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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, 06 January 21
INDONESIA EXCEEDS COAL PRODUCTION TARGET IN 2020
Indonesian coal production reached 557.54 Million Tons in 2020 1.37% higher than of last year’s total target of 550.00 Million Tons, accordin ...
Wednesday, 06 January 21
CHINESE CITIES REPORTEDLY GO DARK AS COUNTRY FACES SHORTAGE OF COAL, A MAJOR AUSTRALIAN EXPORT - CNBC
Several major Chinese cities have reportedly gone dark as authorities limit power usage, citing a shortage of coal.
Analysts said pr ...
Tuesday, 05 January 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP - XINHUA
China Taiyuan coal transaction price index stood at 136 points Monday, up 0.91 percent week on week.
The index, released by China Ta ...
Tuesday, 05 January 21
THE INDONESIA COAL PRICE REFERENCE SOARS TO HIGHEST ONE-MONTH INCREASE SINCE DECEMBER 2016
COALspot.com: The Indonesia coal price reference for January 2021 settles above $75 for the first time since July 2019 and to highest one-month inc ...
Monday, 04 January 21
U.S. RENEWABLE ENERGY CONSUMPTION SURPASSES COAL FOR THE FIRST TIME IN OVER 130 YEARS - EIA
In 2019, U.S. annual energy consumption from renewable sources exceeded coal consumption for the first time since before 1885, according to the U.S ...
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- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- The University of Queensland
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
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