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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, 31 March 20
COAL POWER REMAINS IN GLOBAL DECLINE, DESPITE CHINESE SURGE - SYDNEY MORNING HERALD
The impact of coronavirus has prompted a surge in coal-fired power plant construction permits in China, with the Chinese government issuing more pe ...
Monday, 30 March 20
CORONAVIRUS - IMPLICATIONS FOR SHIPS AND CREW - GARD
KNOWLEDGE TO ELEVATE
Countries around the world are strengthening their border control measures in order to prevent the further spread of COVI ...
Monday, 30 March 20
LAY-UP AND RE-ACTIVATION REVISITED - GARD
KNOWLEDGE TO ELEVATE
The COVID-19 pandemic has affected the maritime industry in previously unthinkable ways. Ports around the world are denyi ...
Monday, 30 March 20
PANAMAX: INDONESIA LACKED VOLUME, PARTLY DUE TO FORCE MAJEURE IN INDIAN PORTS - BALTIC BRIEFING
Capesize
As Covid-19 continued to ratchet up tensions across the globe, the Cape market dealt with the change to remote working. Most regions o ...
Saturday, 28 March 20
ASIA'S COAL MARKETS DIVERGE ON QUALITY LINES AS CORONAVIRUS HITS INDIA - REUTERS
Asia’s seaborne coal market is increasingly diverging between higher-quality Australian coal, where prices are holding up despite the economi ...
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- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- The University of Queensland
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- ASAPP Information Group - India
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
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