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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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Thursday, 30 January 20
CAPE: WITH CHINESE NEW YEAR TAKING PLACE, THE RATES ARE REACHING FURTHER DISAPPOINTING LEVELS - FEARNLEYS
Cape
With Chinese New Year taking place, the rates are reaching further disappointing levels. Present TC average is below USD 4,500, off 24% fr ...
Wednesday, 29 January 20
INDONESIA REMAINS AT THE TOP SPOT IN 2019 AS THE LARGEST SUPPLIER OF COAL TO INDIA WITH 91.3 MLN TONNES - BANCHERO COSTA
Despite repeated promises from India’s government to reduce the country’s coal imports and increase domestic self-reliance, volumes jus ...
Wednesday, 29 January 20
MARKET INSIGHT - INTERMODAL
Last week Libya’s oil production operations were disrupted as it was reported that local Libyan tribes interrupted output at the the El Feel ...
Tuesday, 28 January 20
INDONESIA - UNCERTAINTY OVER AVAILABILITY OF LSFO - THE STANDARD CLUB
The club has received reports that low sulphur fuel is not currently readily available in all Indonesian ports and that there are local shortages.
...
Sunday, 26 January 20
SUPRAMAX: THE ASIAN BASIN SAW A 56,000DWT SHIP FIXING DELIVERY SAMARINDA TRIP TO WEST COAST INDIA AT $4,750 - BALTIC BRIEFING
Capesize
The market endured heavy losses throughout the past week, with the Capesize 5TC dropping from $8,352 to $4,772. In the lead up to Chin ...
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- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Australian Coal Association
- MS Steel International - UAE
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
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