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