Indonesia, in its latest National Electricity Master Plan for the period 2024–2060 (RUKN), has outlined the expansion of coal power plant capacity and an increase in coal production. According to EMBER, if this plan is implemented, Indonesia’s climate goals could be jeopardized.
An increase in coal power plant capacity by 26.8 GW is planned over the next seven years, with industrial coal power plants (captive coal power plants) playing a key role in this expansion. Of the total mentioned capacity, 6.6 GW will be connected to the power grid, while more than 20 GW will be dedicated exclusively to supplying industrial facilities. The highest production growth is expected in 2037, with a projected increase of 62.7 percent compared to current levels.
However, renewable energy sources could play a larger role in supplying these closed systems, given that new coal power generation is becoming increasingly expensive and less competitive.
The total capacity of all coal power plants in Indonesia currently stands at 49.7 GW, of which 38.5 GW is connected to the power grid, while the rest consists of power plants that supply industries directly. The capacity of coal power plants has doubled over the past decade, leading to a surplus of electricity production. However, this surplus has resulted in financial burdens for Indonesia’s state-owned electricity company and has also slowed the development of renewable energy sources.
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Nevertheless, the realization of the planned 5.2 GW of industrial coal power plants remains uncertain, as it has not yet been fully decided which capacities will be built and where. This uncertainty provides an opportunity to reassess these plans and potentially integrate a greater share of renewable energy sources.
RUKN projects that electricity demand will grow at an annual rate of about 3.8 percent. From the current 482 TWh, demand is expected to rise to 1,813 TWh by 2060. This increase is driven by the growing use of electric vehicles, the development of new industries such as the green hydrogen industry, and others.
Despite expectations that renewable energy sources will dominate the energy mix by 2040, coal and natural gas production will continue to grow over the next decade. In fact, coal production is expected to grow at an annual rate of 3.9 percent, outpacing the 3.8 percent growth in electricity demand. Renewables are projected to reach a 41 percent share by 2040, a delay of several years compared to the target set by the 2014 National Energy Policy (KEN).
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