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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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Friday, 19 June 20
INDIA'S COAL CONSUMPTION GROWTH IN 2019 SLOWEST SINCE 2001: BP STATS REVIEW - HINDU BUSINESS LINE
Growth in global energy markets slowed in 2019 in line with weaker economic growth, according to the bp Statistical Review of World Energy 2020. Th ...
Friday, 19 June 20
KOWEPO TO IMPORT 1,050,000 MT OF MIN 5300 NCV COAL FOR THREE YEARS
COALspot.com: Korera Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1,050k MT Min.5,300 kcal/kg NCV coal for t ...
Thursday, 18 June 20
INDIA: GOVT'S PLAN TO CUT COAL IMPORT GOES FOR A TOSS AS FY20 BREAKS LOGISTICS CHAIN; LOCAL OUTPUT STAGNANT - FINANCIAL EXPRESS
Weak logistics support and disrupted supply chain towards the end of the last financial year 2019-20 hit the government’s plan to cut coal im ...
Thursday, 18 June 20
INDIA: THERMAL PLANTS TO OPERATE BELOW 53% CAPACITY IN FY21 AS POWER DEMAND DIPS - BUSINESS STANDARD
The Plant Load Factor (PLF) of thermal power stations across the country is projected to dip below 53 per cent in this fiscal. Muted power demand f ...
Wednesday, 17 June 20
MARKET INSIGHT - INTERMODAL
After experiencing record earnings during the first half of the year, the focus of headlines concerning the tanker market has shifted from the deve ...
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- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Australian Coal Association
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
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