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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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Tuesday, 04 August 20
KOEN INVITED BIDS FOR TOTAL 900K MT OF MIN 5600 NCV COAL FOR 3 YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 260,000 to 300,000 Tons (MT) min. ...
Tuesday, 04 August 20
THE WORLD’S FLEET OF COAL-FIRED POWER STATIONS HAS GOT SMALLER FOR THE FIRST TIME ON RECORD, WITH MORE CAPACITY RETIRED IN THE FIRST HALF OF 2020 THAN THE AMOUNT OPENED - IEA
This is according to the latest Global Coal Plant Tracker (GCPT) results by Global Energy Monitor (GEM), which we completed last month and report f ...
Monday, 03 August 20
U.S. COAL CONSUMPTION, WHICH HAS DECLINED SINCE ITS 2007 PEAK, FELL TO ITS LOWEST POINT IN APRIL 2020 - EIA
According to the U.S. Energy Information Administration’s (EIA) most recent Monthly Energy Review, the United States consumed 6.5 quadrillion ...
Monday, 03 August 20
LOW OIL PRICE AND CORONA VIRUS HIT SUB-SAHARAN AFRICA OIL PRODUCERS - FITCH RATINGS
The collapse in oil prices and the coronavirus shock is worsening the fiscal and external balances of sub-Saharan African oil producers, Fitch Rati ...
Saturday, 01 August 20
SHIP SHAPE - OUCH: FIS
Thursday afternoon saw a report that US GDP in Q2 shrank by 32.9%. Now this may have beaten expectations, but it’s a bit like saying that you ...
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- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- The University of Queensland
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
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