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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, 01 July 21
END TO COAL POWER BROUGHT FORWARD TO OCTOBER 2024
Press Release: The deadline to phase out coal from Great Britain's energy system has been brought forward by a whole year, highlighting the UK& ...
Thursday, 01 July 21
WHY BUILD 600 NEW UNPROFITABLE COAL PLANTS? - DEUTSCHE WELLE
Governments in Asia are planning 600 new coal plants that could lose investors $150 billion and derail efforts to limit temperature rise in line wi ...
Thursday, 01 July 21
FIVE ASIAN COUNTRIES ACCOUNT FOR 80% OF NEW COAL POWER INVESTMENT - THE GUARDIAN
Five Asian countries are jeopardising global climate ambitions by investing in 80% of the world’s planned new coal plants, according to a rep ...
Wednesday, 30 June 21
DELTA DUNIA MAKMUR RECORDED AN IMPROVED REVENUE IN Q1 2021; REVENUE INCREASED BY 49% QOQ TO US$160 MILLION ON THE BACK OF COAL PRICE RECOVERY
PT Delta Dunia Makmur Tbk. (“DOID”) released its consolidated financial and operating results that include its primary and wholly-owned ...
Wednesday, 30 June 21
BUMA SIGNED MINING AGREEMENT WITH ADARO
PT Delta Dunia Makmur Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA"), has entered into an agreement for the p ...
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- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
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