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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, 17 March 20
IT IS NOW UNQUESTIONABLE THAT 2020 WILL BE A MILESTONE YEAR FOR THE OIL MARKET, AS WELL AS THE WHOLE GLOBAL ECONOMY - ALLIED
It is now unquestionable that 2020 will be a milestone year for the oil market, as well as the whole global economy. The impact from the COVID-19 o ...
Tuesday, 17 March 20
PRELIMINARY FIELD EXPERIENCES ON THE EFFECTS OF LSFO AND VLSFO ON CYLINDER CONDITION - HANS JENSEN LUBRICATORS
It is now more than two months since the 0.5% sulphur cap entered into force, which have affected the operation of more than 70,000 vessels. As ant ...
Monday, 16 March 20
ULTRAMAX: S8 INDONESIA-INDIA AND S10 INDONESIA-CHINA ROUTES BOTH POSTED GAINS OF $1,412, AND $1,289 ON THE WEEK, TO CLOSE AT $5,575, AND $6,089 RESPECTIVELY - BALTIC BRIEFING
Capesize
The Capesize market came to work on Monday, with little expectation, or confidence, that the days ahead were going to bring anything o ...
Sunday, 15 March 20
CAPTIVE COAL OUTPUT RISES 19% IN APRIL-FEBRUARY - FINANCIAL EXPRESS
Coal production from captive mines in the first eleven months of the ongoing fiscal have increased by 18.8% year-on-year (y-o-y) to 51.7 million to ...
Friday, 13 March 20
PANAMAX: SLIGHTLY STRONGER NUMBERS IN BOTH BASINS THIS WEEK - FEARNLEYS
Cape
Still very sad times for the big ships, and merit in further trading at present levels is highly debatable for most tonnage. Spot fixtures ...
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- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- The University of Queensland
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Aditya Birla Group - India
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- London Commodity Brokers - England
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