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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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- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
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