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