Indonesia's plans to cap coal exports to satisfy demand at home are unlikely to crimp global supplies for as long as five years, when new power plants will finally fire up domestic demand in the top thermal coal exporter.

Coal traders are growing increasingly worried over the prospect of Indonesia switching more coal to home use and away from exports, particularly given the rapid import demand growth from Asian giants China and India at the same time.

A government plan to cap coal exports at 150 million tonnes a year, which could kick off as soon as 2010, aims to supply new power stations coming on stream as part of a crash programme to boost generating capacity and ease power shortages.

But Adam Worthington, head of Asian utilities and coal at Macquarie Securities, said there was little risk the move would hurt exports soon, since Indonesian output is set to outstrip local demand for the next few years as miners increase capacity.

"Investment is being made at all of the major miners such that they are very easily able to meet exports and domestic demand," Worthington said.

For a graphic on coal output, exports and domestic demand, click: here

Indonesian coal production has increased by about 20 million tonnes a year over the last decade and that trend could continue until 2020, he added.

Coal output is forecast to reach 405 million tonnes by 2025, up 75 percent from an estimate of 230 million tonnes this year, data from Indonesia's energy ministry shows.

Delays in the crash programme to supply an additional 10,000 MegaWatts (MW) of power may also leave more room for exports.

Financing problems have forced the delay of the first phase of the programme, which will take up about 32 million tonnes of coal a year, to 2011 from 2010.

A second 10,000 MW government programme will also focus on coal, as well as renewables such as geothermal and hydro power.

"It will take about 5 to 6 years before local demand grows high enough that exports need to be capped at 150 million tonnes," said Singgih Widagdo, director of the Indonesian Coal Society, which groups traders and producers.

Indonesia's domestic coal demand may reach between 125 million and 130 million tonnes by 2016, Widagdo said.

The estimate is below a government forecast for domestic demand to hit 140 million tonnes by 2015, then reach 209 million tonnes by 2025 and outpace exports at 196 million tonnes.

Coal for power generation accounts for more than 60 percent of Indonesia's total coal consumption.

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