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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, 10 June 21
U.S. COAL PRODUCTION TO TOTAL 600 MMST IN 2021, 11% MORE THAN IN 2020 - EIA
EIA expects U.S. coal production to total 600 million short tons (MMst) in 2021, which is 61 MMst (11%) more than in 2020.
The increase is dri ...
Wednesday, 09 June 21
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
The In-Person Maritime Event
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
culminates successfully in Dubai
Press Release: ...
Wednesday, 09 June 21
MARKET INSIGHT - INTERMODAL
“Counter cyclical investments.” usually take place by investing in a “bad” market at the point that ensures that the acquir ...
Saturday, 05 June 21
KOMIPO INVITED 5600 NAR COAL OFFERS FOR THREE YEARS SUPPLY; 520,000 MT PER YEAR
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
Saturday, 05 June 21
IT'S TIME FOR THE BIDEN ADMINISTRATION TO CHAMPION RENEWABLE ENERGY IN THE PHILIPPINES, NOT NUCLEAR OR FOSSIL GAS - IEEFA
Fossil gas and nuclear investments risk locking in costly, outdated infrastructure for the long-term
The United States has spent the ...
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- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Australian Coal Association
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
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