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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, 06 February 19
THE BDI HAS EASED BACK TO 645 BP, ITS LOWEST LEVEL SINCE AUGUST 2016 - ALLIED
The dry bulk sector is in the doldrums, with most market participants seemingly left utterly perplexed, and simultaneously, in pursuit of any posit ...
Monday, 04 February 19
COAL STILL IN HIGH DEMAND GLOBALLY
Although the world is switching to renewable energy there is still a big demand for coal around the globe.
This is according to Cany ...
Friday, 01 February 19
ULTRAMAX WAS FIXED DELIVERY KALIMANTAN, FOR TRIP TO WEST COAST INDIA AT $7,000 - BALTIC BRIEFING
Capesize
The Vale dam tragedy sparked a sharp fall in rates across all regions even where tonnage remained tight. The potential loss of product ...
Friday, 01 February 19
SEMBCORP SELECTS NORDEN FOR LONG-TERM INDIAN CONTRACT
NORDEN A/S has signed a 10-year Panamax Contract of Affreightment (COA) with Indian utility firm Sembcorp Energy India Ltd.
From 1 A ...
Tuesday, 29 January 19
HARD COAL BEARS THE BRUNT OF THE RECOMMENDATIONS OF THE COMMISSION GROWTH STRUCTURAL CHANGE AND EMPLOYMENT - VDKI
Press Release: Hard coal bears the brunt of the recommendations of the Commission Growth Structural change and employment.
In its fi ...
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- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- PTC India Limited - India
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Planning Commission, India
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
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