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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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Monday, 25 January 21
ULTRAMAX YET ANOTHER POSITIVE WEEK FOR THE SECTOR, WHICH SAW INCREASED DEMAND ACROSS ALL BASINS - BALTIC BRIEFING
Capesize
The Capesize market rocked and rolled these past few days. But by weeks end little had changed on the Capesize 5TC as it settled down ...
Monday, 25 January 21
NEW LAW IN CALIFORNIA, USA, AFFECTING SHIPOWNERS' LIABILITY FOR OIL POLLUTION - BIMCO
Members are advised that amendments to the so-called Lempert-Keene-Seastrand Oil Spill Prevention and Response Act of 1990 in the State of Californ ...
Monday, 25 January 21
COAL INDIA SAYS GEARED UP TO MEET SURGE IN FUEL DEMAND FROM POWER SECTOR - PTI
State-owned Coal India Ltd on Saturday said that it is well geared to meet any surge in demand for coal from the power sector.
The s ...
Sunday, 24 January 21
GOVT ASSURES COAL INDIA OF 'FULL SUPPORT', STRESSES ON LEARNING 'NEW THINGS' - PTI
Coal Minister Pralhad Joshi assured Coal India of full government support, even as he said the PSU needs to learn “new things” for impr ...
Saturday, 23 January 21
GOVT PLANNING TO OPEN UP COAL MARKETING TO STREAMLINE PROCESS - THE INDIAN EXPRESS
The government is considering opening up coal marketing, Coal Secretary Anil Kumar Jain said on Thursday. Currently, production by Coal India is al ...
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- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- MS Steel International - UAE
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
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