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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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Thursday, 26 September 19
INDIA INCREASES ITS ANNUAL COAL PRODUCTION BY 2.7% PER YEAR FROM 850 MILLION SHORT TONS IN 2018 TO 2 BILLION SHORT TONS BY 2050 - EIA
Worldwide coal production holds steady at about 8 billion short tons, or 160 quadrillion British thermal units (Btu), per year through 2040. Inc ...
Wednesday, 25 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
In the past five months there has been significant activity in the asset market with the dry bulk segment being by far the most volatile in terms o ...
Tuesday, 24 September 19
9TH ANNUAL SUPPLY CHAIN INNOVATION SUMMIT 2019 ASIA PACIFIC
Summit: 9th Annual Supply Chain Innovation Summit 2019 Asia Pacific
Host: Ace Events
Website: http: ...
Monday, 23 September 19
SUPRAMAX: THE ASIAN ARENA IT WAS A SLOW START, BUT DEMAND INCREASED AS THE WEEK WENT ON - BALTIC BRIEFING
Capesize
The market trended down over this past week, breaking the market out of its upward trending range. While the market traded sideways at ...
Monday, 23 September 19
CHINA RECORDS SLOWER GROWTH IN COAL PRODUCTION - XINHUA
The growth of China’s raw coal production slowed down in August, data from the National Bureau of Statistics (NBS) showed.
Aro ...
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- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- The University of Queensland
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Planning Commission, India
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
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