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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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Friday, 13 March 20
TOP 4 ACCOUNTING CONSIDERATIONS AFTER THE IMPLEMENTATION OF IMO 2020 - PWC
To install or not to install?
Following the IMO 2020 global low sulphur cap for marine fuel effective since 1 January 2020, many shi ...
Friday, 13 March 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Friday, 13 March 20
KOREA SOUTH-EAST POWER INVITED BIDS FOR 390,000 MT OF THERMAL COAL FOR MAY-JUNE 2020 LOADING
COALspot.com: Korea South-East Power Co., Ltd. (KOEN), has issued an international tender for total 390,000 Metric Tons of coal for May & June ...
Thursday, 12 March 20
INDIA 2019 THERMAL COAL IMPORTS RISE 12.6% TO NEARLY 200 MILLION TONNES - REUTERS
India’s thermal coal imports rose 12.6% to nearly 200 million tonnes in 2019, government data reviewed by Reuters showed, reflecting the seco ...
Wednesday, 11 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.07 PCT - XINHUA
China Taiyuan coal transaction price index stood at 133.16 points Monday, up 0.07 percent week on week.
The index, released by China ...
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- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Interocean Group of Companies - India
- The University of Queensland
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
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