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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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Monday, 16 September 19
COLOMBIAN COAL PRODUCTION TO FALL 5% THIS YEAR, MINING GROUP SAYS - REUTERS
Colombia’s coal production will decline to around 80 million tonnes in 2019, nearly 5% below last year’s, because of low prices and dro ...
Monday, 16 September 19
THE COAL-D SHOULDER? - BALTIC EXCHANGE
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity&rsquo ...
Monday, 16 September 19
SCRUBBERS AND FUEL PROFIT SHARE CLAUSES - CLYDE&CO
From 1 January 2020, Regulation 14 of MARPOL Annex VI provides that the sulphur content in fuel oil used on board ships shall be reduced from a max ...
Monday, 16 September 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR MAX 1,290,000 METRIC TONS OF STEAMING COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for total 1,290,000 Metric Tons steam coal.
...
Sunday, 15 September 19
SUPRAMAX / ULTRAMAX: MORE STEMS WERE NOTICED GOING TO VIETNAM FROM INDONESIA - BALTIC BRIEFING
Capesize
Overall it was a negative week for the Capesize market, with many routes losing ground. A limited amount of time charter appeare ...
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- Coal and Oil Company - UAE
- Australian Coal Association
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- MS Steel International - UAE
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- PTC India Limited - India
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
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