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