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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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Thursday, 14 May 20
NEW COVID-19 GUIDELINES FOCUS ON SAFE INTERFACE BETWEEN SHIP AND SHORE STAFF - GARD
At a time when the COVID-19 pandemic is affecting the global population, it is important that ships’ crew and port workers protect each other ...
Wednesday, 13 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.4 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.93 points Monday, down 0.4 percent week on week.
The index, released by Chin ...
Tuesday, 12 May 20
IN THE FIRST 4 MONTHS OF 2020, SOUTH KOREA IMPORTED 46.6 MLN TONNES OF CRUDE OIL BY SEA, A NET DECLINE OF 14.1% YOY - BC
South Korea is certainly one of the countries which has handled better the current Covid-19 crisis. In the first week of May 2020, new cases of ...
Tuesday, 12 May 20
OIL MARKET TURBULENCE PIVOTS FOCUS ON FLOATING STORAGE TECHNICAL NEEDS - LLOYD'S REGISTER
KNOWLEDGE TO ELEVATE
Negative oil prices and off-the-scale volatility in crude markets are positive for floating storage, as the next chapter ...
Tuesday, 12 May 20
A GLOBAL ECONOMIC RESTART HAS SLOWLY BEGUN AS COUNTRIES AROUND THE WORLD GRADUALLY - ALLIED
A global economic restart has slowly begun as countries around the world gradually set their return back to “normality”. Yet by all mea ...
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- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Australian Coal Association
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
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