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