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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, 04 January 21
BLISS FOR SHIPOWNERS! DAMAGES MAY BE CLAIMED IN ADDITION TO DEMURRAGE FOR VOYAGE CHARTERPARTY DELAY - WFW
KNOWLEDGE TO ELEVATE
In a significant decision for the maritime sector, The Eternal Bliss[1], the English Commercial Court has resol ...
Sunday, 03 January 21
INDIA: COMMERCE MINISTRY LAUNCHES COAL IMPORT MONITORING SYSTEM - PTI
CIMS shall require importers to submit advance information in an online system for imports of items and obtain an automatic registration number by ...
Wednesday, 30 December 20
A LOOK BACK INTO 2020: THE HEADWINDS, THE TAILWINDS AND EVERYTHING IN BETWEEN - SIGNAL
There is no doubt that 2020 has been a turbulent year for commercial shipping. The coronavirus pandemic has shaken the global maritime transport. T ...
Tuesday, 29 December 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.66 PCT - XINHUA
China Taiyuan coal transaction price index stood at 134.78 points Monday, up 0.66 percent week on week.
The index, released by China ...
Tuesday, 29 December 20
CORROSION-RESISTANT STEELS FOR CARGO OIL TANKS - DNV GL
KNOWLEDGE TO ELEVATE
Crude oil is a complex mixture of substances at varying ratios and in most cases contains at least some salt water. ...
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- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Australian Coal Association
- Meralco Power Generation, Philippines
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- The University of Queensland
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
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