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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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Saturday, 29 August 20
COAL INDIA'S FUEL SUPPLY TO POWER SECTOR DROPS ABOUT 20% IN APR-JUL: PTI
State-owned Coal India”s fuel supply to the power sector registered a decline of 19.5 per cent to 126.30 million tonnes (MT) in the April-Jul ...
Saturday, 29 August 20
SOUTH KOREAN BROKERAGE FIRM KOREA INVESTMENT & SECURITIES TO STOP ALL COAL BUSINESS - KOREA HERALD
South Korean brokerage firm Korea Investment & Securities has decided to stop its investments in coal, in line with the Moon Jae-in administrat ...
Thursday, 27 August 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 985,000 TONS OF BITUMINOUS COAL FOR NOVEMBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 985,000 ...
Thursday, 27 August 20
SOUTHEAST ASIAN NATIONS SET REGION-WIDE RENEWABLE ENERGY GOAL OF 23 PERCENT BY 2025 - ASEAN POST
The Association of Southeast Asian Nations (ASEAN) has set an ambitious target of securing 23 percent of its primary energy from renewable so ...
Thursday, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
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- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Australian Coal Association
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
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