Despite having abundant natural resources at its disposal (including coal and gas), Indonesia has difficulty to supply enough electricity to its people and businesses. Robust economic growth over the past decade has given rise to increased domestic demand for electricity but the country has not been able to adequately meet demand resulting in frequent blackouts and in one of the lowest electrification rates (the percentage of Indonesian households connected to the nation's electricity grid) in the region (about 80.4 percent at end-2013).

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Indonesian state-owned electricity firm Perusahaan Listrik Negara (PLN) said that Indonesia - Southeast Asia's largest economy - is expected to nearly double domestic consumption of thermal coal over the next eight years in an attempt to meet the nation's growing electricity demand. Moreover, coal, of which the country has huge reserves at its disposal, is regarded a better fuel source in electricity generation compared to expensive diesel. At present, many power stations in Indonesia are still diesel-powered.

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