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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, 02 June 20
THE HISTORIC DECLINE OF US COAL - WOOD MACKENZIE
The first commercial power plant in the US was Thomas Edison’s coal-fired Pearl Street station in lower Manhattan, which started operating in ...
Tuesday, 02 June 20
COAL INDIA'S MAY SALES DRIVEN SHARPLY LOWER BY SLUMP IN POWER DEMAND - REUTER
Coal India’s sales fell 23.3% in May as utilities refrained from purchases amid record stockpiles and tepid demand because of a nationwide lo ...
Tuesday, 02 June 20
TUAH TURANGGA AGUNG RECORDED 4.54 MILLION TONS OF COAL SALES IN THE FIRST FOUR MONTHS OF 2020
PT United Tractors Tbk through its subsidiary, PT Tuah Turangga Agung recorded 4.54 million tons of coal sales in the first four months of 2020, up ...
Tuesday, 02 June 20
SOURING SINO-AUSTRALIA TRADE RELATIONS - BALTIC EXCHANGE
Cooling relations between the commodity powerhouses of China and Australia may point to trade troubles ahead when the world emerges from the Covid- ...
Tuesday, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
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- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- ICICI Bank Limited - India
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Eastern Energy - Thailand
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- The University of Queensland
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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