Coal’s Reality Check vs Green Fairy Tales
Updated Mar 13, 2026
Cut the fluff—coal isn’t dead in Indonesia. It’s alive, expanding, and central to the country’s energy reality.
Despite what the IEA and green pundits chant, coal still powers ~66% of Indonesia’s grid—a figure projected to remain high through the late 2020s (reuters.com). New coal plants? Being built. Renewables? Growing, but decades from replacing baseload.
Even with billions in transition funds, the Indonesian government greenlights new coal infrastructure. The reason is straightforward: renewables can’t keep the lights on yet. Intermittency, infrastructure gaps, and capital costs tie renewables to narratives, not grids. Nuclear? Politically radioactive. Coal, gas, oil? Cheap, proven, dispatchable.
Demand Dynamics — Industry Outpaces Hype
Urbanisation, industrialisation, nickel smelters—Indonesia’s growth engines require reliable baseload power. Domestic coal demand isn’t slowing; captive plants are expanding. Exports dipped ~12% in early 2025, but that’s an inventory cycle and regional policy adjustment—not a structural shift (ft.com).
China and India still import coal in massive volumes—volatile, yes, but not collapsing. Meanwhile, Southeast Asia (Vietnam, Philippines) is absorbing the slack.
IEA and Forecasting Follies — Political Modeling over Real-World Sense
The IEA sells narratives of orderly, rapid green transitions—a dream world that ignores cost curves, capacity gaps, state utility mandates, and political inertia. Forecasts projecting a coal drop by 2027 assume perfect execution and global alignment. Grids fail. Transitions stall. Funding arrives late or not at all. Indonesian planners know this—they’re building more coal plants, not fewer (reddit.com).
It’s not ignorance—it’s pragmatism. Coal remains the foundation of industrial growth. Forecasts that assume otherwise are fantasy dressed as analysis.
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MBAP — On the Frontline, Not on the Funeral Pyre
Stock Snapshot & Fundamentals
• Share price: ~1,770 IDR, off ~35% YTD, ~40% YoY (idnfinancials.com).
• Valuation: P/E ~6.8× vs peers ~27×—deep value territory.
• Dividends: Yield ~18% (Rp38/sh for FY2024)—payout ratio ~15%.
• Earnings: FY 2024 revenue ~US$218M (-3%), net income ~US$19M (-12%).
Production & Targets
• 2024 production set at 2.01 Mt (–4%), sales target 2.3 Mt (+8%) (argusmedia.com).
• Capex US$58M in 2024; ramping to US$70M in 2025, with ~67% directed into renewables (solar & pellets).
Strategic Outlook
• Short-term: 2 Mt output steady; domestic/SEA demand limits export dips. Margins hold if MBAP controls costs.
• Medium-term: ASEAN and industrial demand may grow, lifting sales 5–10% by 2027. Low cost base + stable P/E = upside.
• Risks: export softness, ESG pressure, policy whiplash—but none derail baseline demand.
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Mass Psychology & Vector Analysis
Markets hate complexity—they prefer binary narratives. The MBAP share price collapse? Fear driving momentum, not fundamentals driving valuation. Vector analysis—the product of trend direction and sentiment weight—favors stabilisation. Behind the panic signals sit strong cash flows and underpriced resilience. Crowd psychology gives coal a black eye. Rational analysis shows a steady vector.
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Integrated Narrative
Indonesia’s 2024 coal record: 836 Mt produced (+8% YoY), yet exports hit a three-year low in Jan–Apr 2025 (argusmedia.com, ft.com, apnews.com). China and India cut imports amid rising domestic production—but the demand didn’t vanish. It shifted. Vietnam, Thailand, and domestic industrial consumers are absorbing the volume (reuters.com).
Despite the export dip, global coal prices dropped to four-year lows—making coal the cheapest baseload fuel in Asia and squeezing gas and renewables on price. Natural gas projects falter on delays, funding gaps, and fierce coal competition.
MBAP allocated US$46.9M of its US$70M 2025 capex into renewables—solar capacity growing from 17 to 51 MWp, biomass pellets targeting 150k tpa operational by 2026 (idnfinancials.com). Strategic diversification—but not a pivot. Coal remains the cash engine funding the transition.
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Why Forecasts Are “Essential Rubbish”
• Missed reality: Agencies forecast coal decline by mid-decade. Indonesia expanded output and maintains ~66% coal grid share (reddit.com).
• Political bias: IEA projections are built on green policy assumptions, ignoring local politics, grid constraints, and regional economics.
• Green dreams vs engineering reality: Batteries, grid storage, transmission upgrades—all theoretical until priced down and built at scale. Indonesia must add 8 GW of renewables annually to hit its 2040 coal exit plan. So far, it has averaged 0.66 GW/year (reddit.com).
• Emotional vs rational: Mass psychology declares “coal dead.” Ground-level economics says “keep the plants running.” Forecast errors compound when models ignore this disconnect.
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Hard Truth Forecast — 2025–2030
1. Domestic coal usage stays high as electrification and industrial output grow. Renewables can’t plug the gap fast enough.
2. Exports wobble with China/India inventory cycles, but SEA and domestic markets cover the dips.
3. Prices stay under pressure short-term, but tightening supply and industrial demand re-firm markets by 2026–27.
4. MBAP remains cash-flow strong: low P/E, high yield, moderate earnings decline. Renewables capex builds long-term optionality without undermining core operations.
5. Forecasts will keep failing. Until alternatives operate at grid-scale, coal stays essential. Everyone else is Don Quixote wielding solar panels against windmills.
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Bottom Line
Forecasts from the IEA or energy think tanks are not insight—they’re press releases. They peddle tidy visions of a clean future while burying assumptions about reliability, cost, infrastructure, and politics.
Coal’s “demise”? A fantasy fueled by wishful modelling.
Renewables? A project, not a panacea.
MBAP? A value bet in plain sight—cheap, yielding, and grounded in demand reality.
Stop quixoting, start vectoring: coal’s alive. As long as Indonesia builds factories, mines nickel, and powers homes, coal demand rides high. Any investor ignoring that is swinging at shadows.
