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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, 11 January 20
SUPRAMAX: INDONESIA COAL RUNS, A 58,000DWT SHIP WAS RUMOURED FIXED DELIVERY KALIMANTAN, REDELIVERY WEST COAST INDIA, IN THE $4,000S - BALTIC BRIEFING
Capesize
Closing out the first full trading week of 2020, the Capesize market is struggling to gain any solid positive upward traction. Opening ...
Friday, 10 January 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remains flat
China’s benchmark power coal price remained flat during the past week.
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Thursday, 09 January 20
NEW IMO LIFEBOAT REQUIREMENTS ENTER INTO FORCE - STANDARD CLUB
KNOWLEDGE TO ELEVATE
Three new compulsory IMO resolutions entered into force on 1 January 2020. These resolutions deal with the maintenance, t ...
Thursday, 09 January 20
INDIA'S NEW EASED MINING RULES TO ENHANCE FOREIGN PARTICIPATION IN COAL SECTOR: MINISTER
India’s cabinet has eased mining laws in a bid to attract foreign players to the domestic coal sector and reduce imports of the fuel, coal mi ...
Thursday, 09 January 20
SUPRAMAX: A NUMBER OF INDONESIAN ROUND TRIPS WERE REPORTED AT BELLOW USD 5,000 PD LEVELS - FEARNLEYS
Capesize
The Capesize market has hit new low's in the first week of the new year, with the West Australia route being fixed at USD 6.6 being ...
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- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Australian Coal Association
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- The University of Queensland
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
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