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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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Friday, 01 May 20
LUKOIL SHARES LUBRICANT EXPERIENCE AFTER FIRST 100 DAYS OF OPERATION ON VLSFO
KNOWLEDGE TO ELEVATE
After 100 days of VLSFO operation, LUKOIL Marine Lubricants is sharing recent experience on VLSFO operation with NAVIGO M ...
Wednesday, 29 April 20
OIL CLOSES IN ON PEAK OVERSUPPLY - WOOD MACKENZIE
Are we now deep in the abyss? Up to our necks in it, if the oil price is any guide. Brent has now tested sub-US$20/bbl in this downturn and WTI sub ...
Monday, 27 April 20
INCIDENT INVESTIGATION: SEARCH FOR THE CAUSE, NOT THE VILLAIN - GARD
Incident investigations often conclude with placing the blame for an incident on the crew. Causes of the incidents are usually identified as proced ...
Monday, 27 April 20
A 58,000DWT VESSEL WAS FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY WC INDIA, AT $4,500 - BALTIC BRIEFING
Capesize
The tide turned this week for the Capesize market, as voyage rates registered dramatically falling fuel costs. This was led primarily ...
Sunday, 26 April 20
STRONGER BUNKER PRICES FAIL TO RALLY FREIGHT MARKET - FIS
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some ...
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- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Parliament of New Zealand
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
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