Indonesia’s Energy and Mineral Resources Ministry has approved additional coal production quotas reserved exclusively for state utility PT PLN (Persero), aiming to close a supply gap behind weeks of rolling blackouts across Java and Bali. The move adds an expected 1.8 million tons of coal in July and 3 million tons monthly from August through December, while PLN modifies power plants to run on lower-grade fuel.
Key Facts At A Glance
- Announcement made July 10, 2026, by Director General of Mineral and Coal Tri Winarno at the Energy and Mineral Resources Ministry (ESDM) in Jakarta
- Additional coal allocation reserved exclusively for PLN, not the wider mining sector
- PLN expects 1.8 million metric tons of extra coal in July 2026
- A further 3 million metric tons per month allocated for August through December 2026
- PLN’s total 2026 coal requirement stands at roughly 154 million tons, against which the utility had secured contracts for about 141 million tons as of late June, leaving a shortfall of roughly 13 million tons
- Suralaya units 6 and 7 have been modified to run on coal with a calorific value of 4,100 to 4,300 kilocalories per kilogram, down from an original requirement of 4,600 to 4,800 kcal/kg
- A follow-up ESDM announcement on July 11 set the broader 2026 Domestic Market Obligation at 212 million tons, with 154 million tons ring-fenced for PLN’s coal-fired fleet
Indonesia’s government has moved to secure additional coal supply for state utility PT PLN (Persero) after weeks of rolling blackouts across Java exposed a persistent gap between the mid-calorific coal PLN’s power plants require and what domestic producers have been willing to deliver under existing price rules. Director General of Mineral and Coal Tri Winarno told reporters in Jakarta on July 10 that the additional production quota applies solely to PLN, and that the ministry is trying to balance domestic power plant needs against the risk of oversupplying export markets.
PLN President Director Darmawan Prasodjo said the utility expects 1.8 million metric tons of extra coal to arrive in July, followed by 3 million metric tons a month between August and December. The shortfall stems from a structural mismatch: PLN’s annual requirement of about 154 million tons of coal had only 141 million tons under signed contract as of late June, a roughly 13-million-ton gap concentrated in medium-calorific coal used to blend fuel at Java’s power stations.
Alongside the new allocation, PLN is retrofitting generating units to reduce dependence on higher-grade coal. Darmawan cited upgrades at the Suralaya 6 and 7 units, which can now operate on coal rated at 4,100 to 4,300 kcal/kg, down from an original specification of 4,600 to 4,800 kcal/kg.
The supply gap has been linked to Indonesia’s Domestic Market Obligation framework, which caps the price PLN pays for benchmark-grade coal at levels well below prevailing export prices, giving producers a financial incentive to prioritize overseas shipments over domestic mid-grade deliveries. Indonesia also cut its overall 2026 coal production quota to roughly 600 million tons from 817 million tons in 2025, tightening headroom across the system even as PLN’s specific requirements grew more acute.
A day after the July 10 announcement, the ministry disclosed that it had set the total 2026 Domestic Market Obligation at 212 million tons, with 154 million tons specifically earmarked for PLN’s coal-fired fleet, and said it was pressing PLN’s primary fuel-procurement arm to accelerate outstanding contracts. The government has already secured an emergency coal shipment that restored an estimated 5 gigawatts of reserve capacity to the Java-Bali grid, effectively ending the rolling blackouts that had affected the region in recent weeks.