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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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Friday, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
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- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- White Energy Company Limited
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
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