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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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Tuesday, 19 February 19
FAST DEPLETING COAL RESERVES COULD PUSH UP ENERGY PRICES, CAUTIONS EXPERT - THE HINDU BUSINESS LINE
The fast depletion of coal, a strategic resource and India’s fuel of choice currently, has huge implications for energy costs, according to K ...
Monday, 18 February 19
INDIA'S COAL IMPORT FALLS TO 17.25 MT IN JANUARY - PTI
Coal imports saw a decline in January FY 2019 to 17.25 MT from 19.59 MT in the same month of the previous fiscal, according to a report by mjunctio ...
Monday, 18 February 19
THE ROLE OF COAL IN INDIA'S ENERGY AMBITIONS - WCA
India is the world’s second most populous country and figures among the world’s most rapidly growing economies.
The Sout ...
Saturday, 16 February 19
COALTRANS CHINA 2019, CHINA'S LARGEST COAL INDUSTRY GATHERING
Press Release: Coaltrans China 2019 | With the import ban likely to be lifted, it’s time for you to meet your potentia ...
Wednesday, 13 February 19
MALAYSIA WAS THE REGION'S LARGEST COAL IMPORTER WITH 34 MT IN 2018, UP 25% Y-O-Y
Although coal market in 2018 started with strong prices, starting in the beginning of the second half of 2018, the international spot prices for co ...
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- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Economic Council, Georgia
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
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