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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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- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Ministry of Mines - Canada
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- PTC India Limited - India
- The University of Queensland
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
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