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