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