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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, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
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- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- MS Steel International - UAE
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
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