Indonesia could run out of coal reserves by 2033, a study by PriceWaterhouseCoopers (PwC) released on Monday has revealed.
Though Southeast Asia’s largest economy is one of the world’s top exporters of thermal coal, the report found that its output has been declining significantly over the past few years. Plummeting prices of power station fuel have forced miners to cut costs, thereby reducing exploration and stripping ratios.
As a result, even though government data suggests that Indonesia had around 32.3 billion tons of coal reserves in 2014, Mizra Diran, PwC’s Indonesian advisory chief, said according to Reuters that coal reserves have dropped by 30 to 40 percent, with the survey finding coal reserves of between 7.3 billion and 8.3 billion tons.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
If this trend continues, in spite of Indonesian government’s ambitious goal to build 35 gigawatts of power stations by 2019 – 20 gigawatts of which will be coal-fueled – there is a possibility that the nation’s coal reserves could be depleted between 2033 and 2036.
“There is a possibility that national coal reserves … will not be enough to supply 20 gigawatts of power stations for 25-35 years,” Diran told reporters Monday.
Indonesia’s quest for new power plants under President Joko “Jokowi” Widodo, a majority of which will be coal-powered, had raised doubts about whether the country could meet its new commitment to cut greenhouse gas emissions growth by 29 percent by 2030. The goal has been met by several obstacles, including delays, land acquisition disputes, funding issues and licensing delays.
Coal currently accounts for about a third of total power generation in Indonesia, the second-largest energy source in the country after oil, which accounts for about 44 percent. The coal mining sector and related industries employ about one million people.
PwC’s new study is based on information from 25 coal mining companies representing around 80 percent of Indonesia’s output.