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