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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, 24 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.28 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.74 points Monday, down 0.28 percent week on week.
The index, released by Chi ...
Monday, 23 March 20
CHARTERPARTY REQUIREMENTS TO NOTIFY CLAIMS - TAKE CARE! - WFW
KNOWLEDGE TO ELEVATE
Voyage charterparties frequently require the owner to notify any claim with supporting documents within a relatively shor ...
Monday, 23 March 20
COAL INDIA LIMITED'S ONE-DAY OUTPUT PEAKS AT 3.17 MT - THE HINDU
Coal India Limited (CIL) output peaked at a new high of 3.17 million tonnes (MT) on March 20, overtaking the 3.14 MT production recorded on March 2 ...
Monday, 23 March 20
KOMIPO INVITED BIDS FOR 1.45 MILLION TONS OF COAL FOR JUNE & JULY 2020 LOADING
COALspot.com: Korea Midland Power Co.,Ltd (KOMIPO), on behalf of five Korean Gencos, has issued an international tender for total 1,450,000 MT (&pl ...
Saturday, 21 March 20
PANAMAX: 82,000DWT SHIP AGREED $4,250 FOR A COAL TRIP VIA INDONESIA REDELIVERY SOUTH CHINA - BALTIC BRIEFING
Capesize
The Capesize market made some headway this past week despite being buffeted by the global pandemic storm. With the market in a constan ...
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- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- The University of Queensland
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Planning Commission, India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Videocon Industries ltd - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
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