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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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Saturday, 06 June 20
KOREA SOUTH-EAST POWER CO INVITED COAL BIDS FOR MIN 5600 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 270,000 Tons (MT) min. 5600 NCV co ...
Friday, 05 June 20
COAL INDIA ESTIMATES PRODUCTION GROWTH BY OVERBURDEN REMOVAL - FINANCIAL EXPRESS
PSU miner Coal India (CIL) has now limited mining only to Overburden Removal (OBR) with falling demand of coal. The mining behemoth is now keeping ...
Friday, 05 June 20
U.S. SANCTIONS COMPLIANCE GUIDANCE RELEASED FOR THE GLOBAL MARITIME, ENERGY AND METALS SECTORS - AKIN GUMP
Key Points
On May 14, 2020, OFAC, the Department of State and the U.S. Coast Guard jointly released guidance for persons involved in the ma ...
Friday, 05 June 20
IN THE FIRST 5 MONTHS OF 2020 AUSTRALIA SHIPPED 6.8 MLN TONNES TO VIETNAM - BANCHERO COSTA
In the first 5 months of 2020, global seaborne coal trade declined by as much as -8% year-on-year, according to vessel tracking data from Ref ...
Thursday, 04 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- PTC India Limited - India
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
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