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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, 04 May 20
U.S. ESTIMATED COAL PRODUCTION FALL 39.4% YEAR ON YEAR IN THE WEEK ENDED APRIL 25 - EIA
Estimated U.S. coal production totaled about 8.6 million short tons (MMst) For the week ended April 25, 2020, says EIA in its latest report.
E ...
Saturday, 02 May 20
SUPRAMAX: ASIA, STRONGER NUMBERS - A 55.000-DWT WAS FIXED FROM INDONESIA TO CHINA IN THE MID $6,000S - BALTIC BRIEFING
Capesize
A tepid week for the big ships, as macro concerns continued to weigh heavily on the index. All of the major voyage routes lost value, ...
Friday, 01 May 20
KOSPO INVITED OFFER FOR 5600 NCV COAL FOR Q3 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 260,000 Metric Tons (MT) steam coal for Boryeong Power ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY ABOUT 8% IN 2020,THE LARGEST DROP SINCE WORLD WAR II - IEA
We expect global coal demand to fall by about 8% in 2020, the largest drop since World War II, with coal use declining in virtually every sector of ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY 8% IN Q1 2020 RELATIVE TO Q1 2019 - IEA
We expect global coal demand to fall by 8% in Q1 2020 relative to Q1 2019. This significant drop was driven by lower demand in the electricity sect ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- CNBM International Corporation - China
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Central Electricity Authority - India
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
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