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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$1.7¢/kWh more.
Solar and wind are now the lowest-cost energy sources globally and are expected to become even cheaper by 2030. Notably, maintaining coal-fired power plants is more expensive than constructing entirely new, rapidly built renewable energy plants.
Consequently, the gradual retirement of coal-fired power plants and a concerted transition to renewable energy sources will be a win-win solution for Indonesia to fulfill its Paris Agreement commitments and financial goals.
Mutya Yustika, IEEFA
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Tuesday, 09 June 20
INDIA: COAL IMPORT DROPS BY 20% TO NEARLY 19 MILLION TONNES IN MAY, SAYS REPORT - HINDUSTAN TIMES
The country’s coal import dropped by 20 per cent to 18.93 million tonnes (MT) last month, industry data showed.
The government ...
Monday, 08 June 20
WOOD MACKENZIE: THE INDISPENSABLE OPEC+
Rumours of “the death of OPEC” have been circulating for almost as long as the organisation has existed. Just three years after the car ...
Monday, 08 June 20
CHINA'S COAL IMPORTS FALL NEARLY 20% IN MAY EVEN AS DEMAND RISES - REUTERS
China’s coal imports in May fell nearly 20% compared with a year earlier even as demand recovered at power plants and industrial users, custo ...
Monday, 08 June 20
JUNE 2020 INDONESIAN COAL PRICE REFERENCE HIT US$ 52.98 A TON, ITS LOWEST LEVEL SINCE AT LEAST AUGUST 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Sunday, 07 June 20
A SCRUBBER FITTED 61,000 ULTRAMAX WAS FIXED DELIVERY PHILIPPINES TRIP VIA SOUTH AFRICA REDELIVERY VIETNAM AT $9,500 - BALTIC BRIEFING
Capesize
The small flicker of hope at the beginning of this week has kindled a small fire under the Capesize market. At a paltry $3369 from the ...
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- London Commodity Brokers - England
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
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