coal power plant has been restored to the Java grid, but state-owned electricity firm PLN’s deeper issues persist: a US$70 price cap that bars it from competing for supply, regulatory ambiguity over where domestic coal flows and a compensation fund that remains in limbo.
PLN says the Java electricity system is beginning to stabilize after one of two troubled coal-fired power plants was brought back online.
PLN president director Darmawan Prasodjo said two plants owned by independent power producers began experiencing operational disruptions last week. However, one facility resumed operations and began feeding power into the grid at 6 p.m. on Sunday.
“One of the plants has been successfully restored and is now synchronized with the Java electricity system and has begun supplying electricity to increase the reliability of the Java electricity system,” Darmawan said in a statement on Monday.
While the immediate disruption shows signs of easing, analysts warn that the structural conditions that created the electricity shortfall remain in place.
PLN is struggling because the government has made it impossible for the state utility to pay market prices for coal, Ahmad Zuhdi Dwi Kusuma, associate principal at the Energy Shift Institute (ESI), told The Jakarta Post on Monday.
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The coal price cap of $70 per tonne under the Domestic Market Obligation (DMO) policy, maintained to insulate electricity prices from global volatility, has left PLN unable to compete for supply.
