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