Coal to account for 67.8% of Indonesia's energy mix by 2022

It poses a problem on the government's renewables push.

Indonesia may struggle to achieve the 23% target of having its primary energy needs come from renewable energy by 2023, as the share of coal in power generation is set to increase to 67.8% in 2022 from 60% in 2018, Moody's Investor Service reported.

The share of renewables in the country’s energy mix is currently at 12%.

Moody's noted that there has been a lack of consistency in policy and regulatory framework, which has exacerbated the uncertainty associated with renewable energy projects.

Also read: Will Indonesia keep its unrelenting grip on coal?

The levelised cost of electricity (LCOE) for wind and solar as of June also ranged around $84-187/MWh and $76-194MWh respectively, compared to $56-94MWh in coal.

In addition, tariffs for renewable energy projects are fixed at 85% of the average tariff of power in each province. The country also requires the use of local components in these projects.

The slow adoption of renewable energy has also been attributed to the threat of stranded coal and oil-based generating projects of Perusahaan Listrik Negara, the largest generator and only off-taker for independent power projects in the country.

Power purchase agreements have also protected the two rated pure-play coal-based power projects, LLPL Capital and Minejesa Capital BV, from any changes to legal and environmental pollution standards

However, some banks and financial institution has actively kept from incrementally lending to coal projects.

Indonesia has plans to add 50.4GW of new power generation capacity over the next decade, taking its installed capacity to 108GW.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia