Norman Harsono, Jakarta – The government expects domestic coal consumption to fall as much as 5 percent this year due to lower coal-fired power plant activity in the virus-ridden economy.
The Energy and Mineral Resources Ministry said on Thursday that consumption was projected to reach around 147.25 million tons this year "if the COVID-19 pandemic continues," down from an initial Domestic Market Obligation (DMO) expectation of 155 million tons.
Ministry spokesman Agung Pribadi said the DMO realization reached 31.54 million tons of coal in the first quarter, out of which 18.8 percent was allocated for "non-electricity uses" and the remaining 81.2 percent for Indonesia's top electricity company, state-owned PLN.
"The COVID-19 pandemic has reduced coal demand from industries. But, the realization is enough to fulfill domestic needs," he said.
The ministry's DMO requires coal miners to sell at least one-fifth of their production domestically at US$70 per ton to keep electricity prices at a minimum. Around 60 percent of the country's total power generation capacity comes from coal plants.
The ministry data also show that Indonesia's coal production, which reached 143 million tons in the first quarter, is still on track to meet the year-end production target of 550 million tons.