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