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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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Saturday, 25 April 20
KOREA SOUTH-EAST POWER CO. INVITED BIDS FOR 780K - 900K MT OF 5600 NCV COAL FOR JULY TO OCTOBER 2020 LOADING
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 780,000~900,000 Metric Tons (MT) s ...
Saturday, 25 April 20
SEAFARER MENTAL WELLBEING DURING THE COVID-19 PANDEMIC - STANDARD CLUB
KNOWLEDGE TO ELEVATE
COVID-19 has forced many parts of the world to enforce a lockdown in a bid to flatten the curve in terms of transmissions ...
Friday, 24 April 20
KOMIPO INVITED BIDS FOR 5700 NAR COAL FOR JUNE & JULY LOADING
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) Has Issued An International Tender For 260,000 Metric Tons (MT) Steam Coal ...
Friday, 24 April 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 24 April 20
COAL INDIA TO PRODUCE 710 MT COAL - MINISTER OF COAL AND MINES
Coal India Limited (CIL) will produce 710 million tonnes (MT) of coal and company’s coal off take target will also remain at710 MT for this f ...
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- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
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