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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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Monday, 20 July 20
OIL PRICE OF $40-43 PER BARREL MORE OR LESS BALANCED - NOVAK | TASS
The Russian Ministry of Energy considers the current oil price of $40-43 per barrel more or less balanced and does not expect price changes after t ...
Monday, 20 July 20
SUPRAMAX: A 63,000 OPEN NORTH CHINA FIXING AN AUSTRALIAN ROUND IN THE LOW $10,000S - BALTIC BRIEFING
Capesize
The capesize market showed some resistance this week to recent losses as all routes saw a small uptick in value to end the week. With ...
Friday, 17 July 20
MISC MALAYSIA ENTERS INTO PURCHASE AGREEMENTS AND TIME CHARTER PARTIES FOR SIX VLECS
MISC Berhad (MISC) has entered into Memorandum of Agreements (MOAs) with six indirect wholly-owned subsidiaries of Zhejiang Satellite Petrochem ...
Wednesday, 15 July 20
HOW MEANINGFUL ARE SOME ESTIMATES FOR INDIA’S COAL CONSUMPTION DATA? - IEEFA
In recent years, BP's estimates for India have contained what appears to be a record of over-optimistic projections
BP’s a ...
Wednesday, 15 July 20
CHINA'S JUNE COAL IMPORTS FALL 6.7% Y/Y ON PORT CURBS - REUTERS
China’s coal imports dropped 6.7% in June from the same period last year, as stringent import restrictions at ports impeded purchases by trad ...
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- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- London Commodity Brokers - England
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- PTC India Limited - India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
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