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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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Friday, 07 June 19
KOEN INVITED BIDS FOR 1.87 MILLION TONS OF COAL FOR JULY - OCTOBER 2019 DELIVERY
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 1,700,000 to 1,870,000 Metric Tons ...
Wednesday, 05 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
The first semester of 2019 started as a fairly positive semester for the offshore sector whilst there was a recovery on crude prices, as well as a ...
Tuesday, 04 June 19
MARPOL ANNEX VI - SULPHUR CAP 2020 - DEMYSTIFYING THE FONAR - SKULD
KNOWLEDGE TO ELEVATE
Fuel Oil Non-Availability Report (FONAR) is primarily a discretionary tool for a Member State to lessen the breach of MAR ...
Monday, 03 June 19
SUPRAMAX: A 61,000 TONNER OPEN NORTH CHINA, FIXING A TRIP VIA INDONESIA, REDELIVERY SOUTHEAST ASIA AT $7,500 - BALTIC BRIEFING
Capesize
The market continued its steady ascent over the past week to improved levels. The TC average opened the previous week at $12,243 and c ...
Wednesday, 29 May 19
SHIPPING MARKET INSIGHT - INTERMODAL
Reflecting on the first quarter of 2019, the product tanker market was healthy, with average earnings significantly up compared to the first quarte ...
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- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- PTC India Limited - India
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
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