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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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Thursday, 17 January 19
EIA ESTIMATES THAT U.S. COAL EXPORTS WERE 116 MMST IN 2018, 20% HIGHER THAN THE AMOUNT EXPORTED IN 2017
Coal Supply
EIA estimates that coal production declined by 20 million short tons (MMst) (3%) in 2018, despite a 19 MMst increase in U.S. coal e ...
Thursday, 17 January 19
U.S COAL OUTPUT IS EXPECTED TO FALL BY 3 PER CENT IN 2019 - EIA
EIA forecasts that U.S. coal production will total 729 million short tons (MMst) in 2019, down by 25 MMst (3%) from 2018.
Acco ...
Wednesday, 16 January 19
SHIPPING MARKET INSIGHT - INTERMODAL
As we go through the first days of the year and just a few weeks before the Chinese New Year, the ship repair sector is witnessing a big difference ...
Monday, 14 January 19
KOREA SOUTHERN POWER INVITES BIDS FOR 320,000 MT OF MIN 3,800 NCV 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 coal for ...
Friday, 11 January 19
SUPRAMAX: THE ASIAN ARENA HAD A MIXED START; LIMITED ACTION IN SOUTHEAST ASIA - THE BALTIC BRIEFING
Capesize
Dashed hopes summed up the first full week of the New Year. A slow start followed by a busy 24 hours of improving rates and a firming ...
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- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Australian Coal Association
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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