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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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- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
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