State-owned electricity firm PLN has reported its challenges, particularly those related to the price and supply of coal, directly to President Joko “Jokowi” Widodo, hoping the government will help ease its financial burdens while maintaining electricity rates.
“We expect the government can lower the price of coal allocated for the domestic market obligation [DMO],” PLN president director Sofyan Basir said on Thursday after meeting with Jokowi at the Presidential Palace in Jakarta.
Sofyan claimed that Energy and Mineral Resources Minister Ignasius Jonan had promised to lower the DMO coal price by February.
“The President has thrown his support behind PLN to maintain electricity rates. But if the price of coal keeps increasing, it will be difficult for PLN [to maintain rates],” Sofyan said.
As of 2017, Indonesia operated various power plants with a total capacity of 60,491 megawatts, of which 57.22 percent were coal-fired facilities. Therefore, any increase in global coal prices will be a major blow for PLN.
Indonesia’s coal reference price climbed by 9.05 percent to US$94.04 per ton throughout 2017.
The Energy and Mineral Resources Ministry has limited the country’s coal production in 2018 at a maximum of 485 million tons, 25 percent of which will be allocated for the domestic market under the DMO.
“It will be troublesome for PLN if the country exports all of its coal,” Sofyan said.
PLN has previously projected that coal demand for electricity generation will soar by 18.4 percent year-on-year to 90 million tons in 2018. (bbn)