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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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Saturday, 15 June 19
SUPRAMAX: A 58,000-TONNER, OPEN QINGDAO, WAS BOOKED TO REDELIVER IN EAST COAST INDIA AT $6,500 - BALTIC BRIEFING
Capesize
The market closed on a quiet Friday last week after a few hectic days of mid-week trading. Trade routes from Brazil to the Far East we ...
Friday, 14 June 19
PANAMAX: OUTLOOK IS MIXED - FERNLEYS
Capesize
Sentiment changed to a more nervous tone as pacific cargo volumes failed to deliver as expected, however latest activity indicates res ...
Friday, 14 June 19
ELECTRONIC (PAPERLESS) TRADING - SKULD
KNOWLEDGE TO ELEVATE
Electronic Shipping Solutions: Bolero International Ltd, E-Title Authority Pte Ltd, Global Share S.A. (edoxOnline platfor ...
Wednesday, 12 June 19
KOSPO INVITES BIDS FOR 140,000 MT OF 4,600 NCV COAL FOR SEP. 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 140,000 MT of minimum 4,600 kcal/kg NCV coal ...
Wednesday, 12 June 19
IMO 2020 - COUNTDOWN TO 1 JANUARY 2020 -HOW WILL THE CHANGES AFFECT REFINING AND SHIPPING? - WOOD MACKENZIE
We know that the IMO’s regulations represent the biggest step change the shipping industry has ever seen and the implications will be felt th ...
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- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- The University of Queensland
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
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