Coal use in Indonesia and the Philippines reaches record levels

Increased consumption of the pollutive fossil fuel comes despite high-profile commitments and international aid to scale back coal dependence. The latest data from energy think tank Ember reveals the struggle both countries face amid rising energy demand to fuel growing economies.

Suralaya Power Station
The Suralaya Power Station in Banten Province, Indonesia. Image: Recourse

Despite high-profile commitments to move away from coal amid international pressure to slash emissions, Indonesia and the Philippines became more dependent on the fossil fuel to power their fast-growing economies in 2023.

Coal use in Indonesia reached a new record high of 61.8 per cent of the power mix last year, while clean power generation fell by 0.3 per cent, according to new data from Ember, an energy think tank. As Southeast Asia’s largest economy, Indonesia has had to turn to the most pollutive type of fuel to meet rising demand for energy.

Two-thirds of Indonesia’s 5 per cent year-on-year electricity demand rise in 2023 was met by coal, one third by fossil gas and just 2 per cent by wind and solar. Hydropower’s contribution to electricity demand growth plunged by 10 per cent, while bioenergy’s contribution increased by 9 per cent.

The data used by Ember was sourced from Indonesia’s Ministry of Energy and Mineral Resources and includes captive coal plants used to fuel the country’s booming nickel industry.

The Philippines saw a 2.9 percentage point annual coal share increase last year, from 59.1 per cent of the power mix in 2022 to 61.9 per cent in 2023 – also a record. The archipelago is now Southeast Asia’s most coal-dependent country, marginally ahead of Indonesia.

Coal power generation in the Philippines rose by 9.7 per cent, much higher than the 4.6 per cent rise in electricity demand. Gas and other fossil fuel-based power generation dropped by 9.2 per cent and 18 per cent, respectively, while wind and solar generation increased by 31 per cent, meeting 17 per cent of the total increase in demand.

The Philippines and Indonesia now rank eighth and ninth, respectively, for coal dependence globally – ahead of China (which uses coal for 59 per cent of its electricity, and ranks 12th) but below India (76 per cent, 4th).

Change in electricity generation by source in the Philippines and Indonesia, 2022 to 2023

Change in electricity generation by source in the Philippines and Indonesia, 2022 to 2023, measured in terawatt hours (TWh). Surging demand for energy in both countries has been largely met by coal with renewables contributing negligibly to power demand growth. Source: Ember

The rest of Southeast Asia region also saw an increase in coal reliance – from 31 per cent in 2022 to 33 per cent in 2023, following two consecutive annual falls in coal dependence.

Coal dependency in Southeast Asia

Coal dependency in Southeast Asia averages at more than 40 per cent, compared to 59 per cent in China, 76 per cent in India, 16 per cent in Europe, 18 per cent in United States and 10 per cent in Latin America. Countries with asterisks are using data for 2022, the latest available data. Source: Yearly electricity data, Ember

Credible coal commitments? 

The data, published on Monday, jars with the Philippines’ and Indonesia’s commitments to wean their energy systems off coal, which is the single biggest contributor to man-made climate change.

The Philippines was the first country in Southeast Asia to set a moratorium on new coal, in 2020, and the country has pledged to retire up to 900 megawatts of existing coal-fired generation capacity by 2027. However, the country’s energy ministry expects to add 2.3 gigawatts of planned coal power projects by 2028. The majority of the Philippines’ coal plants are young, which makes early retirement of the facilities difficult because of high decommissioning costs.

The Philippines is the only country in Asean that does not have a net-zero target, although the country aims to cut emissions by two-thirds by 2030 and increase the share of renewables in the power mix to 35 per cent by 2030 and 50 per cent by 2040.

Indonesia has committed to achieve net zero emissions by 2060, a target that senior ministers have said could be reached earlier if the country receives international financial and technological aid. The country is set to receive US$20 billion from rich countries to retire coal plants early and scale up renewables, although the Just Energy Transition Partnership (JETP) deal has been troubled by disagreement over the financing terms.

Indonesia and the Philippines have seen tepid growth in renewable electricity generation and lag other Asean countries for wind and solar deployment.

According to Ember’s data, growth in wind and solar in Indonesia has increased by only 1.2 terawatt-hours (TWh) since the 2015 Paris Agreement and accounted for only 4 per cent of total renewables growth.

In the Philippines, wind and solar increased from less than 1 TWh in 2015 to 3.7 TWh in 2023. This represented 61 per cent of the total increase in renewables over the same period, with limited growth in other types of renewables such as biomass and hydropower.

Compared to a regional average of 4.4 per cent for solar and wind’s share of the electricity mix, the Philippines (3.2 per cent) is ahead of Indonesia, which is the regional renewables laggard with just 0.3 per cent share, even though Indonesia invested more in renewables than any country in Asean in 2023

Indonesia recently abandoned a national target for renewables, scaling back its original goal of 23 per cent of the energy mix by 2025 and 26 per cent by 2030, to 17 to 19 per cent by 2025, and 19 to 21 per cent in 2030. Experts have cited fossil fuel subsidies among barriers to renewables adoption in the country, while policymakers have said that Indonesia cannot afford to quit coal without overseas funding. 

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