Essay by Eric Worrall
“… market forces are stacked against renewables as long as there is excess supply of power, mostly from coal, in the Java-Bali power grid. …”
Talking clean energy into existence
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Editorial board (The Jakarta Post) Jakarta Sat, August 23, 2025
One of the more surprising parts of President Prabowo Subianto ’s state budget address on Aug. 15 was a bold statement on clean energy: “We must achieve 100 percent power generation from new and renewable energy within 10 years or sooner. I believe this is achievable.”
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Perhaps the President veered off script in the budget speech, delivered annually ahead of Independence Day, and then misspoke or conflated related issues, something that is not uncommon even for the most experienced speakers.
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Investment is often hampered by more general business regulations, such as local content requirements. This has become an issue in the domestic production of solar photovoltaic panels, which relies on imports of certain components.
Aside from regulations, market forces are stacked against renewables as long as there is excess supply of power, mostly from coal, in the Java-Bali power grid.
The door for clean power will open as soon as the one for dirty power is shut. Coal power is often artificially cheap thanks to the domestic market obligation, which requires coal mining firms to sell a quarter of their output on the domestic market at a capped price.
In addition to oversupply, the coal price cap further distorts the market, leaving little room for independent renewable power producers, even though the costs of solar power have come down impressively over the past few years.
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Read more: https://www.thejakartapost.com/opinion/2025/08/23/talking-clean-energy-into-existence.html
I have to give the author top marks for honesty. Clearly there is no point trying to kickstart the Indonesian renewable energy revolution until forced coal plant closures create some gaps in the market.
Most Indonesian coal is brown coal, which is essentially a zero cost fuel. Nobody wants to buy brown coal, because brown coal is difficult to ship and sell, due to the cost and marginal profitability of shipping such low quality coal any kind of distance. Brown coal’s tendency to spontaneously combust when stored for any length of time adds to the fun of handling such low grade material in any way other than digging it up and immediately feeding it into the boiler of the adjacent power station.
Such brown coal adjacent power plants can provide rock steady reliable electricity for less than 10c / kWh, and since there are no interested buyers offering competing uses for that coal, brown coal power stations are a potential path to building a grid which is virtually immune to the ups and downs of international commodity prices. Even heavily subsidised renewables struggle to compete with that kind of rock bottom cost and stability.
While Indonesian coal reserves are substantial, the USA is the real king of coal, with the largest proven coal reserves of any nation – enough to supply at least a hundred years of US energy needs, likely a lot longer. Despite this abundance, only 16% of US energy currently comes from coal.
So the choice is continue using inexpensive and reliable energy sources or convert to unreliable and expensive sources. Which cup is the pea under?
Is the pea organic? sarc
Aren’t they all? Have you ever eaten an inorganic pea (aka a rock)?
It a subsidised pea.
“We must achieve 100 percent power generation from new and renewable energy within 10 years or sooner. I believe this is achievable.”
Truly a bold statement, nested somewhere between sheer ignorance and utopian fantasy.
All those crackpipes smoked seem to have fried a couple brains on this planet.
But… Nick said wind and solar are free. They aren’t.
But but but, Nick said they are free . . . so they MUST be!!
And Hick’s post was on the Internet. Everything on the Internet is true. It says so on the Internet.
COAL ELECTRICITY LESS COSTLY, AVAILABLE NOW, NOT PIE IN THE SKY, LIKE EXPENSIVE FUSION AND SMALL MODULAR NUCLEAR
https://www.windtaskforce.org/profiles/blogs/coal-electricity-less-costly-available-now-not-pie-in-the-sky
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It is very easy for coal to compete with wind and solar
In the US, Utilities are forced to buy offshore wind electricity for 15 cents/kWh.
That price would have been 30 cents/kWh, if there had not been 50% subsidies.
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But to make the wind electricity function on the grid, etc., about 11 c/kWh is needed, IN ADDITION to the 15 c/kWh, or 26 c/kWh for the full cost of wind electricity, FCOE
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Coal gets very little direct subsidies in the US.
Here is an example of the lifetime cost of a coal plant.
The key is running steadily at 90% output for 50 years, on average
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Assume mine-mouth coal plant in Wyoming; 1800 MW (three x 600 MW); turnkey-cost $10 b; life 50 y; CF 0.9; no direct subsidies.
Payments to bank, $5 b at 6% for 50 y; $316 million/y x 50 = $15.8 b
Payments to Owner, $5 b at 10% for 50 y; $504 million/y x 50 = $21.2 b
Lifetime production, base-loaded, 1800 x 8766 x 0.9 x 50 = 710,046,000 MWh
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Wyoming coal, at mine-mouth $15/US ton, 8600 Btu/lb, plant efficiency 40%, Btu/ton = 2000 x 8600 = 17.2 million
Lifetime coal use = 710,046,000,000 kWh/y x (3412 Btu/kWh/0.4)/17,200,000 Btu/US ton = 353 million US ton
Lifetime coal cost = $5.3 billion
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The Owner can deduct interest on borrowed money, and can depreciate the entire plant over 50 y, or less, which helps him achieve his 10% return on investment.
Those are general government subsidies, indirectly charged to taxpayers and/or added to government debt.
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Other costs:
Fixed O&M (labor, maintenance, insurance, taxes, land lease)
Variable O&M (water, chemicals, lubricants, waste disposal)
Fixed + Variable, newer plants 2 c/kWh, older plants up to 4 c/kWh
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Year 1 O&M cost = $0.02/kWh x 710,046,000 MWh/50 y x 1000 kWh/MWh = $0.284 b
Year I Coal cost = $15/US ton x 353 million US ton/50 y = 0.106 b
Year 1 Bank/Owner cost = (15.8, Bank + 21.2, Owner)/50 y= 0.740 b
Year 1 Total cost = 1.130 b
Year 1 Revenue = $0.08/kWh x 710,046,000 MWh/50 x 1000 kWh/MWh = $1.136 b
For on-land wind and solar to cost 8 cents/kWh, about 50% of federal and state tax credits are needed.
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For lower electricity cost/kWh, borrow more money, say 70%
Traditional Nuclear has similar economics; life 60 to 80 y; CF 0.9 in the US.
Tax deductions for expenses and depreciation are not subsidies.
Take them away and there will be a lot of noise by business, and CPAs.
Businesses should be taxed on their gross revenues
Now businesses are trying to have as little profit as possible to minimize taxes.
Tax businesses on gross revenue? Sounds like you have never run a business. If, in a single FY, a business has revenue of $100M but costs are $105M, what tax should it pay? Please inform us.
This is pure Marxist economic drivel.
“… within 10 years or sooner.”
Is anyone allowed to ask why?
No.
A king is not capable of stopping the rise of the tide … but politicians are easily capable of changing the laws of physics to meet their political goals.
I am pretty sure that is the 5th Law of Thermodynamics!
Doofusdynamics.
Stupid cheap, reliable energy and stupid market forces ruining it for everyone else.
Regardless of nation, consumers, businesses, industries and even governments want inexpensive and reliable energy sources, regardless of what those sources supposedly might do to the environment today or to the climate in 2050 and beyond. If sources of electricity or heat aren’t available at a decent price or at all someone is guaranteed to feel the backlash. And if it’s governments that may be voted out of office because of energy policies that cause higher costs and/or inconvenience to voters, it’s pretty obvious what path they’ll choose.
Yes – consumers want food, warmth, light, prosperity, businesses want profits, industries want cheap power, Governments want votes and bribes – not fanatical suicide cults.
“Most Indonesian coal is brown coal, which is essentially a zero cost fuel.”
I don’t believe that is true. The complaint of this author is that Indonesia has a reservation policy requiring 25% of production, which might have been exported, is reserved for the local market. That is black coal and is what they use. The problem is that internal demand has dropped, and so that reserved black coal sells for a low price, which does make it very competitive with renewables.
The problem is that inferior performance sources of electricity generation (w & s) are being foist upon supply grids that are established, stable, reliable, inexpensively sourced.
And for what reason?
(Sorry for using the word “reason” in the same comment as w & s).
Nick, the resources I reviewed suggest most Indonesian coal could reasonably be described as brown coal.
eg. https://globalenergycertification.org/indonesian-coal-quality-coal-reserves/
Since brown coal is difficult to profitably ship, it is effectively a zero cost fuel. The only costs are any leasing costs associated with the coal deposit, plant and equipment capital costs, and the cost of operating extraction equipment.
Indonesia sells more coal (tonns per year) on the international markets than any other country. It is most what is call Sub-bituminous C classification which puts it in a different class altogether to Victorian brown coal. Whilst it can cause some problems for plants not designed for it, it is used throughout Asian without major porblems.
They obviously sell what they can, but there is clearly enough low grade coal left over to keep their electricity cheap.
Coal of any sort will always be very competitive with unreliable electricity sources….
… because it is reliable…
This is particularly true in Victoria, where it regularly supplies over 70% of grid electricity.
That is why unreliable sources need massive subsidies and feed in mandates.
Oddly – shop owners changed from wind to coal to power their ships.
“ shop owners” ????
😉
Well, shop owners rely on goods that come to them via ship, so you could argue that shop owners is correct in this case 🙂
“The problem is that internal demand has dropped”
Really ??.. data shows a massive increase in coal usage.
Indonesia is taking steps towards nuclear power. https://thorconpower.com
Why are officials and politicians still talking about renewables? Renewables are expensive, short lived, ugly, non recyclable, intermittent and need constant backup. They can not sustain the grid, they can not sustain a modern society. Past time to move on and put an end to the lie about renewables.
“the costs of solar power have come down impressively over the past few years”
The costs of building solar power have come down. That just makes it cheaper to generate intermittent, weather-dependent, low capacity factor, short-lived power. The costs of maintaining, distributing and backing up that power are ever-increasing.
I don’t pay wholesale prices, only retail which are going ever upwards due to the supporting costs of ruinables (in South Australia with its high proportion of ruinables)
We must achieve 100 percent power generation from new and renewable energy within 10 years or sooner. I believe this is achievable.
Rubbish and stop listening to neo-colonial leftists and their East India Companies as they won’t come without massive concessions and slushfunding-
Huge $10billion wind farm planned for off Australia’s east coast has been scrapped
Listen to Trump the reformer telling you how they’re not your friends and how they’re rigging the global trade system against you if you get in bed with them.
PS: CO2 trading is simply their opium for your masses stoopids.
Equinor pulled out of offshore wind farms off Spain and Portugal in August 2024 and also closed its Vietnam operation earlier that year.
At the time it said it may also scale back operations in other countries in an effort to cut costs.
Its head of renewables, Paal Eitsheim said “It’s getting more and more expensive and we think things are going to take more time in quite a few markets around the world”
https://www.offshore.wind.biz/2024/08/29/equinor-axes-offshore-wind-plans-in-spain-and-portugal-weighs-further-market-exits/
It is not “market forces” that are stacked against renewables but, by their own admission, government interference in that market i.e. by “domestic market obligation, which requires coal mining firms to sell a quarter of their output on the domestic market at a capped price.”
And their solution? Oh, even more government interference in the market to eliminate coal mines and subsidise renewables. Brilliant!