Coal Production and DMO Pricing Blamed for Electricity Crisis
Several regions on Java Island are still experiencing rolling blackouts, a condition that has persisted since at least Monday, 8 June 2026. According to Tempo records, power outages have occurred in various areas across all provinces in Java, including Jakarta. Most recently, blackouts were reported in a number of areas in Yogyakarta and Serpong, South Tangerang, Banten, on Friday, 19 June 2026.
Through a written statement, state electricity company PT PLN (Persero) acknowledged the outages were triggered by operational disruptions at two large power plants supplying the Java-Madura-Bali (Jamali) system. PLN Executive Vice President of Corporate Communications and Social and Environmental Responsibility Gregorius Adi Trianto said the disruption caused a decline in the Java system’s power supply capability. To maintain the balance between supply and demand, PLN was forced to implement temporary load management in several areas.
“This step was taken because there were technical operational constraints at the plants and two large generating units experienced disruptions, causing them to temporarily cease operations and reducing the system’s power supply capability,” Gregorius said in the written statement on Friday, 19 June 2026. However, he did not elaborate on which plants were affected or the specific cause of the disruption.
Amid the rolling blackouts, suspicions have emerged that limited coal supply is a contributing factor. Energy and Mineral Resources Minister Bahlil Lahadalia previously stated that PLN was experiencing a shortage of the medium-calorie coal required by several power plants. During a working meeting with Commission XII of the House of Representatives on 15 June 2026, Bahlil explained that the limited coal supply prevented a number of plants from generating electricity optimally.
Bahlil claimed the issue is linked to the significant gap between the domestic market obligation (DMO) coal price and the market price. Currently, coal for PLN is sold at a DMO price of US$70 per ton, while the June 2026 Reference Coal Price (HBA) reached US$121.83 per ton for 6,322 kcal/kg coal and US$84.53 per ton for medium-calorie 5,300 kcal/kg coal. “So, the selling price to PLN is no longer viable for the companies. That is the problem,” Bahlil said.
Beyond the DMO price factor, Gita Mahyarani, Executive Director of the Indonesian Coal Mining Association (APBI), believes there are other fundamental issues affecting coal availability for power plants. She pointed to the production cut policy under the 2026 Work Plan and Budget (RKAB), which limits producers’ flexibility. “Especially now that production is also in the process of adjustment through the RKAB, so the producers’ room for flexibility is not as large as before,” Gita said.
According to Gita, the situation is increasingly challenging because the mining industry is also facing rising operational cost components. Production costs, fuel, logistics, stripping ratios, and environmental obligations have all increased. This year, the rise in fuel costs is said to be quite significant. Therefore, Gita believes a review of coal policy is essential so that the fulfilment of the DMO is not only met in terms of volume but also provides coal with specifications that match the needs of power plants. “However, if we look at it, since the DMO coal price for PLN was set at US$70 per ton in 2018, the cost conditions in the industry today have changed considerably,” she said.
Previously, the Ministry of Energy and Mineral Resources announced plans to adjust national coal production in 2026. After reaching approximately 790 million tonnes in 2025, coal production this year is estimated to decline to around 600 million tonnes. However, the ministry has yet to release the final production figure for 2026. Deputy Minister of Energy and Mineral Resources Yuliot Tanjung said this year’s production is estimated to be in the range of 600 million tonnes. According to Yuliot, around 25 percent of total production is allocated for the Domestic Market Obligation, including supplying the needs of national power plants. “Adjusting to domestic needs, that is what the DMO stipulates,” Yuliot said when met at the Ministry of Energy and Mineral Resources office in Central Jakarta on Wednesday, 17 June 2026.