The government prohibits coal export activities from January 1-31 to meet the needs of PT PLN (Persero) which is currently experiencing a supply deficit. If the shortage of coal supply continues, the government estimates that more than 10 million customers in Java, Madura, Bali (Jamali) and non-Jamali will experience power outages.
The Director General of Mineral and Coal of the Ministry of Energy and Mineral Resources (ESDM) Ridwan Jamaludin, Saturday (1/1), emphasized that the ban was only temporary. And the government will evaluate the policy after January 5, 2022.
“If the export ban is not enforced, nearly 20 Steam Power Plants (PLTU) with a power of around 10,850 mega watts (MW) will be extinguished. This has the potential to disrupt the stability of the national economy,” said Ridwan, as quoted from the Ministry of Energy and Mineral Resources website.
When the supply of coal for power plants has been met, he said, export activities will return to normal.
He further said that the government had several times reminded coal entrepreneurs to continue to fulfill their commitments in supplying PLN’s needs. However, in reality, the supply of coal for PLN every month is always below the percentage obligation of coal sales for domestic needs (Domestic Market Obligation/DMO). As a result, at the end of the year PLN’s power plants experienced a coal supply deficit. According to him, the safe supply of coal at PLTU PLN is above 20 days of operation.
“From the 5.1 million metric tons (MT) assigned by the government, until January 1, 2022, only 35,000 MT or less than 1 percent has been fulfilled. This amount cannot meet the needs of each existing PLTU. If strategic steps are not taken immediately , there will be widespread blackouts,” said Ridwan.
The government has issued the Decree of the Minister of Energy and Mineral Resources Number 139.K/HK.02/MEM.B/2021 which regulates the obligation to fulfill coal for domestic needs. Coal producers must allocate their coal production at least 25 percent of the approved production plan. In addition, it was also determined that the selling price of coal for the provision of electricity for the public interest is $70/MT.
Meanwhile, in a written statement on Saturday (1/1), the Indonesian Coal Mining Association (APBI) regretted the decision. The association believes that the temporary suspension of coal exports will have a negative impact, including disrupting the national production level of 38-40 MT. As a result, the government has the potential to lose foreign exchange from coal exports of around $3 billion per month. [ah]