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