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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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Wednesday, 20 November 19
AUSTRALIA'S NEW HOPE POSTS 66% SURGE IN Q1 SALEABLE COAL OUTPUT - REUTERS
Australian coal producer New Hope Corp Ltd reported on Tuesday a 66% jump in saleable coal production in the first quarter, as output ramped up at ...
Wednesday, 20 November 19
THE IMO AND THE PRICE OF GAS OR THE IMPACT OF THE INTERNATIONAL MARITIME ORGANISATION'S SULPHUR 2020 LIMIT FOR MARINE FUEL OIL ON THE PRICE OF GAS - KING & SPALDING
The main bunker fuel for ships is High Sulphur Fuel Oil (HSFO, with sulphur up to 3.5% m/m (mass by mass)). This will all change on 1 January 2020 ...
Wednesday, 20 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
While the market expects the next OPEC meeting, there are still no clear signs indicating that the organization will keep supporting oil prices, wh ...
Monday, 18 November 19
CHINA RECORDS STABLE COAL PRODUCTION IN JAN-OCT: XINHUA
China’s raw coal output registered stable growth in the first 10 months, while its imports remained robust, official data showed.
...
Monday, 18 November 19
SUPRAMAX: IN THE INDONESIAN COAL BUSINESS, A 58KDWT VESSEL FIXED DELIVERY PHILIPPINES, REDELIVERY INDIA AT CLOSE TO $8,000 - BALTIC BRIEFING
Capesize
For most of the week the rates were nudging up under a flurry of activity in the Pacific as levels for the West Australia to China C5 ...
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- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- The University of Queensland
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Indian Energy Exchange, India
- Planning Commission, India
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
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