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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, 01 July 19
COAL DEMAND RISES, BUT REMAINS BELOW PEAK LEVELS - FORBES
This article is the third in a series on BP’s recently-released Statistical Review of World Energy 2019. The Review provides a comprehensive ...
Saturday, 29 June 19
ULTRAMAX: FROM SOUTHEAST ASIA MORE COAL WAS ENTERING THE MARKET - BALTIC BRIEFING
Capesize
The market showed variability over the past week, as most routes were active yet sentiment differed from region to region. The Pacific ...
Wednesday, 26 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
As the first half of the year is almost over, it is worth looking back at the sale and purchase activity during these months, focusing on the segme ...
Tuesday, 25 June 19
THERMAL COAL FUTURES ON THE ZHENGSHOU EXCHANGE ROSE - DANIEL HYNES
Coal markets were buoyed by ongoing supply side issues.
According to Daniel Hynes, Senior Commodity Strategist of ANZ, the the ...
Monday, 24 June 19
KOMIPO INVITED BITUMINOUS COAL BIDS FOR BORYEONG & SHIN BORYEONG POWER PLANTS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 260,000 MT MT of min. 5700 NAR coal and 240,000 MT of min. 4,600 k ...
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- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- PTC India Limited - India
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- The University of Queensland
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
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