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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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Wednesday, 01 April 20
TRADERS SCRAMBLE TO SELL CHEAP CRUDE CARGOES AS GLUT GROWS - REUTERS
Oil traders across the globe are offering cargoes far in advance as rapidly vanishing demand drives key physical crude prices to multi-decade lows, ...
Wednesday, 01 April 20
MARKET INSIGHT - INTERMODAL
There is an old, allegedly Chinese, saying suggesting that living in “interesting” times usually refers to times of trouble. The latest ...
Tuesday, 31 March 20
FREIGHT MARKET: DRY BULKERS - SPOT MARKET 23-29 MARCH 2020
Capesize
The rebound in freight rates resumed this past week, with rates man-aging to post further gains by week’s end. The BCI is in negat ...
Tuesday, 31 March 20
DRY BULK: Q1 HAS BEEN THE WORST QUARTER NOTED FOR MORE THAN 3 YEARS NOW - ALLIED RESEARCH
At this point, the Covid-19 pandemic seems to be monopolizing all market (as well as all other) discussions across the world and any market insight ...
Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
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- Electricity Generating Authority of Thailand
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- White Energy Company Limited
- Dalmia Cement Bharat India
- Planning Commission, India
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
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