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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, 22 November 23
OBLIGATION. INDONESIA AIMS TO START COLLECTING LEVIES FROM COAL MINERS IN JANUARY - REUTERS
Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower ...
Tuesday, 21 November 23
INDIAN COAL POWER PLANTS’ CAPACITY UTILISATION WILL IMPROVE TO 65% THIS FISCAL: - CRISIL
Coal-based thermal power units’ plant load factor (PLF) or capacity utilisation will improve to 65 percent in the current fiscal year despite ...
Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime ...
Tuesday, 14 November 23
COAL INDIA BEATS Q2 PROFIT VIEW ON HIGH POWER DEMAND AMID WEAK MONSOON - REUTERS
Coal India on Friday reported better-than-expected second-quarter profit, helped by high power demand and boosted production amid a weak monsoon.
...
Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
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- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Planning Commission, India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Marubeni Corporation - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
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