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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, 10 January 19
BUNKER DELIVERY NOTE AMENDMENTS ENTER INTO FORCE AS SULPHUR 2020 REQUIREMENT LOOMS - IMO
KNOWLEDGE TO ELEVATE
Amendments to the bunker delivery note relating to the supply of marine fuel oil to ships which have fitted alternative m ...
Thursday, 10 January 19
WORLD TRADE IN THERMAL COAL IS ESTIMATED TO HAVE GROWN BY 1.0 PER CENT IN 2018 - DEPARTMENT OF INDUSTRY, AUSTRALIA
World Trade
World trade in thermal coal is estimated to have grown by 1.0 per cent to 1.1 billion tonnes in 2018 but it is expected to decline ...
Thursday, 10 January 19
PAKISTAN'S COAL IMPORTS TO SURGE TO 30 MILLION TONS PER ANNUM BY 2020 - CEO, PIB
Pakistan’s coal imports are estimated to surge to 30 million tons/annum from existing 20 million tons/annum by the year 2020, given the plann ...
Wednesday, 09 January 19
PANAMAX: THE PACIFIC SAW RELATIVELY GOOD DEMAND PARTICULARLY FROM INDONESIA AND NOPAC - BALTIC BRIEFING
Capesize
It was an active start to the New Year, with trading from West Australia maintaining momentum during the holiday period. Rates for Chi ...
Wednesday, 09 January 19
SHIPPING MARKET INSIGHT - INERMODAL
Paraphrasing the words of a Chief economist in a latest report of the World Bank Group, the current state of the shipping market very much resemble ...
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- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- ASAPP Information Group - India
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Minerals Council of Australia
- Aditya Birla Group - India
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
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