Jakarta. The government should restrict exports of medium- and high-calorific-value coal until the fuel requirements of state electricity company PLN are met, an energy policy think tank said Tuesday, warning that declining coal quality and limited domestic supplies could threaten the reliability of the national power system.

Indonesia Resources Studies (IRESS) said the government needed to prioritize higher-grade coal for domestic coal-fired power plants, particularly those requiring blending to maintain efficient and reliable operations.

"The restrictions are necessary because domestic reserves of medium- and high-calorific-value coal are limited, while demand from power plants continues to increase," IRESS Executive Director Marwan Batubara said in Jakarta.

The think tank linked coal quality problems to widespread power disruptions in Java in June, although the extent to which coal quality contributed to those outages has not been independently established.

Marwan argued that the problem was not simply the volume of coal available to PLN, but whether its calorific value met the technical requirements of power generation facilities.

"PLN's problem is not just how many tons of coal it receives, but also the calorific value. Medium- and high-rank coal is becoming scarce. Unless it is prioritized for domestic power plants, it will flow to export markets where prices are far more attractive," he said.

Higher-Grade Coal Accounts for Small Share of Reserves
Citing Energy and Mineral Resources Ministry data, IRESS said coal with a calorific value of approximately 6,000 kilocalories per kilogram on a gross-as-received (GAR) basis accounts for only about 5% of Indonesia's national coal reserves.

Coal with a calorific value of around 5,000 kcal/kg GAR represents approximately 8%, while lower-grade coal of around 4,200 kcal/kg GAR accounts for roughly 73%.

The figures illustrate the dominance of lower-calorific-value coal in Indonesia's resource base, even as some domestic power plants require higher-grade fuel or blending to meet their operating specifications.

Energy and Mineral Resources Minister Bahlil Lahadalia previously acknowledged that the quality of Indonesia's coal reserves has been declining as higher-calorific-value deposits become depleted.

The GAR measurement refers to coal's energy content in its received condition, including its total moisture content. It is commonly used to assess the effective heating value of coal delivered to buyers.

IRESS said coal quality concerns became more prominent during rolling blackouts in Java earlier this year, when the need for medium-calorific-value coal for blending at PLN power plants received renewed attention.

To address supply constraints, the Energy Ministry subsequently assigned an additional 16.8 million tons of coal with a calorific value exceeding 4,500 kcal/kg for PLN through December 2026.

The measure was intended to improve fuel availability at coal-fired power plants and reduce the risk of further electricity disruptions.

Price Discrepancy
IRESS also highlighted the gap between domestic coal prices for electricity generation and international market prices, arguing that the difference creates an incentive for producers to prioritize exports.

Coal supplied to the domestic electricity sector is subject to a price ceiling of $70 per ton.

By comparison, Indonesia's benchmark coal price in June 2026 was $84.53 per ton for coal with a calorific value of 5,300 kcal/kg and $121.83 per ton for coal rated at 6,322 kcal/kg, according to the figures cited by IRESS.

Although the price categories are not directly comparable without accounting for coal specifications and contractual terms, Marwan said the gap demonstrated the commercial challenges of securing higher-grade coal for domestic power generation.

IRESS urged the government to introduce pricing arrangements that would make supplying medium- and high-calorific-value coal to PLN commercially viable.

Export Restrictions 
The think tank recommended a series of measures to strengthen domestic electricity security, including improving the quality of coal supplied to power plants, restricting exports until PLN's requirements are met and revising pricing mechanisms to encourage domestic deliveries.

IRESS also called for retrofitting coal-fired power plants so they can operate using lower-calorific-value coal, citing modifications undertaken at the Suralaya power plant as an example.

Such upgrades could reduce dependence on increasingly scarce higher-grade coal and allow power generators to make greater use of Indonesia's more abundant lower-grade reserves.

Marwan said export restrictions should remain in place while the necessary power plant upgrades are being implemented.

"During the retrofit process, medium- and high-rank coal reserves must be prioritized for electricity generation. Once power plants are ready to use lower-calorific-value coal, exports can be opened up again," he said.

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