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