Could king coal retain its throne or would it have to abdicate in favour of renewables? The war is intensifying day by day and power generation is the sector where ripples of the oncoming tsunami could most be felt.
The latest global battleground is Indonesia and 2 recent apparently contradictory reports which have emerged regarding its energy policy. One report prescribed gradual deletion of coal as thermal power fuel, replacing it with renewable energy, the other report suggested treading the path of low emission technology which, it claimed, would benefit in the long term and eventually coal could become highly competitive in comparison with renewable energy.
So the billion-dollar question now is could there be a paradigm shift in fuel use in the Indonesian power utility sector? Would coal have to give away its pivotal position in power generation to renewable energies?
As per global coal observers, if major Asian economies along with Indonesia do undergo this shift, this could have a major impact in the Asian seaborne coal trade. As a result of suddenly surplus availability, coupled with static Asian demand, price of imported coal could be plunging southward. In that scenario, the billion dollar question would be whether Jakarta could hold on to its prevailing import coal price of $77/ton.
And who knows, if the imported coal price really hits the floor, the growth engines of Asia, namely China and India, would not toy with the idea of resurging coal imports?
And all these tectonic movements could be due to a recent global study which suggested Indonesian power utility sector must embrace more of renewable energy instead of fossil fuels like coal. As per the estimate of the report, the Indonesian power utility sector could save as much as $76 billion in the next 25 years if the renewable path is taken.
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