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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, 13 January 21
COAL TO BE BIGGEST CONTRIBUTOR TO INDIA'S $5 TRILLION ECONOMY: AMIT SHAH - BUSINESS STANDARD
The Centre on Monday awarded the letter of allocation to successful bidders of coal mines under the commercial auction held during October-November ...
Monday, 11 January 21
MUTED COAL RECOVERY IN 2021 - BALTIC EXCHANGE
Coal demand is expected to rebound in 2021
Medium-term outlook is less favourable although demand declines are expected to be subtle ...
Sunday, 10 January 21
KOREAN GENCOS INVITED BIDS FOR TOTAL 880,000 TONS OF COAL FOR MARCH 2021 LOADING
COALspot.com: Korea South-East Power Co., Ltd. (KOEN), on behalf of EWP, KOSPO, KOSEP and KOWEPO issued an international tender for total 880 ...
Friday, 08 January 21
INDIA COULD COMPETE AGAINST CHINA IN SOLAR MODULE PRODUCTION WITH THE RIGHT GOVERNMENT SUPPORT - IEEFA
The focus should be on helping manufacturers become globally competitive
Although one of the top 10 solar module producers in the world, India ...
Thursday, 07 January 21
FITCH FORECASTS DOUBLING IN ASIAN WIND, SOLAR CAPACITY BY 2029, TOPPING 1,500GW
Despite some near-term delays due to the Covid-19 pandemic, solar power and offshore wind will drive steep growth in non-hydro renewables in Asia, ...
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- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Parliament of New Zealand
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
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