Indonesian state-owned electricity firm Perusahaan Listrik Negara (PLN) said that Indonesia – Southeast Asia’s largest economy – is expected to nearly double domestic consumption of thermal coal over the next eight years in an attempt to meet the nation’s growing electricity demand. Moreover, coal, of which the country has huge reserves at its disposal, is regarded a better fuel source in electricity generation compared to expensive diesel. At present, many power stations in Indonesia are still diesel-powered.
Coal is targeted to form the fuel source for 66 percent of total electricity generation by 2022 from 52 percent currently. As a consequence domestic coal consumption in Indonesia is expected to rise to 151 million metric tons in 2022 from 82.9 million metric tons in 2014.
Indonesian demand for electricity grows by approximately 8.4 percent per year, which is higher than the annual growth of electricity generation, thus resulting in frequent blackouts or a total lack of electricity (in the more remote areas). Even a big city such as Medan (North Sumatra) still experiences about three blackouts per week on average. About 20 percent of the total Indonesian population (250 million people) had no access to the country’s electricity grid in 2013.
PLN believes that the nation’s electricity demand will rise to 207 terawatt-hours (TWh) in 2014 from 189 TWh in 2013. By 2022, the figure will rise to 386 TWh (nearly doubling from the current figure). However, prospects in the coal mining sector are still rather gloomy, evidenced by lower coal prices on the international market. Amid increased worldwide supply and weaker demand, coal prices have shown a declining trend between 2011 and 2014.