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