PLN?s coal requirement to rise to 81m tons

By Thomas Sembiring

State-owned electricity company PT PLN has requested for higher coal supply this year at around 81 million tons, up from realized consumption of 70.6 million tons last year, according to a senior government official.

Director of Coal Management and Development at the Directorate General of Mineral and Coal, Adhi Wibowo told Petromindo.com on Tuesday that PLN has proposed the 2016 coal requirement volume to the directorate.

Adhi said that the higher coal requirement is in line with the projected increase in electricity demand this year, following slower demand last year.

The country?s coal miners are obliged to first meet demand at home before exporting their products under the government?s domestic market obligation (DMO) policy. PLN is the single largest coal consumer at home, accounting for about 80 percent of the DMO.

The DMO volume last year was set at about 23.4 percent of the country?s coal output, which last year reached 392 million tons. The government has yet to set this year?s coal production target and DMO volume, but Adhi said last week production would be about the same as last year?s amid the lingering weak price of the commodity.

Increasing number of local coal miners are looking into the domestic market amid falling demand in key export markets of China and India. Demand at home is expected to rise as the government accelerates the development coal-fired power plants to meet growing electricity demand.

PLN last year was allocated with 77.4 million tons of coal supply, but actual consumption was only 70.6 million tons. Slower economic growth has been seen as one of the factors causing lower electricity demand by industries last year.

Editing by Reiner Simanjuntak