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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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Tuesday, 25 May 21
KOREA SOUTHERN POWER INVITED BIDS FOR 870,000 MT OF MIN 5300 NCV COAL FOR 2021 TO 2023.
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 870,000 MT of Min 5,300 kcal/kg NCV coal for Augu ...
Tuesday, 25 May 21
CHINA’S COAL OUTPUT RISES IN FIRST FOUR MONTHS - XINHUA
China’s raw coal output rose 11.1 percent year on year to 1.29 billion tonnes in the first four months of 2021, official data showed.
&nb ...
Tuesday, 25 May 21
MARINE SHIPPERS BULK UP: ANOTHER GAME OF CHICKEN IN THE WORKS? - THE KOREA TIMES
Global shipping companies have been placing orders for large ships, with many anticipating further increased competition within the next three year ...
Friday, 21 May 21
MARKET INSIGHT - INTERMODAL
The dry bulk market’s counter seasonal surge so far into the first half of the year -in a sort of 2010 manner - and Capesize’s recent r ...
Wednesday, 12 May 21
U.S. COAL PRODUCTION TO INCREASE BY 43 MMST IN 2021 TOTAL 582 MILLION SHORT TONS - EIA
U.S. energy Information Administration expects U.S. coal production to total 582 million short tons (MMst) in 2021, 43 MMst (8%) more than in 2020. ...
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- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- VISA Power Limited - India
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Australian Coal Association
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
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