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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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Tuesday, 07 April 20
COAL INDIA'S DISPATCHES DROP, OUTPUT INCREASES - THE HINDU
India’s largest coal producer Coal India Ltd. (CIL) has seen a 10% fall in dispatches in March 2020 due to a sharp fall in demand from the po ...
Tuesday, 07 April 20
CORONAVIRUS AND LOCKDOWNS DRAG DOWN THE INDONESIAN COAL PRICE REFERENCE IN APRIL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of the Indonesian ther ...
Monday, 06 April 20
A 52,000DWT SHIP FIXING DELIVERY SINGAPORE TRIP, VIA INDONESIA, REDELIVERY TAIWAN, AT $3,100 - BALTIC BRIEFING
Capesize
The Capesize market this past week looks to have come off life support and found some improved sentiment. The week began rather ordina ...
Monday, 06 April 20
INDIA'S 21-DAY LOCKDOWN - IMPACT ON COMMODITIES? - WOOD MACKENZIE
India is under a three-week lockdown from 25 March, to contain the spread of the coronavirus outbreak. Wood Mackenzie analysts discuss what this me ...
Friday, 03 April 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
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- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
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