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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, 10 July 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR HCV AND LCV COAL FOR AUGUST 2019 LOADING
COALspot.com: South Korea’s Korea South-East Power Co., Ltd. (KOEN) has issued an international tender for total 460,000 to 500,000 Metric To ...
Wednesday, 10 July 19
SHIPPING MARKET INSIGHT - INTERMODAL
In contrast with the general expectations for the dry bulk market, the sector was not positive or even stable during the past 6 months. The warning ...
Monday, 08 July 19
INDONESIAN COAL PRICE REFERENCE POSTS BIGGEST MONTHLY LOSS SINCE JANUARY 2017
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 08 July 19
ULTRAMAX: A 52,000-TONNER OPEN CJK FIXED FOR A TRIP VIA INDONESIA WITH RE-DELIVERY CHINA AT $6,100 - BALTIC BRIEFING
Capesize
The Capesize market surged over the past week, reaching highs not seen since August last year. Widespread activity in both basins saw ...
Wednesday, 03 July 19
SHIPPING MARKET INSIGHT - INTERMODAL
The global shipping industry is facing numerous challenges at a time when geopolitical turmoil has escalated in view of the recent tension in the M ...
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- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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