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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, 18 May 20
THERMAL COAL SPOT PRICE TUMBLES 25 PER CENT, PUTTING PRESSURE ON SOME PRODUCERS - ABC RURAL
The spot price for thermal coal has fallen 25 per cent per cent in the past month with one leading analyst saying it is because of a reduction in d ...
Monday, 18 May 20
CHINA'S COAL OUTPUT UP 1.3 PCT IN JANUARY-APRIL: XINHUA
Output of raw coal in China rose 1.3 percent year on year to 1.15 billion tonnes in the first four months this year, official data showed.
&nbs ...
Sunday, 17 May 20
A 55,000 OPEN ILIGAN FIXING AT $6,500 VIA INDONESIA REDELIVERY INDIA - BALTIC BRIEFING
Capesize
A precipitous fall in the market this week had the Capesize 5TC shedding over 50 per cent in value. A small rebound at the end of the ...
Friday, 15 May 20
CHINA'S COAL CONSUMPTION TO FALL Y/Y IN SECOND QUARTER, IMPROVEMENT EXPECTED IN SECOND HALF - INDUSTRY BODY: REUTERS
China’s coal consumption is expected to decline in the second quarter from a year earlier, but will see an improvement in the second half of ...
Thursday, 14 May 20
OPEC REVISES DOWN GLOBAL OIL DEMAND FORECAST AGAIN
Crude Oil Price Movements
Crude oil prices recorded a second sharp monthly drop in April, amid an increasing oil surplus in the spot market. Th ...
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- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- The University of Queensland
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
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