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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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Monday, 25 May 20
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
Non-OPEC oil supply continued to increase by 2.0 mb/d in 2019, driven by US shale production, which rose by 1.7 mb/d, amounting to 84% of total non ...
Sunday, 24 May 20
A 63,000 FIXED DELIVERY VIETNAM TRIP VIA INDONESIA REDELIVERY KOSICHANG AT $8,500 - BALTIC BRIEFING
Capesize
After a week of bounce momentum the market appears to have stalled out once again. The Capesize 5TC has more than doubled since last F ...
Saturday, 23 May 20
COLOMBIA COAL OUTPUT DOWN 7.2% IN Q1 ON LOW PRICES, CORONAVIRUS LOCKDOWN - REUTERS
Coal production in Colombia, the world’s fifth-largest coal exporter, fell 7.2% in the first quarter because of low prices and coronavirus qu ...
Saturday, 23 May 20
EWP INVITES BIDS FOR 840,000 METRIC TONS OF MIN 5700 NAR COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd (EWP) has Issued an International Tender for total Max 840,000 Metric Tons of min 5 ...
Thursday, 21 May 20
KOMIPO INVITED BIDS FOR TOTAL 610000 MT OF LCV AND HCV COAL FOR 2H 2020
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) has Issued an International Tender for 130,000 mt of 5700 NCV coal an ...
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- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Planning Commission, India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
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