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