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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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Friday, 29 May 20
DRY BULK SHIPPING: NO QUICK RECOVERY FOR THE DRY BULK MARKET AS COVID-19 DIGS DEEPER
The outlook is poor for dry bulk, as the negative demand shock and overcapacity come together to send rates to multi-year lows, even a return to wo ...
Thursday, 28 May 20
COVID-19: A FORCE MAJEURE EVENT? - KYPRIANOU
KNOWLEDGE TO ELEVATE
While seeing the unexpected COVID-19 outbreak expanding worldwide and the first cases being identified in Cyprus, the com ...
Thursday, 28 May 20
OIL DEMAND RECOVERED BY 20% IN MAY AGAINST APRIL: RUSSIAN ENERGY MINISTER - TASS
Oil demand remains at a low level but the demand in May increased by 20% against April, Russian Energy Minister Alexander Novak said, cited by the ...
Thursday, 28 May 20
MARKET INSIGHT - INTERMODAL
Earlier in May, China’s top leaders convened for the annual National People's Congress, following over two months of delays due to the co ...
Wednesday, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
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- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Deloitte Consulting - India
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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