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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, 24 April 20
CHINA COAL PRODUCER YANZHOU COAL POSTS 9.6 PCT RISE IN 2019 NET PROFIT - XINHUA
China’s major coal producer Yanzhou Coal Mining Co., Ltd. said Thursday that its net profit saw a 9.6 percent rise in 2019.
Th ...
Tuesday, 21 April 20
INDONESIA ACCOUNTS FOR 19% OF JAPAN'S TOTAL COAL IMPORTS - BANCHERO COSTA
Coal trade in Asia is proving remarkably resilient this year, despite the global economic impact from COVID-19.
We have seen China&r ...
Tuesday, 21 April 20
COVID-19: CHARTERPARTY MATTERS FOR SHIPOWNERS - SKULD
KNOWLEDGE TO ELEVATE
Whilst the plight of cruise ships, stranded off shore with sick passengers and crew, may be dominating media headlines, t ...
Monday, 20 April 20
SUPRAMAX: A 52,000DWT SHIP FIXING AN INDONESIA COAL RUN TO CHINA AT $4400 - BALTIC BRIEFING
Capesize
This week was the strongest period seen for the Capesize market in several months. All routes globally succumbed to improved sentiment ...
Friday, 17 April 20
PANDEMIC TO BRING ASIA'S 2020 GROWTH TO HALT FOR 1ST TIME IN 60 YEARS - IMF: REUTERS
Asia’s economic growth this year will grind to a halt for the first time in 60 years, as the coronavirus crisis takes an “unprecedented ...
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- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Australian Coal Association
- Planning Commission, India
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
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