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