Generators from India to Southeast Asia and China are building or planning new coal-fired units designed to run on low-rank, sub-bituminous coal from Indonesia.
Such coal has been growing in supply and currently trades at a discount of 24% to higher quality bituminous coal from rival supplier Australia.
But two factors are calling into the question the wisdom of building long-term projects reliant on low-rank Indonesian coal.
The first is that the Indonesian government is planning new rules and taxes designed to increase its revenue from coal mining, and the authorities appear not to mind if the result of these policies is a sharp reduction in exports.
The second is that the increasing demand for low-rank coal has boosted its price relative to better quality fuels, eroding the economics of burning the poorer quality supplies.
Across Asia there is currently 363 gigawatts of coal-fired capacity either under construction or in advanced planning, Paul Baruya, global analyst at the International Energy Agency's Clean Coal Centre, told the Coal Markets conference in Singapore this week.
Of this, 109 gigawatts is in India, 106 gigawatts in China and the bulk of the rest in Southeast Asian countries including Malaysia, Vietnam and
The bulk of these new units use more efficient super-critical or ultra super-critical boilers and are planned to use coal with a calorific value of 4,000 kilocalories per kilogram (kcal/kg) or less.
This type of coal is abundant in Indonesia and much of that nation's recent growth in exports has been made up of lower-quality grades.
In contrast, Australia, the second-largest exporter of coal used in power plants after Indonesia, typically supplies fuel in a range of 5,000 to 6,500 kcal/kg.