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