PLN Faces Coal Spec Mismatch as Power Demand Heads for 174 Million Tons by 2027

JAKARTA, Investortrust.id — Total coal burn across Indonesia’s state-owned power fleet and contracted independent power producers (IPPs) is projected to climb to 174 million metric tons by 2027, compelling fuel supply arm PT PLN Energi Primer Indonesia (PLN EPI) to confront a widening mismatch between installed boiler specifications and the geological profile of national coal reserves.

To bridge the structural deficit of higher-grade feedstock, PLN Group is preparing a phased boiler modification and fuel-switching program across 16 coal-fired power plants (PLTU). The technological overhaul aims to adapt combustion systems designed for medium-rank fuel so they can reliably burn abundant, cheaper low-rank coal (LRC).

“Most of our power plants were designed to burn medium-calorific coal, whereas Indonesia’s coal availability is heavily concentrated in the low-calorie category,” said Rakhmad Dewanto, acting president director of PLN EPI, on Monday. “This is a shared structural challenge that we must address collaboratively.”

Feedstock Demands Clashing With Geological Realities

Of the 174 million tons projected for 2027, state utility PT Perusahaan Listrik Negara (PLN) has allocated 98 million tons for its internal generation subsidiaries and 76 million tons for private independent power producers.

Categorized by calorific value, the baseline fleet demands 89 million tons of medium-rank coal (MRC), 76 million tons of low-rank coal (LRC), and 8.51 million tons of high-rank coal (HRC).

Yet Indonesia’s underlying commercial reserves present the inverse picture. According to Energy and Mineral Resources Ministerial Decree No. 228 of 2025 on the National Mineral and Coal Resource and Reserve Balance, low-rank coal represents 24.06 billion tons, or 75.3% of total national reserves. By contrast, medium-rank deposits stand at 4.54 billion tons (14.2%), while high-rank reserves account for just 3.36 billion tons (10.5%).

Navigating Capital Costs and Grid Outage Risks

The coal-switching initiative seeks to expand fuel tolerance across 16 power stations down to gross as received (GAR) thresholds of 3,600 kcal/kg. However, utility executives cautioned that boiler recalibrations involve prolonged technical assessments, capital-intensive flue-gas and burner modifications, and careful reserve-margin management during temporary plant shutdowns.

“This does not mean that every coal-fired plant can switch to low-calorie coal right away,” Rakhmad said. “Technological adjustments require time and capital investment. We must also consider replacement power capacity when a plant is taken offline for boiler upgrades.”

The engineering initiative unfolds alongside sharp expansion in PLN EPI’s primary procurement operations. The volume of power-sector coal handled by the subsidiary rose from roughly 67 million tons in 2023 to 97 million tons in 2026.

Rakhmad emphasized that combining boiler modifications with enhanced supply-chain logistics will curb PLN’s exposure to narrow fuel grades, shield generation costs, and improve long-term energy security without straining state finances.