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