Indonesia and the Philippines coal dependency surges past China and Poland

Indonesia and the Philippines are leading the surge in coal dependency in Southeast Asia, with their reliance on coal continuing to grow rapidly in 2023. They outranked Poland and China in terms of coal dependency, whose coal share of generation has historically been one of the highest in the world.

In Indonesia, the share of electricity generated from coal increased marginally to a new record high of 61.8%. This resulted in Indonesia surpassing Poland in terms of share of coal in power generation in 2023, having surpassed China in 2022.

The Philippines’ coal share in generation overtook that of Poland, China and Indonesia in 2023. The country saw a sharp 2.9 percentage point annual coal share increase, from 59.1% in 2022 to 61.9% in 2023.

The rest of the ASEAN region also saw an increase of its coal reliance of 2 percentage points from 31% in 2022 to 33% in 2023. However, this was a rebound following two consecutive annual falls and the coal share of generation was still 3.1 percentage points below 2020 levels.

Slow growth in renewable electricity meant that Indonesia and the Philippines met their electricity demand growth primarily with coal.

Two-thirds (67%) of Indonesia’s electricity demand rise in 2023 was met with coal. Demand rose by 17.1 TWh (+5.1%) in 2023 compared to 2022, at the same time coal power rose by 11.5 TWh (+5.6%). The remaining third of the demand rise was met with mostly gas (31%). Solar and wind contributed a mere 2.3% in meeting the demand rise, while hydro generation had fallen by -10% in comparison to 2022. The fall in hydro was offset by a 9-percent rise in bioenergy generation. Since Indonesia began its first wind and solar generation in 2013, their growth has been sluggish. In 2023, wind and solar generation reached 1.2 TWh, adding 0.4 TWh of clean power to the grid.  Overall, clean power generation fell by 0.3% in 2023.

In 2023, Indonesia became the fifth largest coal power generator in the world, overtaking South Korea for the first time. Among the world’s top ten coal markets, Indonesia has seen the fastest rise, climbing from eleventh place in 2015 to fifth place in just 8 years. This ascent included surpassing Australia in 2018, Germany in 2019, Russia in 2020 and South Africa in 2022.

Indonesia’s rise in the global rankings over the last six years was driven by a 74% surge in coal generation, from 125 TWh in 2015 to 217 TWh in 2023. This represents an annual compounded growth rate of 7.1% per year.

Indonesia and the Philippines have seen limited growth in their renewable electricity generation, as their wind and solar potential remains almost entirely untapped.

In Indonesia, wind and solar increased by only 1.2 TWh since the 2015 Paris Agreement and accounted for only 4% of total renewables growth. Bioenergy generation more than doubled over the same period, from 9.8 TWh in 2015 to 22 TWh in 2023. It accounted for 40% of total renewable electricity growth, with the rest coming from hydro (34%), and geothermal (22%).

In the Philippines, wind and solar increased from less than 1 TWh in 2015 to 3.7 TWh in 2023. With limited growth in other renewables, this represented 61% of the total increase in renewables over the same period.

Both Indonesia and the Philippines lag behind other countries in the ASEAN region in their wind and solar deployment. In the rest of the region, wind and solar increased by 46 TWh, from 3 TWh in 2015 to 50 TWh in 2023. This was primarily driven by growth in Viet Nam (+35 TWh).

Indonesia and the Philippines also have lower wind and solar share in their electricity mix than most other countries in the ASEAN region. The Philippines (3.2%) is ahead of Indonesia (0.3%), but still behind the regional average of 4.4% or the leader, Viet Nam, with 13%.