enhanced Nationally Determined Contribution (ENDC) objective. The present study examines the economics of CCS (Carbon Capture System) projects in CFPPs through retrofitting with an amine-based carbon capture system and explores financial scenarios of carbon scheme that promote the adoption of CCS in Indonesian CFPPs. Retrofitting the Suralaya power plant in Cilegon, Indonesia, with amine-based carbon capture was used as a case study. Economic analysis examining Net Present Value (NPV), Levelized Cost of Electricity (LCoE), and Levelized Cost of Carbon (LCoC) was performed. Financial scheme scenarios with various carbon taxes and carbon pricing were examined and contrasted with current practices in other countries. Findings indicate that retrofitting CFPP with amine-based carbon capture system corresponding to LCoC of USD 51.83/tCO 2 is not economically attractive unless a carbon tax of more than USD 138/tCO 2 is imposed. However, with a carbon tax exceeding USD 9/tCO 2 , retrofitting appears more economically beneficial than paying the carbon tax. Due to the high carbon tax required, the carbon tax can be combined with carbon trading mechanisms. When the market carbon price aligns with that of the EU ETS (Emission Trading System), the necessary carbon tax for making retrofitting commercially viable is a minimum of USD 55/tCO 2 . The findings further demonstrate that the carbon tax of USD 63/tCO 2 may result in a shift from coal-based power generation to solar PV power generation.