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