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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, 29 January 21
OPEC+, COVID-19 AND ENERGY TRANSITION - 3 THEMES IMPACTING OIL MARKETS AND REFINING IN 2021 - WOOD MACKENZIE
Wood Mackenzie’s latest outlook report shows that the art of balancing oil markets and the refining sector in 2021 hinges upon three key them ...
Thursday, 28 January 21
STRONG CHINESE THERMAL COAL IMPORTS TO BENEFIT INDONESIAN MINERS IN THE NEAR TERM - FITCH RATINGS
China's thermal coal imports are likely to remain strong ahead of the Chinese New Year in mid-February on robust demand, high utilisation at do ...
Thursday, 28 January 21
WIND PROPULSION FOR DRY BULK CARRIERS - OLDENDORFF
Oldendorff Carriers (OC) has signed a Joint Development Project (JDP) with Anemoi Marine Technologies (Anemoi), Lloyd’s Register (LR) and Sha ...
Thursday, 28 January 21
BUMA PRICED A USD400 MILLION 7.75% 5-YEAR SENIOR NOTES
PT Delta Dunia Makmur Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama priced a USD400 million 5-year (non-callable 2-year)& ...
Wednesday, 27 January 21
MARKET INSIGHT - INTERMODAL
As we have entered the era off renewable energies, all industries globally give max effort to minimize their carbon footprint and consequently thei ...
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- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Economic Council, Georgia
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- White Energy Company Limited
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