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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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Monday, 09 August 21
CHINA COAL INVENTORY THINS AMID PEAK POWER DEMAND- STATE MEDIA : REUTERS
China’s coal inventories have dropped to near historic lows since August due to peak summer electricity demand and transportation bottlenecks ...
Wednesday, 04 August 21
THE INDONESIAN COAL PRICE REFERENCE SURGED TO A FRESH RECORD HIGH OF USD 130.99 A TON IN AUGUST 2021
COALspot.com: The Indonesian Coal Price Reference ( HBA) surged to a fresh record high of USD 130.99 a ton in August 2021.
The ...
Wednesday, 04 August 21
MARKET INSIGHT - INTERMODAL
Unlike the Dry Bulk and Container sectors where freight rates have surged into 2021, the tankers market continues to experience lackluster earnings ...
Sunday, 01 August 21
SEABORNE HARD COAL TRADE IN 2020 DECREASED BY 149 MILLION MT, OR 12.1%, TO 1,083 MILLION MT - GERMAN COAL IMPORTERS ASSOCIATION
- Reduced coal-fired power plant fleet secures Germany’s power supply in severe winter of 2020/2021; little wind availability and hence stron ...
Wednesday, 28 July 21
IN THE PHILIPPINES, COAL’S DEMISE MAKES WAY FOR A RENEWABLE ENERGY BOOM - IEEFA
Imported gas lock-in could undermine the economic benefits of a clean energy transition
The Philippines’ energy sector is on t ...
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- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- MS Steel International - UAE
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- VISA Power Limited - India
- White Energy Company Limited
- London Commodity Brokers - England
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
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