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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$1.7¢/kWh more.
Solar and wind are now the lowest-cost energy sources globally and are expected to become even cheaper by 2030. Notably, maintaining coal-fired power plants is more expensive than constructing entirely new, rapidly built renewable energy plants.
Consequently, the gradual retirement of coal-fired power plants and a concerted transition to renewable energy sources will be a win-win solution for Indonesia to fulfill its Paris Agreement commitments and financial goals.
Mutya Yustika, IEEFA
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Tuesday, 11 December 18
PORT OF NEWCASTLE SHIPPED 10.849 MMT OF COAL IN NOVEMBER DOWN 23.44 PERCENT MOM
COALspot.com: The Port of Newcastle, Australia’s major trading port and the world’s largest coal export port has shipped A$ 1,574.8 mil ...
Thursday, 06 December 18
IN THE EAST, BIGGER SUPRA WAS FIXED CA US$ 10K FOR INDO-CHINA COAL ROUND - FEARNLEYS
Capesize
There is cautious optimism for the Capes, with healthier volumes and improving rates in the Pacific. West Australia round is gradually ...
Thursday, 06 December 18
U.S. COAL CONSUMPTION IN 2018 EXPECTED TO BE THE LOWEST IN 39 YEARS - EIA
EIA expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst), a 4% decline from 2017 and the lowest level since 1979. U ...
Thursday, 06 December 18
DEMAND RISKS WEIGH ON GLOBAL SHIPPING SECTOR OUTLOOK - FITCH RATINGS
The global shipping sector outlook remains negative reflecting the demand-side risks of protectionism and slower economic growth, Fitch Ratings say ...
Thursday, 06 December 18
CHINA REVISES MANAGEMENT RULES ON ESTABLISHMENT OF FULLY FOREIGN-OWNED SHIPPING BUSINESSES - XINHUA
Foreign shipping companies will find it easier to establish wholly-owned subsidiaries in China thanks to a revised regulation due to take effect on ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- The University of Queensland
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
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