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Coal News Coal Markets, Indonesia

Coal inventory high at Indonesian power plants

Coal stocks at Indonesian state-controlled utility PLN’s operated power plants could last for more than three weeks, a level that surpasses the minimum inventory level guidance set by the country’s energy ministry (ESDM).

The average stock levels for power plants in the Java, Madura and Bali grids were at 27.3 days of operation as of 26 December, while the average inventory in the Sumatra-Kalimantan area was at 26.3 days of operation, according to PLN Energi Primer Indonesia (PLN EPI), a PLN unit responsible for ensuring adequate coal supplies to PLN-owned power plants. The Sulawesi-Maluku-Papua-Nusa Tenggara region has coal stocks that could last for 33.8 days, PLN EPI said, adding that PLN’s inventory would be equivalent to more than 21 days of use on average.

This is more than the minimum 20-day coal inventory guideline the ESDM has stipulated.

The ministry has classified inventory that could last for only 15 days or less as critical level. Inventory levels at these power plants had slipped much below the critical level around the same time in 2021, which had prompted Jakarta to temporarily ban coal exports at the start of 2022.

Coal availability at PLN-operated power plants has increased steadily since the ban, which was enforced to make domestic coal producers ensure stable coal supplies to local generators. The regulation also required coal producers to submit their domestic market obligation (DMO) quota compliance report within 10 days of the end of every month, a move that allowed for stricter monitoring of deliveries. Non-compliance with the DMO invited stricter penalties, which included fines, export bans, temporary suspension of mining activities, and even revocation of mining permits.

Coal consumption

Coal use in the power sector is expected to reach 161mn t this year, PLN EPI said.

State-owned coal-fired power plants are projected to consume roughly 82.9mn t of coal, while independent power producers are likely to burn around 78.2mn t of coal, PLN EPI added. Comparative figures for 2022 were not immediately available.

The power sector’s coal consumption is likely to increase further next year to cater to higher demand from residential and industrial consumers, PLN EPI said, but did not provide further details.