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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, 17 December 19
BACK TO FUTURE FOR BUSH AS AUSTRALIA CONSIDERS MOVING AWAY FROM COAL NEWCASTLE - HERALD
Looking backwards could show the way forward for regional communities planning for a future beyond mining.
One of Australia’s ...
Tuesday, 17 December 19
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.01 PCT - XINHUA
China Taiyuan coal transaction price index stood at 133.16 points, down 0.01 percent week on week.
The index, released by China Taiy ...
Tuesday, 17 December 19
YEAR 2019: IT IS LOOKING SET THAT THIS YEAR WILL BE ONE OF THE SLOWEST IN TERMS OF DRY BULK NEWBUILDING ACTIVITY - ALLIED
With just two weeks remaining before 2019 comes to an end, it is now looking set that this year will be one of the slowest in terms of dry bulk new ...
Monday, 16 December 19
ULTRAMAX: A 63,000DWT SHIP FIXING DELIVERY FOR A SINGAPORE TRIP VIA INDONESIA, FOR RE-DELIVERY TO CHINA AT $11,000 - BALTIC BRIEFING
Capesize
It was one-way traffic for the Capesize market this past week, with all routes giving up value. While downward momentum may have slowe ...
Monday, 16 December 19
THE OUTLOOK FOR U.S. THERMAL COAL IS INCREASINGLY STRESSED - MOODY'S
- Slowing global economic growth, trade tensions will continue to exert influence
- Coal's secular decline will persist in 2020
...
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- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Planning Commission, India
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- White Energy Company Limited
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
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