Domestic coal consumption this year is projected to increase to 166 million tons, from 133 million tons last year, the Ministry of Energy and Mineral Resources has said. A contacted source from national shipping company said, this gives a higher market potency for domestic coal carriers.
At least 166 million tons of coal will be mostly used for electrical power plants, the ministry’s Secretary General Ego Syahrial informed.
“The coal produced will mostly be converted to electric power. It will also be used in industries and households,” Ego Syahrial said at the Indonesia Economic Outlook 2022 on Wednesday as Antara quoted.
Meanwhile, the Indonesian government will encourage coal down streaming as the country’s coal potential is considerable, he added.
One of the projects for coal down streaming involves the development of dimethyl ether as a replacement for liquefied petroleum gas (LPG), he noted.
Moreover, the government has drawn up a plan to decommission coal-fired power plants, owned by state electricity firm PLN and non-PLN plants, based on the 30-year-maximum contract, he said.
Coal-fired power plants will be replaced by new renewable power plants. This plan aims to achieve Indonesia’s goal of achieving carbon neutrality by 2060, he explained.
“With the 35-thousand MW program, the capacity of the coal-fired power plants will increase until 2026, but it will start to decrease by 2031,” Syahrial said.
Raising the capacity of coal-fired power plants is aimed at increasing electricity access for the community, encouraging economic growth, and meeting the needs of energy and electricity-based transportation, he expounded.
By 2021, the realization of power plants’ capacity reached 74 GW, while the government is targeting to boost installed capacity to 76 GW in 2022, he said.
“Power plants are still dominated by the use of fossils that can produce carbon emissions, while the use of new renewable power plants is still relatively small,” Syahrial added.
“This is a very good news for us (domestic coal carriers). This will give us a higher market opportunity,” a source from a national shipping line told Indonesia Shipping Gazette.