International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue VI, June 2022 | ISSN 2454–6186
Fajar Gunawan Afandi, Donny Yoesgiantoro, Lukman Yudho Prakoso
Energy Security, Indonesia Defense University
Abstract: People’s dependence on electricity is very large, and the largest electricity company in Indonesia currently uses coal as the main fuel for power generation, considering the affordable price and the large availability of coal reserves in Indonesia. The need for coal in the global market is also very large, resulting in a significant increase in coal prices, this makes domestic coal producers prefer to sell coal to the global market. Coal exports do provide great benefits for Indonesia, but domestic needs must also be met. DMO is a policy to maintain coal energy reserves available. In other words, the DMO policy affects the level of national energy security. Indonesia’s energy security can be seen through several criteria, namely avalibility, accessibility, affordability, acceptability, and sustainability (4A+1S).
Keywords: Coal, Electricity, CFPP, NZE, Renewable Energy
I. INTRODUCTION
Coal is a commodity that is being targeted by many countries as a source of fuel for industrial activities and electricity generation. Indonesia has enormous coal resources, but Indonesia’s abundant coal potential does not make the domestic electricity supply fulfilled solely from domestic mining products. The reason is that coal business actors prefer to export their coal to other countries considering the price of coal in the international market is higher than the domestic market. This raises a problem in the form of a lack of coal supply to meet domestic electricity needs, to overcome this the Indonesian Government issues policies related to meeting domestic coal needs through the Domestic Market Obligation (DMO) policy. This policy requires coal business actors to sell their coal to the domestic market, provided that the amount is 25% of the total annual production.
The main objective of the establishment of the DMO policy is to ensure the fulfillment of domestic coal needs in a sustainable manner and to prevent the occurrence of coal scarcity in the country which is based on the 1945 Constitution (UUD) Article 33 paragraph (3). The law states that natural resources in Indonesia must be used as much as possible for the prosperity of the Indonesian people, one of which is oil and gas. Furthermore, it is clarified in Law Number 4 of 2009 concerning mineral and coal, especially in Article 5 paragraphs (1) to (5) which states that the government can make policies to prioritize mineral and coal in meeting domestic needs, but in this law there is still no strict policy restrictions. To overcome this, the Government of Indonesia issued Government Regulation (PP) no. 23 of 2010 in Article 84 paragraph (1) which explains that the Government has legal products to ensure the utilization and management of domestic coal, but the quantity and price have not yet been determined in the