Coal Supply Issues and Pricing Policies Fuel Electricity Crisis in Java

Rolling blackouts continue to affect numerous regions across Java, Indonesia, with the power outages persisting since at least June 8, 2026. The disruptions have impacted various areas throughout the island, including the capital Jakarta, as well as Yogyakarta and Serpong in Tangerang Selatan, Banten.

PT PLN (Persero), Indonesia's state-owned electricity company, acknowledged the blackouts, citing operational issues at two large power plants that are critical to the Java-Madura-Bali (Jamali) electricity system. Executive Vice President of Corporate Communications and CSR at PLN, Gregorius Adi Trianto, stated that these disruptions have reduced the power supply capacity for the Jamali system. To maintain a balance between supply and demand, PLN has implemented temporary load management in affected areas.

While PLN has confirmed technical operational constraints and the temporary shutdown of two major power units, the company has not provided specific details regarding the affected plants or the exact causes of the disruptions. However, speculation points towards a critical shortage of coal as a primary trigger for the ongoing electricity crisis.

Minister of Energy and Mineral Resources Bahlil Lahadalia previously indicated that PLN is facing a deficit in its supply of medium-calorie coal, essential for several power plants. He explained that this scarcity prevents some power plants from operating at optimal capacity. Lahadalia attributed the problem to a significant price disparity between coal designated for domestic needs under the Domestic Market Obligation (DMO) policy, which is set at $70 per ton, and the prevailing market price, which reached $121.83 per ton for high-calorie coal and $84.53 per ton for medium-calorie coal in early June 2026. "So, the selling price to PLN is no longer profitable for the companies. That is the problem," Bahlil stated.

Adding to the supply concerns, Gita Mahyarani, Executive Director of the Indonesian Coal Producers Association (APBI), pointed to fundamental issues beyond pricing. She cited the 2026 Work Plan and Budget (RKAB) policy, which mandates production cuts, as limiting producers' flexibility and impacting coal availability for power generation.