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