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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, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
Monday, 08 January 24
KOSPO TO BUY 80000 MT OF INDONESIAN LOW CALORIFIC VALUE COAL FOR FEB 2024
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for the supply of Indonesian Low Calorific Value Coal from qualified suppliers for Korean ...
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- Planning Commission, India
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- White Energy Company Limited
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- VISA Power Limited - India
- The University of Queensland
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
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