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