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