By 2025, a total of 11.2 GW of captive coal-fired TPPs and 38.5 GW of publicly accessible ones were operating in Indonesia. The Indonesian government treats captive plants differently when it comes to regulation: these TPPs are not required to disclose their power generation data or participate in the country’s carbon trading program, which has been implemented since 2023. However, captive TPPs cannot buy coal at government-subsidized prices, and their operators will have to shut them down no later than 2050. Moreover, from 2022 onward all companies initiating the construction of new captive TPPs must commit to reducing emissions by 35% during the first ten years of operation.
Due to the need to purchase coal at market prices, electricity from captive TPPs is more expensive than that from publicly available ones: the standardized cost of power generation is $0.077 per kWh for captive TPPs and $0.057 per kWh for others (as estimated by Ember). However, demand growth is still pushing businesses to build their own generating facilities: according to the power industry development plan, Indonesia’s power consumption will grow by an average of 3.8% per year in the coming decades. Therefore, according to Ember’s estimates, the peak of coal-fired power generation is unlikely to occur before 2037: by this time, its volume will exceed the current level by more than 60%, reaching 494 TWh per year, which is comparable to annual electricity consumption in France or Germany.
As a result, demand for power-generating coal will rise by more than 60%, going from 183 million tons in 2024 to 298 million tons in 2037. However, since the production of power-generating coal in Indonesia reached almost 800 million tons in 2024, the domestic market will still remain in surplus. The high availability of feedstock largely explains why coal demand in Indonesia’s power industry will continue to grow for at least a decade.
