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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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Wednesday, 25 November 20
CHINA KICKS AN OWN GOAL WITH AUSTRALIAN COAL - FORBES
China’s annoyance at Australia’s hardline stance on political interference and demands for an independent inquiry into the root cause o ...
Wednesday, 25 November 20
MINISTER - INDONESIA JAN-OCT COAL OUTPUT AT 459 MILLION TONNES - REUTERS
Indonesia coal output in the January to October period was 459 million tonnes, the country’s energy minister told parliament on Monday.
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Wednesday, 25 November 20
INDIA: MORE STEPS NEEDED TO MAKE COMMERCIAL COAL MINING ATTRACTIVE TO GLOBAL PLAYERS - LIVEMINT
India concluded its first commercial coal mine auctions earlier this month. A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odish ...
Wednesday, 25 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.38 PCT - XINHUA
China Taiyuan coal transaction price index stood at 129.21 points Monday, up 0.38 percent week on week.
The index, released by China ...
Wednesday, 25 November 20
MARKET INSIGHT - INTERMODAL
Over 90% of the world’s goods are transported by sea. LPG is a clean, energy efficient and portable fuel that is being marketed at an afforda ...
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- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
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