Up 60 Percent, Electricity Sector Consumption Of Coal 72.9 Million Tons As Of July 2022

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JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) ensures that it will continue to maintain domestic coal demand or Domestic Market Obligation (DMO). This can be illustrated by the realization of coal fulfillment for both electricity and non-electricity needs.

Minister of Energy and Mineral Resources Arifin Tasrif revealed that coal absorption experienced a significant increase for the needs of the two sectors from 2015 to 2021. "Coal consumption for electricity has increased by 60 percent, while non-electricity has increased by 52 percent," said Arifin in an official statement, Thursday 11 August.

Arifin explained that the planned contract volume for electricity in 2022 is 144.1 million tons with an allocation volume of 122.5 million tons. Until July 2022, the realization of the fulfillment of coal for electricity is 72.9 million tons.

Meanwhile, for non-electricity needs, the planned coal requirement is set at 69.9 million tons with the realization of fulfillment until July 2022 is 30.94 million tons.

In detail, the planned coal demand data from the Ministry of Energy and Mineral Resources in 2022 is 188.9 million tons. Meanwhile, for 2023 it will be 195.9 million tons, 2024 will be 209.9 million tons, and for 2025 it will be 197.9 million tons.

Until 2025, the electricity sector or PT Perusahaan Listrik Negara (PLN) is still the largest domestic coal user. With each demand in 2022 of 119 million tons, 2023 of 126 million tons, in 2024 of 140 million tons, and 2025 reaching 128 million tons.

To maintain domestic coal supply, the government has regulated the DMO obligations for PKPIUB and coal IUPK holders as follows. First, the policy is contained in Law No. 3/2020 which mandates a national policy of prioritizing mineral or coal for domestic purposes.

Then the second policy is listed in government regulation number 79/2014 on national energy policy which mandates the priority of coal as an energy source as a guarantee of coal supply for the country.

Furthermore, in PP number 23/2010 concerning the implementation of mineral and coal mining businesses that prioritize domestic coal needs, exports can be carried out after domestic needs are met.

There is also a Minister of Energy and Mineral Resources Regulation which mandates that IUP and IUPK holders must prioritize the fulfillment of domestic coal. Then, IUP and IUPK holders who violate will be subject to administrative sanctions.

In Kepmen 139/2021 which requires UIP IUPK and PKP2B to fulfill the DMO of 25 percent of the approved production plan and the provisions on the selling price of coal for general electricity of 70 dollars per tonne and the regulation of export ban sanctions, fines and the imposition of compensation funds.

In accordance with Kepmen 139/2021 and PP 13/2022 mining companies are required to meet the DMO of at least 25 percent of production for general electricity and non-general electricity, for companies that do not fulfill the DMO or domestic sales contracts are subject to the first provision of a ban on coal exports until the obligation Domestic DMO is met.

Except for those who do not have sales contracts with domestic coal users. "We will continue to find a way out so that DMO compliance can be fulfilled," said Arifin.