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