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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, 07 May 20
UKRAINE PRODUCES 2.5 MLN TONNES OF COAL IN APRIL - UKRINFORM
Ukraine produced 2.5 million tonnes of coal in April 2020, which is 39% less than planned, according to the Coal Miners Union of Ukraine.
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Thursday, 07 May 20
INDIA: GOVT TO DO AWAY WITH MANDATORY WASHING OF COAL FOR THERMAL POWER UNITS - BUSINESS STANDARD
The Centre is planning to do away with the mandatory requirement of washing of coal before it is transported to thermal power stations. The Ministr ...
Thursday, 07 May 20
CIL'S SUPPLY TO POWER SECTOR FALLS IN MARCH AMID SLUMP IN COAL DEMAND - PTI
The supply of coal to the power sector by state-owned CIL registered a decline of eight per cent to 42.30 million tonne in March in the wake of slu ...
Thursday, 07 May 20
COAL PRICE REFERENCE FALL SHARPLY IN MAY 2020 DUE TO CORONAVIRUS OUTBREAK
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 May 20
KOSPO INVITED COAL BIDS FOR LOW CALORIFIC VALUE COAL
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 160,000 Metric Tons (MT) Low Calorific Value Coal for J ...
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- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Planning Commission, India
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- The University of Queensland
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
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