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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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Monday, 24 August 20
A COMBINATION OF DEVELOPMENTS DROVE THE FALLOFF COAL PRICES - CHIEF ECONOMIST’ OFFICE, AUSTRALIA
China, rising domestic production combined with subdued power demand;
India, a lockdown coupled with government directives that fav ...
Monday, 24 August 20
AUSTRALIA'S THERMAL COAL EXPORTS ARE FORECAST TO DROP FROM AN ESTIMATED $20 BILLION IN 2019-20 TO $16 BILLION IN 2020-21: REPORT
Thermal coal spot prices have fallen sharply as the impact of COVID-19 drives a contraction in seaborne trade for only the second time this century ...
Saturday, 22 August 20
REPORT SEES INDIA’S RELIANCE ON THERMAL POWER DROPPING TO 50% IN 2021, 43% IN 2026 - ET ENERGY | IEEFA
India’s dependence on thermal power will reduce to 50 per cent by 2021-22 and 43 per cent by 2026-27 on the back of renewable energy (RE) cap ...
Friday, 21 August 20
323 MILLION ELECTRIC VEHICLES WILL BE ON THE ROADS BY 2040 - WOOD MACKENZIE
Electric vehicle (EV) sales are expected to reach 45 million units per year by 2040, with a total global EV stock of 323 million, according to new ...
Friday, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
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- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- ASAPP Information Group - India
- Central Java Power - Indonesia
- White Energy Company Limited
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
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