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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, 21 October 20
MARKET INSIGHT - INTERMODAL
The second wave of COVID-19 is now a reality; offices are closing again, and stricter rules and regulations are being implemented in public spaces. ...
Tuesday, 20 October 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.82 PCT - XINHUA
China Taiyuan coal transaction price index stood at 127.49 points Monday, up 0.82 percent week on week.
The index, released by China ...
Tuesday, 20 October 20
BIMCO 'SHIPLEASE' TERM SHEET - WATSON FARLEY & WILLIAMS
KNOWLEDGE TO ELEVATE
The ever-growing importance of sale and leaseback transactions as an alternative to financing ships by way of loan, makes ...
Friday, 16 October 20
KOMIPO ON BEHALF OF K GENCO'S INVITED BIDS FOR TOTAL 715,000 MT MIN. 5,700 NAR COAL FOR DECEMBER
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 715,000& ...
Wednesday, 14 October 20
CHINA COKING COAL FUTURES RALLY ON REPORTED BAN ON AUSTRALIA CARGOES - REUTERS
Dalian coking coal futures rallied for a sixth straight session on Tuesday after reports surfaced that China had stopped buying coal from Australia ...
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- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Australian Coal Association
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
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