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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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Sunday, 14 June 20
INDONESIAN COAL WAS STILL IN DEMAND; A 52,000-DWT SUPRAMAX FIXING DELIVERY CJK FOR A ROUND VOYAGE VIA INDONESIA AT $6,250 - BALTIC BRIEFING
Capesize
The Capesize market made new highs for the year this week after strong iron ore demand to the far east continued to develop in the mar ...
Friday, 12 June 20
CHINA CURBS COAL IMPORTS AFTER 5 MONTHS OF RECORD INFLOWS - SOURCES: REUTERS
China has stepped up customs checks for coal imports, leading to lengthy processing delays at ports, four sources familiar with the matter said, as ...
Friday, 12 June 20
COAL INDIA LIMITED SET FOR MARKETING DRIVE TO CREATE DEMAND - FINANCIAL EXPRESS
State-run miner Coal India (CIL), which is primarily focused on supplying coal to the power sector, is now reorienting its marketing to create dema ...
Friday, 12 June 20
MOODY'S REVISES BRENT OIL PRICE OUTLOOK TO $35/BARREL IN 2020 - TASS
Low oil prices are likely to exert the highest pressure on Iraq, Oman and Kuwait due to the limited space for the fiscal policy pursuit and higher ...
Thursday, 11 June 20
JAN-MAY, INDONESIA SHIPPED 175.15 MILLION TONS OF COAL TO ITS OVERSEAS BUYERS
Indonesia's coal production for the first 5 months of this year have reached 228 million tons. January – May 2020, Indonesia shipped US$ ...
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- Madhucon Powers Ltd - India
- Planning Commission, India
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- PTC India Limited - India
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
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