The export ban was enforced to guarantee meeting the coal demand of steam power plants (PLTUs) belonging to state electricity company PT PLN (Persero) and independent power producers (IPP).
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MEDIANA / STEFANUS OSA TRIYATNA
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In this Sept. 27, 2021 file photo, steam billows out of the cooling towers at a coal-fired power station in Nanjing in east China's Jiangsu province. The world's facing an energy crunch. Europe is feeling it worst as natural gas prices skyrocket to five times normal, forcing some factories to hold back production. Reserves depleted last winter haven't been made up, and chief supplier Russia has held back on supplying extra. Meanwhile, the new Nord Stream 2 gas pipeline won't start operating in time to help if the weather is cold, and there's talk Europe could wind up rationing electricity. China is feeling it too, seeing power outages in some towns.
JAKARTA, KOMPAS — The government expects that the coal export ban during 1-31 Jan. 2022 can overcome the coal supply shortage to meet the needs of power plants. However, mining companies have voiced their objection to the policy. The present situation is seen as an opportunity to review the policy on fulfilling the domestic coal demand, the domestic market obligation (DMO).
Ridwan Jamaludin, the director general of Minerals and Coal at the Energy and Mineral Resources (ESDM) Ministry, said on Saturday (1/1/2022) the export ban on coal was effective for holders of the mining operation license (IUP) or the special mining operation license (IUPK) that were in the production phase, IUPK holders conducting contractual follow-up operations, and working contracts on coal mining exploitation.
The export ban was enforced to guarantee meeting the coal demand of steam power plants (PLTUs) belonging to state electricity company PT PLN (Persero) and independent power producers (IPP). If an export ban were not imposed, the coal supply shortage would affect more than 10 million PLN customers, comprising the general public as well as businesses in and outside Java, Madura and Bali.
“Without the export ban, nearly 20 PLTUs with a capacity of around 10,850 MW would cease operating. This has the potential to disrupt the stability of the national economy. Once the coal supply for power plants is realized, exports can resume. We will evaluate it after 5 January 2022,” said Ridwan.
The government regulates the specific obligation to supply coal for domestic needs (DMO), amounting to at least 25 percent of the approved production plan, while the selling price of coal to supply electricity to household customers is set at US$70 per metric ton. Yet, the realization of the DMO has been below the standard.
AFP/NOEL CELIS
A worker sorts coal near a coal mine in Datong, China's northern Shanxi province on November 2, 2021.
According to Ridwan, of the determined supply of 5.1 million metric tons of coal to PLTUs, only 35,000 metric tons, or less than 1 percent, had been met as of 1 Jan. 2022. The situation can cause blackouts on an extensive scale.
Agung Murdifi, PLN executive vice president of corporate communications and social and environmental responsibility, said the company would strive hard in terms of its operations and realize the coal reserve supply standard to support at least 20 days of operations.
Objection
General chairman Pandu Sjahrir of the Indonesian Coal Mining Association (APBI-ICMA) expressed his objections to the export ban, saying that a solution to the critical coal supply for PLN’s PLTUs and the IPP should have been discussed first.
Their implementation was in line with the agreed provisions, including defaulting on, or failing to meet, the supply obligation.
According to Pandu, the coal supply for each PLTU under PLN management as well as IPPs highly depended on their contracts. Their implementation was in line with the agreed provisions, including defaulting on, or failing to meet, the supply obligation.
The impacts of the coal export ban would include, according to Pandu, state losses of $3 billion per month in foreign exchange from exports, loss in regional revenues and potential disputes between sellers and buyers due to producers’ failure in delivering coal exports.
REUTERS/SHIVANI SINGH
Water vapour rises from a cooling tower of a China Energy ultra-low emission coal-fired power plant during a media tour, in Sanhe, Hebei province, China July 18, 2019.
“The general imposition of the export ban, as a result of the noncompliance of a handful of companies, will harm the companies that have been compliant and are even frequently asked to cover the supply shortage," he said.
Contacted on Sunday (2/1) in Jakarta, executive director Fabby Tumiwa of the Institute for Essential Services Reform (IESR) was of the view that the high trend in world coal prices had been a temptation for coal mining companies. Moreover, there was a big price disparity between the DMO, the coal reference price (HBA) and global prices.
The government, said Fabby, could make the DMO price dynamic to control the price disparity with the HBA and global prices controlled. It must take this firm measure to face the pressure of the energy transition.
Meanwhile, Energy Watch executive director Mamit Setiawan deemed the export ban was appropriate. The coal supply shortage for PLTUs would lead to not meeting the power demand of households and industries.
Coal miners that were “delinquent” as regards the DMO for power, said Mamit, should be subjected to stern penalties from the government. (MED/OSA)
