The photo is sourced from dan_prat/E+ via Getty Images
The share of power-generating coal in Indonesia’s solid fuel exports exceeds 95%, which is why the dynamics of coal-fired power generation are key to its export supplies. According to the International Energy Agency (IEA), coal-fired power generation worldwide rose by 1.6% in 2023, reaching 10,613 terawatt-hours (TWh), which is also an all-time high. In the countries of the Asia-Pacific region, the main destination for coal exporters, the increase in coal-fired power generation reached 2.5% (from 8,196 TWh to 8,675 TWh). It is no coincidence that the share of China and India made up 64% (324.1 million tons) of Indonesia’s coal exports in 2023.
China and India remain the world leaders in terms of the pace of coal-fired power generation infrastructure development. According to Global Energy Monitor, China accounted for 66% of the new coal-fired TPPs brought into operation worldwide (17.0 GW out of 25.9 GW) in the first half of 2023, with India at 12% (3.1 GW). The increase in exports from Indonesia is driven not only by the geographical proximity of major markets but also by the comparative cheapness of local feedstock: for instance, the average price of shipping power-generating coal from the Indonesian port of Banjarmasin was $63.1 per ton in 2023, which was almost three times lower than shipping coal from the Australian port of Newcastle ($172.8 per ton), one of the largest coal hubs in the Asia-Pacific.
One of the reasons for this disparity is the quality of Indonesian feedstock, which is characterised by low calorie content and a relatively high moisture content. According to S&P Global Platts, the average calorific value of coal shipped at Banjarmasin is 3,800 kilocalories per kilogram (kcal per kg), whereas feedstock exported from Newcastle has the calorific value of 5,500 kcal per kg. The moisture content of Indonesian and Australian coal stands at 38% and 10%, respectively, which affects fuel efficiency at power plants.
However, this does not prevent Indonesia from being the world’s largest exporter of power-generating coal. A preliminary estimate by the IEA says that the country’s share in the global structure of coal exports was 44% in 2023, with Australia and Russia accounting for 18% and 15%, respectively.
