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