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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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Thursday, 24 September 20
SUPRAMAX: INDO TO INDIA FIXING AROUND US$13,000 - FEARNLEYS
Cape
Over the last week the iron ore segment from Brazil to China has picked up, and we see freight rates up USD 2 (12%) week on week Fearnleys ...
Thursday, 24 September 20
KOREA MIDLAND POWER TO BUY 1.92 MILLION TONS OF 4,300-4,700 NCV COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 640,000 MT 4,300-4,700 kcal/kg NCV coal per year.
...
Wednesday, 23 September 20
VIETNAM'S NEW POWER DEVELOPMENT PLAN MUST OPTIMIZE RENEWABLES AND AVOID FOSSIL FUEL LOCK-IN: IEEFA
EVN’s financial constraints leaves the utility with little room for error
Implementing Vietnam’s soon-to-be-launched next Power De ...
Wednesday, 23 September 20
MARKET INSIGHT - INTERMODAL
Undoubtedly, this year (ongoing) will never be forgotten because in a matter of months it has managed to severely affect and shape our day to day p ...
Friday, 18 September 20
INDIA'S COAL-FIRED POWER OUTPUT PICKS UP AS INDUSTRIAL USE RISES - REUTERS
India’s coal-fired electricity generation rose 9.4% in the first half of September, provisional government data showed, as demand from indust ...
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- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Planning Commission, India
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
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