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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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Tuesday, 08 December 20
PANAMAX: THE OVERALL MARKET SEEMS TO BE UNDER NEGATIVE PRESSURE - ALLIED
Capesize
A rather indifferent week for the Capesize market, with BCI 5TC figure finishing the week with slight losses of 0.8%. The Atlantic enj ...
Friday, 04 December 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 04 December 20
THE INDONESIA COAL PRICE REFERENCE REACHES THREE MONTH HIGH ON IMPROVING DEMAND OUTLOOK
COALspot.com: The Indonesia Coal Price Reference reaches three month high on improving demand outlook . The Indonesia Coal Price Reference rose by& ...
Wednesday, 02 December 20
GLOBAL MINING SECTOR OUTLOOK STABLE DUE TO CHINA'S RECOVERY - FITCH RATINGS
China’s post-pandemic economic recovery and sizeable infrastructure-focused government stimulus boosted global metals and mining prices, help ...
Wednesday, 02 December 20
INDONESIA CONSIDERING CLOSING 3,400MW SURALAYA COAL PLANT - THE JAKARTA POST
The government is considering to shut down the aging Suralaya coal-fired power plant (PLTU) in Cilegon, Banten, and replace it with green energy, a ...
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- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Parliament of New Zealand
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- The University of Queensland
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
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