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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, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
Wednesday, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
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- MS Steel International - UAE
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Australian Coal Association
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
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