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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, 06 August 19
SHIPPING MARKET INSIGHT - INTERMODAL
On the 12th of May four tankers were attacked near the coast of Fujairah. The tankers hit were waiving international flags such as that of No ...
Monday, 05 August 19
SUPRAMAX: COAL FROM INDONESIA TO CHINA PAID AT MID $8,000S ON A 57,000-TONNER DELIVERY SOUTH CHINA - BALTIC BRIEFING
Capesize
Having hit a high of $32,963 early last week, the Capesize 5TC now stands at $25,749. This is over 20% of its value lost in 10 days. C ...
Thursday, 01 August 19
PANAMAX: THE SENTIMENT IN THE MARKET IS STILL POSITIVE FOR THE LONGER TERM - FEARNLEYS
Capesize
Two weeks ago the 5TC index was at 33,000 USD pd. Since then it has fallen off a bit and has stayed around 27,000 USD pd the last week ...
Thursday, 01 August 19
INDIKA ENERGY REVENUES DECLINE DUE TO LOW COAL PRICES
One of the largest Indonesian integrated energy companies PT Indika Energy Tbk posted revenues of US $ 1,380.4 million, down 4.6% compared to US $ ...
Wednesday, 31 July 19
INDIA'S 2019 THERMAL COAL IMPORTS SEEN AT 180-185 MLN T - WOODMAC
India is expected to import 180-185 million tonnes of thermal coal in 2019, said Dale Hazelton, head of thermal coal at consultancy Wood Mackenzie. ...
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- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
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