What is the true cost of coal in Central Java?

The document examines the 'true cost' of coal-fired power in Central Java, Indonesia, contrasting the financial and social costs of planned coal expansion against the potential of renewable energy. It argues that current capacity plans may lead to unnecessary overcapacity and that the inclusion of health and climate externalities makes renewables a cheaper alternative.

• Current electricity capacity expansion plans in Java may be excessively large; while PLN aims for a reserve margin of 25–30 per cent in Java–Bali, current plans could see this margin surpass 40 per cent by 2026, significantly exceeding the global average of 10 to 20 per cent.
• The 'true cost' of coal electricity generation in Indonesia in 2015 was approximately USD 116 per MWh when accounting for generation costs, subsidies (USD 5 per MWh), air pollution externalities (USD 19 per MWh), and climate change externalities (USD 42 per MWh).
• By 2020, the total cost of coal power in Central Java—including existing and proposed plants—is estimated at nearly USD 9.3 billion annually, with USD 4.7 billion of that amount stemming from health and climate change externalities.
• Proposed coal capacity in Central Java carries additional financial burdens through capacity payments in power purchase agreements between PLN and independent power producers, estimated at USD 3.16 billion per GW of installed capacity, totaling USD 19 billion over 25 years for 6 GW of new capacity.
• Central Java possesses significant renewable energy potential across solar, wind, geothermal, and hydro, totaling a potential capacity of 12,881 MW which could generate 17,607 GWh of electricity—roughly 43 per cent of the generation expected from new coal plants in the region.

APA

Sanchez, L., Lontoh, L., & Christensen, L. T. (2017). What is the true cost of coal in Central Java? International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/case-study-what-true-cost-coal-central-java.pdf

Chicago

Sanchez, Lourdes, Lucky Lontoh, and Lasse Toft Christensen. What is the true cost of coal in Central Java? International Institute for Sustainable Development, 2017. https://www.iisd.org/system/files/publications/case-study-what-true-cost-coal-central-java.pdf.

Wikipedia

{{cite report |last1=Sanchez |first1=Lourdes |last2=Lontoh |first2=Lucky |last3=Christensen |first3=Lasse Toft |title=What is the true cost of coal in Central Java? |publisher=International Institute for Sustainable Development |date=October 2017 |url=https://www.iisd.org/system/files/publications/case-study-what-true-cost-coal-central-java.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sanchez2017what, author = {Sanchez, Lourdes and Lontoh, Lucky and Christensen, Lasse Toft}, title = {{What is the true cost of coal in Central Java?}}, institution = {International Institute for Sustainable Development}, year = {2017}, month = oct, url = {https://www.iisd.org/system/files/publications/case-study-what-true-cost-coal-central-java.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }