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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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Tuesday, 21 January 20
THERMAL COAL PRICES SET FOR RECOVERY THIS YEAR AS OVERSUPPLY TIGHTENS - REUTERS
Thermal coal prices are expected to recover this year after losing around a third of their value last year as demand from some south-east Asian cou ...
Monday, 20 January 20
INDIA TO STOP SUBSTITUTABLE COAL IMPORT; CAN GO FOR AUCTION OF 100 FULLY EXPLORED NEW BLOCKS: JOSHI - PTI
The Cabinet recently approved promulgation of Mineral Laws (Amendment) Ordinance 2020 to amend Mines and Minerals (Development and Regulation ) Act ...
Monday, 20 January 20
CHINA DECEMBER COAL OUTPUT UP 2.4 PERCENT ON YEAR - STATS BUREAU: REUTERS
China produced 331.74 million tonnes of coal in December, up 2.4 percent on the year, the National Bureau of Statistics said on Friday.
...
Monday, 20 January 20
CHINA IMPORTED 124.4 MLN TONNES OF COAL FROM INDONESIA IN 2019, UP 15.1 PERCENT YOY - BANCHERO COSTA
China's coal imports raced ahead in 2019, surprising many who had expected that in the months of 2019 to come the government would clamp down s ...
Saturday, 18 January 20
BIMCO: LOW-SULPHUR FUEL SALE JUMPS TO A 70% SHARE IN SINGAPORE, AS THE IMO 2020 SULPHUR CAP KICKS IN
The final quarter of 2019 marked a massive decline of HSFO sales, as the industry transitioned into compliance of the IMO 2020 Sulphur Cap (IMO2020 ...
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- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- The University of Queensland
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
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