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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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Wednesday, 19 August 20
MISC MARKS ITS MAIDEN FORAY INTO MAJOR DEEP-WATER PROJECT IN LATIN AMERICA WITH MERO 3 FPSO
MISC Berhad (MISC) is pleased to announce its acceptance of Letter of Intent (LOI) from Petróleo Brasileiro S.A. (Petrobras) for the provisi ...
Wednesday, 19 August 20
MARKET INSIGHT - GEORGE LAIOS | INTERMODAL
Since the Covid-19 outbreak, governments and central banks around the globe have been using their ammunition and stimulus packages to keep their ec ...
Wednesday, 19 August 20
INDIA SAW A SHARP DECLINE IN ENERGY COAL IMPORTS IN JANUARY - JUNE 2020; –27 PER CENT YOY - BHP
Energy coal prices were weak in the second half of financial year 2020, BHP says in its Economic and Commodity Outlook FY20.
Accordi ...
Wednesday, 19 August 20
COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
Coal offtake is improving gradually as lockdown eases
Coal prices are expected to remain subdued to weak demand and high inventory l ...
Tuesday, 18 August 20
BLACKBALLED: WILL COAL BOUNCE BACK FROM SLUMP OR IS IT TERMINAL? - SYDNEY MORNING HERALD
Even by the standards of this miserable year, 2020 has been a shocker for the global coal industry.
As the lockdown kicked in demand ...
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- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
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