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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, 12 April 19
U.S : MORE THAN 7 GW OF COAL-FIRED GENERATION IS SCHEDULED TO RETIRE BY THE END OF 2020 - EIA
EIA estimates that U.S. coal production decreased by 19 million short tons (MMst) (2%) in 2018, totaling 756 MMst.
EIA also expects ...
Friday, 12 April 19
GLENCORE WINS $520 MILLION DEAL TO SELL COAL TO MEXICO - REUTERS
Global trader Glencore has won contracts worth around $520 million to supply 4.94 million tonnes of coal to Mexico, state-run power utility the Fed ...
Thursday, 11 April 19
AUSTRALIAN COAL IN THE FRONTLINE OF CHINA'S SUPPLY GLUT - AUSTRALIAN FINANCIAL REVIEW
Australian coal will be hardest hit as China cuts foreign imports of its key energy source to tackle oversupply, and implements policies favouring ...
Wednesday, 10 April 19
COALTRANS ASIA - TAKE PART IN THE LARGEST COAL EVENT IN THE WORLD!
Take part in the largest coal event in the world!
Coaltrans Asia is back this June bringing together the entire international coal s ...
Wednesday, 10 April 19
KOSPO INVITED BIDS FOR 160K MT OF MIN. 3700 NCV COAL FOR JUNE LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 160,000 MT of min. 3,800 Kcal/kg ~max.4,100 ...
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- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- MS Steel International - UAE
- Planning Commission, India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- The University of Queensland
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
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