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Integration of renewable energy hindered by coal price cap

Indonesia's coal price cap encourages the consumption of coal while slowing the integration of renewable energy into the country's power grid.


  • A price cap on mandatory sales of Indonesian coal to Perusahaan Listrik Negara (PLN), the state-owned electricity company, distorts the market and locks in coal consumption
  • There are five other viable strategies to shore up PLN's finances without harming the integration of renewable energy into Indonesia's power supply
  • While subsidy reforms may affect consumer power prices, there are additional strategies to offset these impacts