From CFACT

By Duggan Flanakin

Seventeen years after then-candidate Barack Obama promised skyrocketing electricity costs as a result of his campaign to bankrupt the coal industry, President Trump’s Energy Department announced it would provide $625 million to expand electric power generation fueled by coal.

As part of that commitment, Energy Secretary Chris Wright targeted $100 million for refurbishing and modernizing existing coal-fired power plants, with a focus on advanced wastewater management, fuel switching between coal and natural gas, and coal-natural gas co-firing systems.

While the enemies of carbon dioxide emissions wail and gnash their teeth at the continued use of coal-fired electricity, practical world leaders listened carefully to Obama’s words: abandoning coal would, at the least, triple the cost of already scarce electric power for their emerging factories, data centers, hospitals, and schools.

Then-Indonesian President Joko Widodo, for example, recognized in 2014 that his nation was blessed with abundant coal reserves and set about utilizing that affordable, available, high-energy resource as a springboard for Indonesia’s transformation into an industrialized, middle-income nation. Today, Indonesia’s fast-growing economy relies on coal for two-thirds of its electricity.

Widodo directed PLN, the state-owned utility, to sign long-term “take or pay” contracts to purchase electricity from domestic coal mines even if their output was not immediately needed. Mines were ordered to sell to PLN at below-market rates as part of what turned out to be a strategy that boosted Indonesia’s output to 57 gigawatts of coal-fired capacity by the end of Widodo’s second term in 2024 — a 250% increase during his 10 years in office.

Current Indonesian President Prabowo Subianto, following in Widodo’s footsteps, wants his nation to achieve 8% annual growth, and the current 10-year plan calls for another 70 GW of capacity by 2035 — adding 70% to the current total. While Subianto is committed long-term to renewable energy, the practical pathway to rapid capacity growth remains with “black gold.”

President Widodo’s initiatives were financed largely via China’s Belt and Road Initiative, which was at its peak as he assumed office. China enabled fulfillment of his vision to build high-speed rail, factories, and even a new national capital city — all of which required massive increases in electric power.

The Chinese found the side benefits alone were well worth loading up Indonesia with debt — $45 billion in development finance over the last decade, including $9.3 billion in 2024. The money was concentrated on energy, mining, construction, transportation, and telecommunications. As of July, Chinese entities were planning or already building at least 17 generating units at nine coal-fired power plants across Indonesia.

One example of how China has benefited from its investment strategy is the cornering of the global nickel market. While Indonesia is by far the world’s largest source of nickel ore, Chinese entities today control at least 75% of its nickel refining capacity. In 2022, about 90% of Indonesia’s nickel exports went to China. Worse, Chinese contractors working in Indonesia have relied heavily on Chinese — rather than domestic Indonesian — labor and materials.

Officially, Chinese President Xi Jinping in 2021 pledged to stop financing coal-fired power plants, but any facility used to foster “green energy” is apparently exempt from that pledge. Still, Chinese money is backing 52 coal-fired power plants outside its borders — a pittance compared with the number it is building inside the Middle Kingdom.

By that standard, the U.S. could well justify using coal to power data centers, critical metals mining operations, and a host of other projects. Coal is a cheaper, faster way to boot new projects than waiting for nuclear permits and construction or relying on wind or solar for such sensitive operations that are already taxing both the grid and computing capacity.

Despite the rapid growth of Indonesia’s coal-to-electricity industry (much aided by the Chinese), China towers over the rest of the world in construction of new coal power capacity. China started the construction of another 95 GW in 2024 alone — 93% of the world total. At the same time, China is rapidly expanding its use of wind, solar, and hydropower.

What may seem strange to those outside China is that the nation is seemingly building far more capacity than it can even use, despite rising electricity demand. The Chinese were using only about 50% of their coal power generation capacity in 2024. But this means they can ramp up quickly to meet growing demands from AI, robotics, and other emerging technologies.

China remains by far the world’s leading producer, user, and importer of coal, accounting for over half of global production (at about 4.78 billion metric tons in 2024). India, another country seeking to rapidly increase its electric power generation capacity, is a distant second at 1.05 billion metric tons. Coal-fired power plants still provide three-quarters of India’s electricity.

Indonesia, in 2024, produced about 836 million metric tons of coal and is now the world’s largest thermal coal exporter, with exports supplying markets in China, India, Japan, and South Korea. Global South nations Australia and South Africa come in fifth and seventh (with the U.S. and Russia at fourth and sixth). Australia exports much of its coal production, while South Africa depends on coal for nearly 85% of its electricity and also profits from coal exports.

While U.S. coal production continued to shrink in 2024, that could turn around under Trump policies that favor an industry that built America’s infrastructure. Coal still employs 130,000 miners, technicians, engineers, and plant operators, and other 270,000 in sectors that rely on coal (including railroads and barge lines). With average salaries of about $90,000 a year, coal is the lifeblood of many of America’s small towns and rural communities.

Curiously, Russia is on the verge of becoming the odd man out in global coal markets, thanks in part to President Trump’s Ukraine-war-related sanctions and in part to China’s increasingly symbiotic relationship with Indonesia as both investor and importer. According to a new Kpler analysis, Russian producers may have to choose between low prices and negative margins or reductions in production to stay afloat.

With Russian coal cut off from most Western markets, it is increasingly held hostage to Chinese demand — and China is finding it cheaper to import coal from nearby Indonesia than from Russia’s own Far Eastern ports. Russia still exports coal to India and Turkey, but China remains its chief coal buyer — and China is becoming a fickle partner.

The Global South — led by China, India, and Indonesia — is being built by coal, and African nations with coal availability are also looking at man’s oldest, most trusted fuel to grow their economies.

These nations agree with President Obama that any other path would be financially prohibitive. And they agree with President Trump that ignoring coal’s ability to bolster economic growth and upgrade national security trumps imaginary dates for a global “climate catastrophe.”