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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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Friday, 14 August 20
EIA: COAL PLANTS UNECONOMICAL IN MOST REGIONS - IEEFA
U.S. coal power generation plunged by 30 percent in the first half of 2020 off an already-depressed base, shoved out by natural gas and renewables ...
Thursday, 13 August 20
INDIA SHOULD RECORD A SLIGHT DECREASE IN THERMAL COAL IMPORTS, REACHING A VOLUME OF 167 MILLION TONS BY THE END OF 2020 - ASSOCARBONI
Regarding 2020 thermal coal imports forecasts, Vietnam’s coal imports showed a very strong growth in the first half of 2020 and it is believe ...
Thursday, 13 August 20
INDONESIA REMAINS THE LARGEST EXPORTER OF COAL IN THE WORLD - ASSOCARBONI
According to the last Assocarboni data for 2019, Indonesia remains the largest exporter in the world. Thermal coal exports have in fact reached 456 ...
Wednesday, 12 August 20
VIETNAM WAS THE PROTAGONIST OF A SIGNIFICANT INCREASE IN COAL IMPORTS IN 2019 - ASSOCARBONI
The latest Assocarboni data for 2019 also provide a detailed picture on the trend of the global coal import.
According to Assocarbon ...
Wednesday, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
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- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- PTC India Limited - India
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Bhatia International Limited - India
- London Commodity Brokers - England
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
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