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