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Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
 On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Although the report showed a net profit increase of IDR22 trillion (tn), a 53% rise from 2022, the Institute for Energy Economics and Financial Analysis (IEEFA) calculates that PLN would have recorded a substantial loss of IDR120tn without subsidies and compensations from the Government of Indonesia (GOI).
At first glance, PLN’s cash reserves increased by 9% for the fiscal year 2023, and its electricity sales rose around 7%. This increase in sales contributed the most to PLN’s income growth, amounting to IDR22.2tn. However, despite the improved performance and positive figures, there are underlying red flags.
Despite increased cash reserves, PLN’s liquidity ratio (0.92), quick ratio (0.79), and cash ratio (0.39) were all below 1.00. These figures indicate that the utility is struggling to meet its urgent payment obligations with cash or current assets.
PLN’s financial performance heavily depends on GOI’s subsidies and compensations, which have risen by 16.4% from IDR123tn in 2022 to IDR143tn in 2023. However, these incremental increases could halt in 2025. Discussions at the Ministry of Finance are underway to reduce PLN’s subsidies and compensations under the new administration's programs and policies.
An imminent solution for PLN's financial independence is required. PLN's fiscal potential can be unlocked with minimal GOI assistance by improving efficiency, particularly by reducing operating costs through the adoption of renewables.
Reducing cost and volatility via renewables
The Basic Cost of Providing Electricity (BPP) is arguably the main factor determining electricity costs, which are then translated into tariffs paid by customers. Any increase in BPP adds to the GOI’s financial burden.
Since 2020, coal and gas purchase costs have increased significantly. In 2023, purchased electricity from coal and gas contributed to a 14% increase in operational expenses and accounted for 63% of total operating costs. On average, PLN spent around US$4-5 cents per kilowatt hour (¢/kWh) for coal purchases, almost 40% higher than in 2020.
Additionally, PLN’s exposure to US$-denominated coal prices requires reconsideration. Despite the GOI's coal price cap, PLN has struggled with coal price fluctuations due to exchange rate changes. While purchases are denominated in US$, PLN’s tariff collections are in Indonesian rupiahs.
Apart from the base fuel purchasing costs, PLN also had to factor in shipping and plant maintenance costs. As coal-fired power plants age, they lose efficiency and require more coal to produce each kilowatt hour (kWh) of electricity.
Considering the difficulty in reducing purchased electricity costs and renegotiating power purchase agreements with independent power producers, PLN should accelerate the transition from fossil fuel-based energy to avoid price volatility.
Renewable energy sources are low-cost to operate compared to fossil fuel power plants. Furthermore, IEEFA’s recent report has shown that the levelized cost of electricity is around US$4.78¢/kWh for solar and US$4.77¢/kWh for wind. In comparison, coal costs around US$6.5¢/kWh, which is at least US$1.7¢/kWh more.
Solar and wind are now the lowest-cost energy sources globally and are expected to become even cheaper by 2030. Notably, maintaining coal-fired power plants is more expensive than constructing entirely new, rapidly built renewable energy plants.
Consequently, the gradual retirement of coal-fired power plants and a concerted transition to renewable energy sources will be a win-win solution for Indonesia to fulfill its Paris Agreement commitments and financial goals.
Mutya Yustika, IEEFA
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Thursday, 26 August 21
INDIA IMPORTED 17.06 MLN TONNES OF LPG IN 2020; UP 11.5% Y-O-Y
Global LPG trade remained fairly positive in 2020, despite the global economic impact from COVID-19, and surged strongly in the first half of 2021. ...
Thursday, 26 August 21
MARKET INSIGHT - INTERMODAL
24th of August 2021, the Baltic Dry Index reached 4,201, a YTD high and the highest since May 2010.
Cape 5TC daily average @ 51,472
...
Tuesday, 24 August 21
COAL PRICE RALLY TO PRESSURE CHINESE POWER GENCOS’ MARGINS FITCH RATINGS
Fitch Ratings expects the pressure on Chinese power generation companies’ (gencos) profit from the recent coal price surge to weaken their cr ...
Tuesday, 24 August 21
TIGHT POWER SUPPLY IN CHINA AMID STRONG DEMAND, HIGH COAL PRICES - FITCH RATINGS
China experienced tight power supply in 1H21 on stronger than expected power demand as economic activity continued to recover, Fitch Ratings says i ...
Monday, 23 August 21
CHINESE COAL PRODUCTION RISES 4.9 PCT IN 1ST 7 MONTHS OF 2021 - NBS
Official figures demonstrated that the Chinese raw coal production surged 4.9 percent annually to 2.26 billion tonnes in the January-July period of ...
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- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- White Energy Company Limited
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
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