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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$1.7¢/kWh more.
Solar and wind are now the lowest-cost energy sources globally and are expected to become even cheaper by 2030. Notably, maintaining coal-fired power plants is more expensive than constructing entirely new, rapidly built renewable energy plants.
Consequently, the gradual retirement of coal-fired power plants and a concerted transition to renewable energy sources will be a win-win solution for Indonesia to fulfill its Paris Agreement commitments and financial goals.
Mutya Yustika, IEEFA
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Wednesday, 14 April 21
MARKET INSIGHT - INTERMODAL
After a series of months where the dry bulk sector was attracting most of the buying interest, tankers SnP activity spiked in the previous weeks. O ...
Tuesday, 13 April 21
INDONESIAN COAL PRICE REFERENCE IN APRIL UP AGAIN ON FIRM DEMAND
COALspot.com: The Indonesia coal price reference for April 2021 settles at US$ 86.68 per ton FOB vessel.
The Indonesia coal pr ...
Monday, 12 April 21
CHINA'S ECONOMIC RECOVERY PUSHES COAL MINES TO INCREASE YIELD - GLOBAL TIMES
China’s fast economic rebound from coronavirus has driven up electricity demand, leading to higher consumption of coal which is seeing rising ...
Monday, 12 April 21
GLOBAL COAL PRODUCTION EXPECTED TO RISE BY 3.5% IN 2021, SAYS GLOBALDATA
Global coal output is estimated to have declined by 2% in 2020 due to COVID-19-related lockdowns and restrictions, with significant reductions obse ...
Wednesday, 07 April 21
KOMIPO ISSUED A TENDER FOR TOTAL 1,560,000 METRIC TONS OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for total 1,560,000 Metric Tons of Bituminous coal for i ...
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- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Minerals Council of Australia
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
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