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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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Friday, 20 November 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 ...
Thursday, 19 November 20
MARKET INSIGHT - INTERMODAL
As we are moving towards the end of the year, the overall deal landscape of the dry bulk sector corresponding to the second half of 2020 (up to dat ...
Tuesday, 17 November 20
COAL SQUEEZE INTENSIFIES - BALTIC EXCHANGE
The message from the top is clear: cut out coal. While the regulatory pressure has been evident for some time, the race to banish the black stuff s ...
Tuesday, 17 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.35 PCT - XINHUA
China Taiyuan coal transaction price index stood at 128.72 points Monday, up 0.35 percent week on week.
The index, released by China ...
Tuesday, 17 November 20
AUSTRALIAN COAL EXPORTS TO CHINA SLUMP, BUT PRICES ARE MIXED - REUTERS
China’s unofficial ban on coal imports from Australia is starting to take its toll on volumes, with departing cargoes down sharply so far in ...
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- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- PTC India Limited - India
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Agrawal Coal Company - India
- Parliament of New Zealand
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- The University of Queensland
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
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