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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, 13 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
The improvements seen in the dry bulk market during the unexpectedly strong Q3 brought enthusiasm and optimism for a last quarter rally. Indeed as ...
Tuesday, 12 November 19
COAL IMPORTS AT MAJOR PORTS SLIP 18 PC TO 51 MT IN APRIL-OCTOBER - ECONOMIC TIMES
The Indian Ports Association (IPA), which maintains cargo data handled by these 12 ports, in its recent report, said "percentage variation fro ...
Monday, 11 November 19
EMINENT MARITIME ORGANIZATIONS AND INDIVIDUALS WERE HONORED
SHIPTEK 2019 Anchors in Greece for its 12th edition.
Eminent Maritime Organizations and Individuals were honored
Greec ...
Wednesday, 06 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
With less than two months before the end of the year, the shipping and refining industries have already taken measures and invested to accommodate ...
Monday, 04 November 19
COAL INDIA'S OCTOBER PRODUCTION MAY FALL 20% - PTI
Coal India’s production in October is likely to be 19-20 per cent lower at about 40 million tonne, as compared to 49.77 million tonne produce ...
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- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- The University of Queensland
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
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