Academic Study Recommends Evaluation of Coal DMO and RKAB Policies

The Domestic Market Obligation (DMO) policy for coal and the Work Plan and Budget (RKAB) mechanism need to be evaluated as part of efforts to maintain the reliability of the national electricity system. This view was expressed by Padjadjaran University academic Prof Yayan Satyakti in a study titled ‘Overcoming Blackouts in Indonesia: A Debottlenecking Plan’, shared with the media on Monday (29/6/2026). In his study, Yayan assessed that the main issue affecting the reliability of the electricity system lies in the supply of primary energy. He noted that the DMO price mechanism, set at around US$70 per tonne, is below the Reference Coal Price (HBA), which in June 2026 ranged from US$84.53 to US$121.83 per tonne, thus encouraging mining companies to favour export markets over fulfilling domestic needs. This condition, according to Yayan, impacts coal supply for power plants. The study states that PLN’s coal requirement reaches approximately 154 million tonnes, whilst supply contracts only cover around 134 million tonnes, causing coal stocks at power plants to drop to around 10 days, well below the mandatory minimum of 25 days. Based on the modelling conducted, reforming the DMO pricing mechanism is estimated to be capable of closing around 72 per cent of the national power supply gap. ‘Fixing this one pricing rule alone closes roughly three-quarters of the blackout gap,’ said Prof Yayan in his study. In addition to the DMO, Yayan explained that the RKAB mechanism also needs to be evaluated to ensure sufficient coal supply for the electricity sector. The study notes that the production cut in the 2026 RKAB to around 600 million tonnes, down from a realisation of around 817 million tonnes in 2025, means the 25 per cent DMO allocation is no longer sufficient to meet the needs of power plants. After the DMO pricing mechanism is improved, increasing the RKAB is not seen as directly adding to energy supply, but rather serving as a security buffer for coal supply. The study recommends: ‘Do not use RKAB cuts to regulate prices. Increase the DMO allocation to 30 per cent and guarantee PLN’s tonnage first, treating the quota as a reliability reserve.’ According to Yayan, the evaluation of the DMO and RKAB must be placed within the framework of strengthening national energy security.