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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, 06 July 20
INDONESIAN COAL PRICE REFERENCE IN FREE FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 06 July 20
SUPRAMAX: A 58,000-DWT FIXING DELIVERY VIETNAM TRIP VIA INDONESIA RE-DELIVERY WEST INDIA IN THE LOW $4,000S
Capesize
The Capesize market continues to go from strength to strength, as rates reach highs not seen since September last year. The rally is p ...
Thursday, 02 July 20
PRIVATE COAL MINING MAY SEE WEAK INVESTOR SENTIMENT: ICRA - LIVEMINT
The prospects of commercial coal mining in India may be dimmer than initially expected because of the expected shift in India’s energy mix fr ...
Wednesday, 01 July 20
THERMAL COAL OPTIONS TRADING LAUNCHED IN CHINA'S ZHENGZHOU - XINHUA
Thermal coal options started trading on the Zhengzhou Commodity Exchange (ZCE) in central China’s Henan Province Tuesday.
It i ...
Wednesday, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
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- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Planning Commission, India
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- White Energy Company Limited
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
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