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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, 15 January 21
OVER US$50 BILLION IN GAS POWER PROJECTS AND LNG IMPORT FACILITIES AT RISK OF CANCELLATION IN BANGLADESH, PAKISTAN AND VIETNAM - IEEFA
Pakistan and Bangladesh have already cancelled tenders for LNG imports
Emerging markets such as Vietnam, Pakistan and Bangladesh tha ...
Friday, 15 January 21
VIETNAM'S EXTRAORDINARY ROOFTOP SOLAR SUCCESS DEALS ANOTHER BLOW TO THE REMAINING COAL PIPELINE - IEEFA
9.3 gigawatts peak of solar capacity, equal to 6 coal power plants, installed in less than a year
Vietnam’s solar power indust ...
Friday, 15 January 21
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 14 January 21
KOREA MIDLAND POWER INVITED BIDS FOR AUSTRALIAN COAL FOR THREE YEARS SUPPLY
COALspot.com: Korea Midland Power Co. Ltd, issued an International tender for total 1,560,000 MT of Min.5,700 kcal/kg NCV coal of Australian Origin ...
Wednesday, 13 January 21
CHINA THERMAL GENCO PROFITS FACE PRESSURE AMID POWER SHORTAGES - FITHCH WIRE
High coal and gas prices will put near-term pressure on margins for thermal power generators in China, says Fitch Ratings. However, the power short ...
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- The Treasury - Australian Government
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
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