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