Govt to Raise Coal DMO at 30% in NRE Bill

The government plans to increase the domestic market obligation (DMO) for coal mining companies to 30 percent from 25 percent of the total production plan, as contained in the Bill on New Renewable Energy (NRE) which has just passed the harmonization in the Legislative Body of the House of Representatives (DPR).

Article 6 paragraph (6) states that to ensure primary energy availability in non-renewable power plants utilization, coal for power plants is supplied by selling coal for domestic demands with a minimum threshold of 30 percent. The price is set at US$70 per ton price for 6,322 kcal per kg calorie coal.

Through the harmonization, the Legislative Body proposes to Energy Commission to include the amount of coal DMO and its price benchmark into the legal norms. Legislative Body Chairman Supratman Andi Agtas said several things really need attention and have been accommodated in the NRE Bill.

"Indonesia as the world's largest coal-producing country often still experiences shortages for domestic supplies, because there is a huge price disparity between domestic and international reference coal prices," he said.