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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, 31 July 19
SHIPPING MARKET INSIGHT - INTERMODAL
It was a fairly busy week in the dry S&P market. Despite the ease of Capesize rates which impacted Panamaxes as well, interest from potential b ...
Sunday, 28 July 19
ULTRAMAX - INDONESIAN COAL CARGOES SAW A 63,000DWT SHIP FIXING DELIVERY FOR A SOUTH CHINA TRIP VIA INDONESIA, REDELIVERY CHINA, AT $11,700 - BALTIC BRIEFING
Capesize
The market was a white knuckled ride this past week as a large downside movement shed value quickly leaving many in bewilderment. The ...
Wednesday, 24 July 19
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.27 PCT - XINHUA
China Taiyuan coal transaction price index stood at 138.78 points Monday, down 0.27 percent week on week.
The index, released by Chi ...
Wednesday, 24 July 19
SHIPPING MARKET INSIGHT - INTERMODAL
Tonnes of ink has been spent analysing the rebound of the dry bulk market the last weeks with the most representative example being the rising perf ...
Wednesday, 24 July 19
COAL'S DEMISE QUICKENS IN EUROPE AS MARKET SHIFT IDLES PLANTS - BLOOMBERG
Commodity markets are stripping away the case for coal in Europe, moving quicker than government efforts to close the most polluting power plants.
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- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- White Energy Company Limited
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
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