By Paul Homewood
h/t Dennis Ambler
Indonesia is set to nearly double its coal consumption:
Indonesia’s consumption of domestic coal for power generation will almost double from 84 million t in 2018 to 157 million t by 2027. This increases power generation’s share of domestic consumption from 18.5% to 33.6%, which is likely to displace export tonnage.
Another factor contributing to the higher coal consumption is that Indonesia’s new power plants are designed to consume lower energy coal. This means more coal will be required per unit of electricity generated.
This increase in domestic consumption combined with potential government efforts to conserve coal reserves represents a downside risk for Indonesian exports.
Indonesia’s electrification programme to drive domestic coal demand
Indonesia has been trying to accelerate electrification to meet the demands of its growing population and rapid industrialisation. Under the RUPTL, 58 greenfield coal-fired power plants are due to come online in the period to 2027, causing coal-fire capacity to more than double from 24 418 MW in 2018 to 51 800 MW in 2027. This will be the largest factor driving the increase in domestic coal consumption, causing coal consumption for power generation to grow at an 8.3% CAGR between now and 2027.
However, recent electricity demand growth has been below expectations. In 2017 state electricity company Perusahaan Listrik Negara (PLN) achieved sales growth of only 3.1% compared with its target of 8.3%. This prompted the government to lower its capacity forecast over the next 10 years by 22 GW in the RUPTL. As a result, some major power projects have been cancelled or delayed. However, coal’s cost competitiveness means that most of the delayed projects are gas-powered plants. The latest RUPTL shows that potential coal capacity has been reduced by 5 GW, whereas gas and renewables capacity have been reduced by 10 GW and 6.7 GW respectively.
Despite Indonesia’s push for more renewables and cleaner energy, Woo Mackenzie expects coal to still dominate the fuel mix at more than 60% from now until 2027. This is due to better coal economics and relatively unsupportive renewable energy policies.
https://www.worldcoal.com/power/22112018/coal-to-remain-king-in-indonesia-for-now/
Consumption of coal for power alone is forecast to be 157 million tonnes by 2027. To put this into perspective, total consumption of coal in Germany last year was 175 million tonnes.
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November 25, 2018 at 05:39AM
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