T

he government plans to tighten its coal export policy starting in 2019 to preserve supplies for domestic power generation amid the ever-growing demand for coal in Southeast Asia.

Due to a lack of new coal discoveries, the government is looking to limit coal production to 400 million tons a year in 2019 from 419 million tons last year.

As of last year, Indonesia, he world’s top thermal coal exporter, had coal resources amounting to 128.06 billion tons and coal reserves of 28.46 billion tons, located mostly in Kalimantan and Sumatra.

Sri Raharjo, the Energy and Mineral Resources Ministry’s coal and mineral program supervision director, said on Wednesday that the resources and reserves were actually enough to meet the national demand for the next 70 to 80 years.

However, as there has been no new discovery lately, the government has decided to prioritize them for domestic use.

It expects domestic consumption to soar to 240 million tons a year in 2019 from only 111 million tons last year, in line with the ongoing development of various coal-fired power plants across the country.

The current administration has set an ambitious goal of generating an extra 35,000 megawatts (MW) of electricity, so that the national electrification ratio can rise to 97 percent by 2019, up from the current ratio of 88.3 percent.

Coal-fired power plants will play a major role by contributing more than half the total expected capacity. “Coal is our leading national energy source and its utilization has social and environmental impacts,” Alihuddin Sitompul, the ministry’s electricity program development director, said.

“That’s why we have to control its production, reduce exports, enhance its exploration, enhance its recovery, maintain supply and, most importantly, develop coal.”

According to the government’s forecast, coal consumption will reach 107.8 million tons in 2017, up 60.9 percent compared to five years before.

Of the 107.8 million tons, around 88.2 million tons are projected to be used for power plants, which are mostly operated by state-owned electricity firm PLN.

Even after the current administration’s term ends, coal will still occupy a significant position in the country’s energy sector.

The latest General Plan for National Energy (RUEN) shows that 30 percent of the national energy mix will come from coal by 2025 and 25 percent by 2050.

Meanwhile, the portion of renewable energy is expected to jump to 23 percent by 2025 and 31 percent by 2050, while the use of crude oil will plunge to 25 percent and 20 percent, respectively, during the same periods.

In 2014, coal accounted for 34 percent of the national energy mix, crude oil made up 43 percent, while renewable energy only stood at 4 percent.

“From these figures, the conclusion is we still rely on coal,” Sri said. “It means that sometime in the future, if domestic consumption grows to the same level as production at 400 million tons, there will be no exports.”

According to the Geneva-based International Trade Centre, Indonesia exported 310.67 million tons of coal and briquettes last year, down 5.4 percent annually.

India and China were the biggest buyers with imports amounting to 94.63 million tons and 50.84 million tons, respectively.