Growing Domestic Power Demand Could Cut Coal Exports from Indonesia

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Researched by Industrial Info Resources (Sugar Land, Texas)--Indonesia currently has about 5 billion tons of recoverable coal reserves, and it has become one of the world's largest thermal coal providers. It supplies coal to Southeast Asia and India, as well as to other major energy consumers. The country exports more than it consumes, which makes it difficult to secure feedstock for its thermal power plants. Recently, the government of Indonesia has considered plans to ban the export of coal that fails to meet a certain caloric criteria.

The ban, which may be implemented starting in 2014, will prevent the export of coal with a caloric value below 5,600 kilocalories. Coal at about this threshold, considered to be prime thermal coal, will clear export limitations. Lower grades of coal make up a significant portion of Indonesia's coal exports, and could be used domestically. Indonesia provides roughly 30% of the world's thermal coal, and a drop in exports could decrease global supplies up to 10%, or more in some cases.

According to Industrial Info's Power Database, Indonesia currently has 35 coal-fired power projects scheduled to be brought online between now and the end of the decade, representing more than 17 gigawatts (GW) and $20 billion in investments. Indonesia currently has more than 25 GW of installed electrical capacity, but coverage is sparse on the ground and mostly limited to metropolitan areas. The government is hoping to boost coverage between now and 2020, and the significant boost in coal-fired power stations will require most domestically mined coal.

Of the 35 to be brought online over the next 10 years, six of these are at least 1 GW or more. The first of these to see completion will be a 1,320-megawatt (MW) expansion at a site owned and operated by PT Perusahaan Listrik Negara Persero (Jakarta) near Jepara, which is scheduled for commissioning in early 2012. PT Perusahaan is also constructing a large coal-fired plant near Kendal, set for completion in late 2014. The $3.27 billion plant will generate 2,000 MW upon completion.

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