Govt cites supply, cost hurdles in coal plant biomass co-firing program

The government has acknowledged persistent challenges in the implementation of biomass co-firing at coal-fired power plants (PLTUs), citing supply constraints, cost competitiveness issues and fragmented logistics as key obstacles to scaling up the program nationwide.

The Energy and Mineral Resources Ministry (MEMR) said the sustainable development of bioenergy has yet to be fully realized in Indonesia, largely because biomass feedstock supply depends heavily on other sectors such as agriculture, plantations and forestry.

“Since biomass feedstock production falls under the agriculture, plantation and forestry sectors, cross-ministerial policy coordination is crucial to ensure a stable and sustainable supply for the energy sector,” MEMR expert staffer for natural resources economics Lana Saria said at an Ombudsman event in Jakarta on Thursday.

Lana noted that, beyond supply availability, the biomass co-firing program faces economic challenges stemming from strong global demand for biomass. International market prices are often more attractive than domestic prices, making it difficult to secure sufficient feedstock for local power generation.

“This is partly due to the electricity basic cost of supply (BPP), which limits how much utilities can pay for biomass domestically, thereby constraining local competitiveness,” she said.

Another major challenge lies in the structure of the biomass supply chain, particularly for waste-based biomass, which remains fragmented and dominated by small- to medium-scale producers. The geographically dispersed nature of production sites contributes to high logistics costs, making it harder to offer biomass at prices competitive for state utility PLN.

“The national biomass industry is still in a growth phase and has not yet reached maturity. For that reason, we do not see the implementation of a domestic market obligation (DMO) for biomass—similar to coal—as an urgent necessity at this stage,” Lana said.

Read also: PLN plans 1.16 GW solar and storage projects for IPP bidding

Meanwhile, Ombudsman chairman Mokhammad Najih said a recent assessment by the agency found that on-the-ground implementation of the co-firing program remains uneven and below targets set out in national policy and PLN’s Electricity Supply Business Plan (RUPTL).

“Key issues include the lack of guaranteed biomass availability and continuity, inconsistent biomass quality, limited technology readiness and high retrofit costs,” Najih said at the same event.

He warned that unresolved economic inefficiencies and weak governance could undermine the effectiveness of the program, and even create administrative risks if not properly managed.

“These issues could lead to program inefficiencies and potentially maladministration if the program is not tightly managed and closely supervised,” Najih said.

Biomass co-firing is a central pillar of PLN’s energy transition strategy, aimed at reducing emissions from existing coal-fired plants by partially substituting coal with biomass. PLN has expanded co-firing to dozens of PLTUs nationwide as part of its efforts to boost renewable energy output without building new power plants, although supply and cost challenges continue to constrain broader deployment.

Editing by Reiner Siimanjuntak