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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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Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
Saturday, 25 March 23
COAL INDIA HAS STRONG CASE TO INCREASE PRICES, TALKS ON: CMD AGRAWAL - BUSINESS STANDARD
Coal India (CIL) Chairman and Managing Director Pramod Agrawal said on Monday there is a “strong case” for increasing coal prices, and ...
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- Planning Commission, India
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Australian Coal Association
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
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