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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, 08 January 19
GLOBAL TRADE GROWTH EXPECTED TO REMAIN AT HEALTHY IN 2019 - ALLIED
2019 is here and we find ourselves with new challenges for the shipping industry and the global economy as whole, with market prospects being neith ...
Monday, 07 January 19
THE NEWCASTLE BENCHMARK SPOT PRICE IS FORECAST TO DECLINE FROM AN ESTIMATED AVERAGE OF US$105 A TONNE IN 2018 TO US$74 A TONNE IN 2020 - DEPARTMENT OF INDUSTRY, AUSTRALIA
• The Newcastle benchmark spot price is forecast to decline from an estimated average of US$105 a tonne in 2018 to US$74 a tonne in 2020, prim ...
Monday, 07 January 19
INDONESIAN GOVERNMENT DECLARED COAL BENCHMARK PRICE FALLS FOR FIFTH STRAIGHT MONTH IN JANUARY 2019; LOWEST SINCE JUNE 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 07 January 19
RUSSIA'S COAL PRODUCTION UP 5.9% TO 433.4 MLN TONNES IN 2018 - TASS
Coal production in Russia in 2018 increased by 5.9% year-on-year to 433.4 mln tonnes, according to the Central Dispatching Department of Fuel Energ ...
Friday, 04 January 19
FOCUS IS ON BOOSTING COAL PRODUCTION: INDIAN COAL MINISTER
The current focus of the government is on boosting production from operational coal mines, according to Minister for Coal, Piyush Goyal.
...
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- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- MS Steel International - UAE
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- White Energy Company Limited
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
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