Indonesia Chooses Gas in Latest 10-Year Electricity Plan

Indonesia Chooses Gas in Latest 10-Year Electricity Plan

Indonesia has cut domestic coal consumption targets in its latest 10-year electricity development plans, to bring the power sector in line with the country’s carbon emissions goals laid out at the COP21 meeting in Paris last year. While expected, the cuts will disappoint the country’s coal miners eyeing a forecast domestic consumption boost to offset slower growth in China and tougher global competition. The country is largely turning to natural gas as a replacement as reported by Jakarta Globe.

Indonesia previously targeted increasing coal usage to about 64 percent of the energy mix by 2024 but now it aims for coal to contribute half of the energy mix by 2025, down from about 57 percent this year, under the plan released late last week by the energy ministry.

Natural gas targets climbed to 29.4 percent by 2025 from 19.2 percent previously.

“This is to increase the portion of new and renewable energy and gas,” energy ministry spokesman Sujatmiko told Reuters on Tuesday (21/06), noting that where renewable energy targets cannot be achieved, gas may be used instead.

Under the new 10-year plan, the world’s top exporter of thermal coal targets consumption at 148 million metric tons in 2025, roughly double from current levels but more than 20 million metric tons below the target of 171 million tonnes by 2024 set out in the previous 10-year power development plan.

The changes were made to comply with a draft of the country’s broader energy policy, whereby Indonesia targets for renewable energy to contribute at least 23 percent of the energy mix in 2025, with gas contributing about 24 percent and coal 50 percent.

Gas use is projected to increase sharply, with LNG demand growing nearly five-fold from a forecast 3.1 million metric tons this year to 17.6 million metric tons in 2025.

The latest power plan sees Indonesia producing 395 million tonnes of CO2 emissions in 2025, with 317 million tonnes from coal alone.

Confusion over the plans are among issues that have angered coal miners and project developers, and threaten to undermine Indonesia’s ability to attract finance for the $154 billion of projects now on the drawing board.