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