Indonesia expects to secure 65 million tons of coal for the domestic market this year, in part thanks to a planned regulation requiring that coal contractors must sell part of their coal production to the domestic market.
“We have asked all the coal contractors to report their planned production this year,” said Bambang Setiawan, the director general of mineral resources, coal, and geothermal at the ministry of energy and mineral resources, on Monday
“Calculations were then made as to the amount of coal they should sell to the local market and export to other countries.”
He noted, however, that as the regulation is still being drafted, the government is yet to have a standard by which to calculate the amount of coal that should be sold at the domestic market, and at what price.
While waiting for the regulation, the government at present conducts negotiations on the domestic obligation per company per contract.
“We’re doing a formula to calculate their obligations for local and foreign markets. Some of them have surpassed their limit to sell at the local market. So for certain companies we need to recalculate,” he said.
Based on data from the directorate general, Indonesia’s coal production this year will reach 250 million tons, of which some 185 million tons will be exported.
The government is in need of securing domestic coal supply as currently the country is facing declining production of oil, and a shortage of gas due to the fact that most of it is still under contract commitments for export, despite the rising demand from local industries.
Bambang pointed out that coal supply were also needed for the country’s first and second crash programs of electricity, which are each aimed at generating 10,000 MW.
While the first program is based exclusively on coal-fired power plants, the second program only needs coal to for around 40 percent of the total electricity capacity.
Geothermal is proposed to supply 48 percent of capacity and other energy resources 12 percent.
Indonesia’s energy resources are dominated by coal providing about 56 percent of power generation, while oil has fallen to around 15 percent, and gas contributes about 20 percent, and other sources 9%.
By the year 2025, the government expects to see the use of coal rise to over 60 percent of the energy mix.
Bambang noted that as its energy consumption increases by an average of 7 percent per year, Indonesia would see its coal demand increasing from 57 million tons in 2008, to 65 million tons in 2009, 84 million tons in 2010, 140 million tons in 2015, 172 million tons in 2020, and 210 million tons in 2025.
Total production of coal is expected to increase from 230 million tons in 2008 to 250 million tons in 2009, to 270 million tons in 2010, 321 million tons in 2015, 361 million tons in 2020, and 405 million tons in 2025.
Indonesia’s total proven reserves of coal are estimated at 18.71 billion tons, mostly in East Kalimantan, South Kalimantan, and Sumatra, while its potential reserves are estimated to reach up to 105 billion tons.
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