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