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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, 22 January 19
AUSTRALIA'S YANCOAL PRODUCED 50 MMT SALEABLE COAL IN 2018 UP 59 PER CENT ON THE YEAR PRIOR, THE QUARTERLY REPORT SHOWS
According to the report, the miner's quarterly (Q4' 18) saleable coal production of 12.4 Mmt. Includes 10.5 Mmt (85 per cent) from the Comp ...
Monday, 21 January 19
KOSPO INVITING BIDS FOR 320K MT OF LOW CALORIFIC VALUE COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 3,800 kcal/kg NCV low calo ...
Monday, 21 January 19
SUPRAMAX: INDONESIAN COAL RUNS, TONNAGE WAS GIVING APS DELIVERIES AND A 57,000DWT SHIP FIXED AT $7,000 FOR A TRIP TO WEST COAST INDIA - BALTIC BRIEFING
Capesize
A positive end to a week that saw rates on the West Australia/China run slip below $6.00, as charterers faced a plentiful supply ...
Monday, 21 January 19
HARD COAL WORLD TRADE IN 2018 RISES BY 3.7 PER CENT; GLOBAL HARD COAL PRODUCTION INCREASES BY 1.7 PER CENT - VDKI
Global Hard Coal Production Increases By 1.7%.
According to provisional calculations by the German Coal Importer Association (VDKi), ...
Sunday, 20 January 19
OIL MARKET REPORT: A MARATHON, NOT A SPRINT - IEA
Last month, we asked if there was a floor under prices following the signing of a new Vienna Agreement that aims to re-balance the oil market. Foll ...
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- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- White Energy Company Limited
- PTC India Limited - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Planning Commission, India
- Bhatia International Limited - India
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
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