Despite major global economies moving away from coal to curb carbon emissions, coal is set to maintain its dominance in Indonesia’s power mix during 2021-30, as a decisive renewable energy policy remains absent.
GlobalData’s latest report reveals that thermal power capacity in Southeast Asia’s largest economy is expected to jump from 59.38 GW (85.6% share of total power mix) to 92.53 GW in 2030. “During 2021-2030, thermal power generation will be dominated by coal-based electricity generation,” said the data and analytics company.
The expansion of renewable power in Indonesia has been relatively small compared to neighboring Southeast Asian countries. In 2000, renewable power capacity in Indonesia stood at 1.3 GW, which increased to 4.3 GW in 2020. Renewable power capacity is expected to expand at a CAGR of 12.5% to hit 14.9 GW in 2030, reckons GlobalData.
“Indonesia is expected to produce 62.2 TWh of its electricity from renewable sources in 2030, which will only be around 13% of the total power generation in the country,” reported the company.
“Indonesia has a significant potential for renewable power development. However, compared to other Asia Pacific countries, Indonesia lags in renewable energy development. One of the prominent factors is the absence of decisive renewable energy policy and over-regulation with respect to foreign investment,” said Pavan Vyakaranam, practice head at GlobalData
“In the last two years, Indonesia announced plans to transition away from coal power. The energy ministry even announced that they are considering shutting down aging coal power plants to replace with renewable power plants. However, with no nuclear power capacity and minimal hydropower capacity, a rapid transitioning from dominant thermal power to renewable power threaten the energy security of the country,” added Vyakaranam.