Indonesia has seen a sudden surge in coal exports in the first quarter of 2024, driven largely by soaring electricity demand in neighboring countries and Asia, which has been triggered by an intense heatwave. This demand spike prompted these nations to increase their use of air conditioning.
Gita Mahyarani, the Deputy Executive Director of the Indonesian Coal Mining Association (APBI), highlighted that during the initial quarter of 2024, countries like Vietnam, India, and China ramped up their coal imports from Indonesia as a response to the extreme weather conditions. She pointed out that Vietnam had upped its coal and electricity imports to avoid energy shortages similar to those it faced the previous year due to drought conditions impairing hydroelectric power plant operations.
Mahyarani also indicated growth expectations for Indonesian coal production in the second quarter of the year, attributing this optimism to relatively dryer weather. Recent figures suggest that Indonesia’s coal production by early May 2024 had hit 255.47 million tons, which constitutes about 25.6% of the yearly target, with coal sales reaching 241.21 million tons.
However, Irwandy Arif, the Special Staff to the Minister of Energy and Mineral Resources for Mineral and Coal Governance Acceleration, mentioned that they haven’t received specific data about coal demand from some Asian neighbors like the Philippines, Thailand, and India. Still, he noted that sudden changes in coal purchasing patterns are rare unless driven by exceptional circumstances.
Previously, S&P Global reported a forecast of rising coal prices supported by increasing demand in China and India post their Labor Day holidays. They noted that the power plants in India are likely to keep up foreign coal purchases due to anticipated spikes in temperature.
This current scenario where Asia, especially parts of ASEAN, is experiencing a heatwave, exemplifies a situation where coal becomes a crucial resource. The heatwave has significantly increased electricity consumption for air conditioning, pushing up coal demand, essential for power generation in many of these countries. In fact, power generation in countries like India, Vietnam, Myanmar, and the Philippines majorly depends on coal, with their reliance varying from 50% to about 75%.
