Yes — there is a strong argument that coal electricity in Indonesia feels cheaper than it really is because of PLN and government policy.
But the deeper answer is more nuanced:
- Coal is still operationally reliable and dispatchable.
- Solar is now often cheaper per kWh to generate.
- But solar creates grid/storage costs that simple comparisons often ignore.
So the real question is not:
“Which electricity source is cheaper?”
The real question is:
“Which system becomes cheaper over 20–30 years for an entire country?”
1. Is Indonesian coal artificially cheap?
Mostly yes.
Indonesia uses a DMO (Domestic Market Obligation) system where coal miners are forced to sell coal domestically to PLN at capped prices. PLN buys coal far below international market prices. (IISD)
Typical DMO cap:
- ~$70/ton for higher-grade coal
- ~$37–43/ton for lower-grade coal (Petromindo)
Meanwhile international coal prices during spikes were:
- $100
- $150
- sometimes $300+/ton
So yes:
- consumers see “cheap coal electricity”
- but part of that cheapness is policy engineering
It is effectively an indirect subsidy. Even policy researchers explicitly call it a fossil fuel subsidy mechanism. (IISD)
2. Does that mean coal is actually expensive?
Depends how you calculate.
Coal has several hidden costs:
| Hidden cost | Usually visible? |
|---|---|
| Health impact | No |
| Air pollution | No |
| Logistics | Partly |
| Imported machinery | No |
| Water usage | No |
| Carbon costs future | No |
| Ash disposal | No |
| Climate adaptation | No |
If all these are included, coal becomes much more expensive.
But:
coal plants already exist.
That matters enormously.
A fully-paid old coal plant can still generate electricity cheaply short-term because:
- infrastructure already built
- supply chain mature
- grid designed around coal
- dispatch stable 24/7
That’s why many countries still keep coal alive despite solar becoming cheaper per kWh.
3. Can Vietnam suppress solar cost by 70%?
The statement is partly true, but usually misunderstood.
Vietnam massively reduced solar electricity costs through:
- aggressive subsidies/FITs
- Chinese panel imports
- scale
- cheap labor
- fast permitting
- grid prioritization
Solar panel prices globally have fallen around 80–90% since 2009. (Renewable Energy Asia)
So if someone says:
“Vietnam reduced solar costs by 70%”
that is plausible depending on:
- what years are compared
- whether they mean panel cost or electricity cost
But there is a catch.
Vietnam expanded solar so fast that the grid struggled to absorb it. Now curtailment happens in some regions because daytime solar exceeds grid capability. (SolarQuarter)
Meaning:
- generating solar became cheap
- integrating massive solar became harder
4. The biggest misunderstanding: LCOE
People often compare only:
- coal plant generation cost
vs - solar generation cost
This is called LCOE (Levelized Cost of Electricity).
Solar now often wins.
Example modern utility-scale solar:
- China: ~$27/MWh (Solar Now)
Coal often:
- ~$60–120/MWh depending fuel prices
But LCOE ignores:
- storage
- transmission
- backup plants
- curtailment
- cloudy periods
- seasonal mismatch
This criticism is increasingly discussed even in energy communities. (Reddit)
5. Simple long-term system comparison
Very simplified national-scale example.
Coal-heavy system
Assume:
- coal generation: $60/MWh
- stable 24/7
- fuel needed forever
Over 30 years:
- you continuously buy fuel
- maintain pollution systems
- handle future carbon regulations
Very fuel-dependent system.
Solar-heavy system
Assume:
- solar generation: $30/MWh
- battery/storage/grid adds $40/MWh
Effective system:
- ~$70/MWh initially
Looks similar or slightly higher.
BUT:
Solar has a different curve:
- sunlight free forever
- panels getting cheaper
- batteries getting cheaper
- fuel cost nearly zero
Coal has opposite curve:
- fuel depletion
- transport inflation
- environmental pressure
- future carbon penalties
6. So which wins long-term?
Short-medium term (today–2035)
Coal often still wins in:
- grid stability
- industrial baseload
- developing countries
- nations with domestic coal
Especially countries like Indonesia:
- already built coal infrastructure
- abundant coal reserves
- subsidized coal prices
- weak grid storage
Coal remains economically powerful.
Long-term (2035–2055)
Solar + storage likely becomes cheaper overall.
Why?
Because solar economics scale differently:
- no fuel extraction
- no mining transport chain
- no combustion
- minimal operating labor
- hardware keeps improving
Battery prices are already falling rapidly. (Reddit)
Once storage becomes cheap enough:
coal loses its biggest advantage:
reliable nighttime electricity
7. The real future is probably hybrid
Most likely realistic future for Southeast Asia:
| Source | Role |
|---|---|
| Solar | cheap daytime bulk power |
| Coal | industrial backup/baseload transition |
| Hydro | balancing |
| Gas | flexible peaker |
| Battery | short-term stabilization |
| Nuclear (maybe later) | dense stable power |
Pure 100% solar is difficult for industrial economies today.
Pure coal is likely economically outdated over decades.
So the probable winner is:
hybrid systems slowly reducing coal dependence.
8. Final deep conclusion
You are noticing something important:
Coal appears cheap partly because:
- governments absorb costs
- PLN stabilizes prices
- infrastructure already exists
- external damages are not fully priced
Meanwhile solar appears “simple and cheap” but:
- grid integration is difficult
- storage still costly
- intermittency creates system costs
However…
The economic direction strongly favors solar over long periods because:
- sunlight has zero fuel cost
- technology keeps improving
- batteries keep declining in price
- coal has permanent fuel dependency
So:
Today:
Coal can still be economically competitive in Indonesia.
20–30 years:
Solar + storage likely becomes structurally cheaper for most electricity growth.
==========
Many governments and large corporations are already moving in that direction — not as a secret “elite” coordination, but because economics, industry protection, and climate policy are converging.
The important thing is to separate:
- real policy incentives
from - conspiracy framing.
Carbon tariffs are already starting to appear in practical form.
For example, the European Union launched the Carbon Border Adjustment Mechanism (CBAM), which gradually places carbon-related costs on imports like:
- steel
- cement
- aluminum
- fertilizers
- electricity
The logic is:
“If European factories must pay carbon costs, imported goods should too.”
This is partly climate policy,
but also partly industrial protectionism.
Why carbon tariffs are economically attractive
From a government perspective, carbon tariffs solve multiple problems at once:
| Problem | Carbon tariff helps because |
|---|---|
| Domestic factories complain | Imports become less advantaged |
| Green industries expensive | Tariff supports them |
| Government needs revenue | Tariffs generate money |
| Climate commitments | Emissions pressure shifts globally |
So even without conspiracies, the incentives naturally push toward carbon pricing systems.
Your intuition about timing is important
Carbon tariffs become much easier politically when:
- renewable energy becomes cheap enough
- battery/storage improves
- green manufacturing scales
- major economies transition first
Because then wealthy countries can say:
“We already paid transition costs. Now everyone else must comply too.”
That is why many developing countries worry about:
- losing export competitiveness
- new trade barriers disguised as climate policy
- unequal transition burdens
This concern is real and openly debated in international trade discussions.
Why developing countries are nervous
Countries like:
- Indonesia
- India
- Vietnam
- South Africa
often argue:
“Rich countries became wealthy using cheap fossil fuels first.”
Now developing countries are being told:
- decarbonize earlier
- absorb higher energy costs
- face tariffs if they don’t
That creates geopolitical tension.
But there’s another side too
Some countries see opportunity instead of only threat.
For example:
- China massively scaled solar manufacturing
- Vietnam became a solar manufacturing hub
- Indonesia is trying downstream nickel processing for EV supply chains
Meaning:
the green transition also creates:
- new industries
- new export markets
- technological leverage
The deeper economic pattern
Historically, whenever a new infrastructure era appears:
- railroads
- oil
- semiconductors
- internet
- AI
the countries controlling the new system gain leverage.
Green energy is likely another infrastructure transition.
So carbon tariffs are not only about climate.
They are also about:
- industrial competition
- supply chain control
- geopolitical influence
- technological leadership
Will carbon tariffs likely expand?
Very likely, yes.
Because once major economies invest trillions into green infrastructure, they have strong incentive to protect those investments.
Without tariffs:
- cheaper high-carbon imports could undercut domestic green industries.
So politically and economically, carbon tariffs become increasingly attractive.
The real uncertainty is:
- how aggressive they become
- how quickly they spread
- whether developing countries get transition support
- whether new trade conflicts emerge around them.
