Govt says coal supply constraints for power plants resolved

Indonesia has resolved constraints in the supply of medium-rank coal used by coal-fired power plants, Energy and Mineral Resources Minister Bahlil Lahadalia said, easing concerns over fuel availability for the country's electricity system.

"Now all coal is in progress, no more problems," Bahlil told reporters on Thursday after inaugurating PT Sumber Aneka Gas' mini LNG plant in Tuban, East Java.

The minister was referring to supplies of medium-rank coal with an energy content of around 5,200 kilocalories per kilogram (GAR), the grade required by state utility PT Perusahaan Listrik Negara (PLN) for many of its coal-fired power plants.

Supply constraints had previously disrupted electricity services in several regions, prompting the government to step up coordination with coal miners, traders and PLN to secure deliveries.

Bahlil said the government had established a special task force to oversee coal procurement for PLN and prevent future supply disruptions that could threaten the country's energy security and power system reliability.

He added that PLN had faced similar coal supply problems during the 2022 energy crisis, highlighting the need for stronger oversight and closer coordination across the supply chain.

Bahlil also said the government was considering revising the coal price paid by PLN under Indonesia's Domestic Market Obligation (DMO) policy, citing rising production costs and ongoing challenges in maintaining supplies of medium-calorie coal.

Under the DMO policy, coal sold to PLN is currently subject to a price cap of $70 per metric ton, well below international prices, to help keep electricity tariffs affordable.

PLN President Director Darmawan Prasodjo said on Monday that supplies and distribution of coal meeting the utility's specifications had been running smoothly in recent weeks across the Java and Sumatra power systems.

"The supply of primary energy coal meeting the specifications required by power plants is running smoothly," Darmawan said.

He said improving coal logistics had supported efforts to strengthen the reliability of the Java electricity system and that PLN would continue improving coal supply chain governance and power plant operations to enhance the resilience of the national electricity grid.

Editing by Reiner Simanjuntak