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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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Monday, 09 March 20
OPEC+ 'NO DEAL' A BLOW TO THE MARKET - WOOD MACKENZIE
Speaking after today’s OPEC+ meeting broke up, Ann-Louise Hittle, vice president, Macro Oils, at Wood Mackenzie, said: “Today’s o ...
Monday, 09 March 20
KOREA EAST-WEST POWER INVITED BIDS FOR 150,000 MT OF MIN 4,400 - MAX 5,499 NAR COAL
COALspot.com: KOREA EAST-WEST POWER CO. LTD. of South Korea has issued an international tender for total 150,000 MT of LCV coal for May – Jun ...
Sunday, 08 March 20
SUPRAMAX: A 55,000DWT VESSEL FIXING DELIVERY FROM EAST KALIMANTAN FOR A TRIP TO VIETNAM AT $9,100 - BALTIC BRIEFING
SUPRAMAX/ULTRAMAX - A 56,000DWT VESSEL FIXED DELIVERY SOUTH CHINA TRIP VIA INDONESIA, REDELIVERY EAST COAST INDIA, IN THE $6,000S
SUPRAMAX/U ...
Friday, 06 March 20
CHINA RESUMES 83.4 PCT COAL PRODUCTION CAPACITY AMID EPIDEMIC - XINHUA
China has resumed 83.4 percent of its coal production capacity amid the fight against the novel coronavirus outbreak, the National Energy Administr ...
Friday, 06 March 20
COLOMBIAN COAL OUTPUT FELL 2% IN 2019 - REUTERS
Coal production in Colombia, the fifth-largest coal exporter in the world, fell 2% to 82.2 million tonnes in 2019 after output at one of the princi ...
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- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Australian Coal Association
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- VISA Power Limited - India
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
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