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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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Wednesday, 20 March 19
COAL EXPORT FEARS RESURFACE AS RESTRICTIONS HIT MORE CHINESE PORTS AND AUSTRALIAN PRICES COP A 'BELTING' - ABC
Australian thermal coal exports to China are under increasing pressure, with indications import restrictions are spreading to other key ports.
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Monday, 18 March 19
A 56,000DWT SHIP FIXED DELIVERY FOR A SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY CHINA, AT $10,000 - BALTIC BRIEFING
Capesize
The Baltic Capesize market shrugged off its recent negative sentiment to post daily incremental improvements over the last week. Pacif ...
Saturday, 16 March 19
AUSTRALIAN COAL STILL FACING CHINESE DELAY - AAP
Australian coal exports to China are still facing delays, with protectionism and environmental checks blamed for the slowdown.
Coal ...
Thursday, 14 March 19
SUPRAMAX: INDO COAL CARGOES GETTING FIXED AT AROUND US$ 12000 TO CHINA - FEARNLEYS
Capesize
Average daily earning still well below operating costs, and owners keep bleeding - but nevertheless finally some bright spots for the ...
Monday, 11 March 19
SUPRAMAX: A 61,000 DWT VESSEL WAS BOOKED SINGAPORE FOR A TRIP VIA INDONESIA TO CHINA AT $10,500 - BALTIC BRIEFING
Capesize
A faint glimmer of hope with the suggestion the market may have finally bottomed out, with owners attempting to resist further cuts in ...
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- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Ministry of Mines - Canada
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- The University of Queensland
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Economic Council, Georgia
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
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