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