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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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Sunday, 23 June 19
SUPRAMAX: A 56,000-DWT WAS FIXED FROM INDONESIA TO VIETNAM AT $10,000 - BALTIC BRIEFING
Capesize
The story over the past week has been largely Atlantic dominated as the basin’s uniquely volatile characteristics came into play ...
Saturday, 22 June 19
OPEC'S BATTLE FOR CONTROL OF THE OIL MARKET - WOOD MACKENZIE
Oil supply is confounding expectations. We have just raised our forecasts for non-OPEC production, the latest in a series of incremental increases. ...
Friday, 21 June 19
INDONESIA'S BAYAN RESOURCES SIGNED A COAL SUPPLY AGREEMENT WITH THE BANGLADESH BCPCL TO SUPPLY 23 MILLION TONS OF COAL FOR 10 YEARS
On Monday, 17th June 2019, PT. Bayan Resources signed a Coal supply Agreement with the Bangladesh- China Power Company (Pvt.) Limited. BCPCL is a j ...
Thursday, 20 June 19
BUMI RESOURCES EXPECTS TO SELL 42 MILLION TONS OF COAL IN FIRST HALF - JAKARTA POST
PT Bumi Resources (BUMI), Indonesia's largest thermal coal miner, expects to close the first half of this year with coal sales of 42 million to ...
Tuesday, 18 June 19
TANKER SHIPPING: WHILE WE WAIT FOR 2020 TO KICK IN, IT'S ALL ABOUT POLITICS - BIMCO
Demand drivers and freight rates
Iran, Libya and Venezuela face export limitations because of sanctions and internal political troubles. At the s ...
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- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Parliament of New Zealand
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- The University of Queensland
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
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