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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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Friday, 04 June 21
NEW COAL-FIRED POWER PLANTS IN INDIA WILL BE ECONOMICALLY UNVIABLE - IEEFA
Coal capacity additions face major stranded asset risk
Much of India’s 33 gigawatts (GW) of coal-fired power capacity currently under co ...
Thursday, 03 June 21
JUNE HBA IS HITTING ABOVE $100 AND SETTLED AT ITS HIGHEST SINCE OCTOBER 2020
COALspot.com: The Indonesia coal price reference for June 2021 settles at US$ 100.33 per ton FOB vessel.
The Indonesia coal pr ...
Wednesday, 02 June 21
INDONESIA RV WAS DOWN TO LOW/MID $20,000S DAY FOR PANAMAX/KAMSARMAX WITH DELIVERY S CHINA - BANCHERO COSTA
Panamax
A softening week in the Pacific basin with rates under a downward pressure mainly caused by the oversupply of tonnage in the area, said ...
Wednesday, 02 June 21
EUROPEAN UNION'S IRON ORE IMPORTS - BANCHERO COSTA
The European Union (27) is currently the fourth largest importer of iron ore in the world, after China, Japan, and South Korea.
Euro ...
Tuesday, 01 June 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.02 PCT - XINHUA
China Taiyuan coal transaction price index stood at 160.06 points Monday, down 0.02 percent week on week.
The index, released by Chi ...
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- VISA Power Limited - India
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
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