18 June 2026 (closed)
Jakarta Composite Index (6,172.34) -48.40 -0.78%
Is a Shortage of Coal Behind the Recent Power Outages across Indonesia?
In recent weeks it has been remarkable how often (and long) blackouts occur across urban centers in Indonesia. While blackouts are a fact of life for those living in Indonesia, the recent wave of power outages intensifies speculation that they are intentional (so-called rolling blackouts) to avoid a total blackout of the power system.
In May 2026, there occurred a huge blackout on Sumatra, which did not receive a lot of attention in media. This blackout started on the evening of 22 May 2026 and only started recovering within 6 to 10 hours. Rolling blackouts and unstable power supply persisted through 24 May 2026 in several regions across Sumatra, including Aceh, North Sumatra, West Sumatra, Riau, and Jambi. This blackout caused widespread disruption to cellular networks, digital transactions, and municipal water pumps.
According to investigations by state-owned electricity company Perusahaan Listrik Negara (PLN) in cooperation with local authorities, the collapse of the power system was triggered by bad weather that caused physical damage and a broken transmission cable on the 275 kV main transmission line between Muara Bungo and Sungai Rumbai in Jambi.
However, amid the war in the Middle East (and closure of the Strait of Hormuz) that prompted high global oil (and energy) prices, people instantly speculated whether this was a strategy to save on expensive energy sources or masked a shortage of energy sources.
Contrary to the total blackout in Sumatra, Java experienced a wave of rotating and rolling blackouts that hit multiple major regions on the island. On Java, power outages (lasting around three or four hours) intensified between 8 and 19 June 2026. Anecdotal evidence from Yogyakarta reveals that different sections are hit by blackouts on different days (suggesting rolling blackouts).
Interestingly enough, Energy and Mineral Resources Minister Bahlil Lahadalia stated a few days ago that Indonesia is facing a limited supply of medium-calorie coal (5,200-kcal) needed to fuel a number of PLN's power plants. Lahadalia said that while PLN needs 154 million tons of coal in 2026, it has only managed to secure contracts for around 134 million tons, implying there is a 20 million tons shortfall.
According to the Energy and Mineral Resource Ministry, the coal supply crunch stems from economic friction rather than actual mineral scarcity. Mining companies have grown increasingly hesitant to sell high-demand medium-calorie coal at the government’s capped Domestic Market Obligation (DMO) price of USD $70 per ton when international market rates are far more lucrative. This price gap, compounded by rising domestic production costs and surging stripping ratios (the volume of overburden miners must remove to access coal), has severely squeezed profit margins.
The situation presents a striking paradox. Indonesia remains one of the world's largest coal producers and exporters. However, the vast majority of its domestic output consists of low-grade coal, leaving its modern power grid highly vulnerable to shortages of the higher-quality grades its critical infrastructure depends on.