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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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Saturday, 18 January 20
GERMAN STEAM COAL IMPORTS IN 2019 PLUMMETED BY 17 % - COAL IMPORTERS ASSOCIATION
Press Release: According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), world trade in h ...
Saturday, 18 January 20
A 61,400 DWT FIXED FROM SOUTH EAST ASIA DELIVERY EAST KALIMANTAN REDELIVERY WEST COAST INDIA IN THE LOW $7,000S - BALTIC BRIEFING
Capesize
The market was relatively stable over this past week putting an end to the past months of more extreme declines. While the Capesize 5T ...
Friday, 17 January 20
EIA ESTIMATES THAT U.S. COAL PRODUCTION DECLINED BY 65 MMST (9%) TO 690 MMST IN 2019. IN 2020, COAL PRODUCTION WILL DECLINE BY A FURTHER 14% TO 597 MMST
U.S. Coal Supply.
EIA estimates that U.S. coal production declined by 65 million short tons (MMst) (9%) to 690 MMst in 2019. In 2020, EIA ...
Friday, 17 January 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index, a gauge of coal p ...
Thursday, 16 January 20
SUPRAMAX: INDO/CHINA ROUND VOYAGE FIXING AROUND LOW/MID USD 6,000 BSS APS INDO - FEARNLEYS
Capesize
Still very rough seas for the big ships, with the majority of the fleet trading Far East or fronthaul and consequently earning far les ...
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- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Planning Commission, India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
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