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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$1.7¢/kWh more.
Solar and wind are now the lowest-cost energy sources globally and are expected to become even cheaper by 2030. Notably, maintaining coal-fired power plants is more expensive than constructing entirely new, rapidly built renewable energy plants.
Consequently, the gradual retirement of coal-fired power plants and a concerted transition to renewable energy sources will be a win-win solution for Indonesia to fulfill its Paris Agreement commitments and financial goals.
Mutya Yustika, IEEFA
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Monday, 26 November 18
SUPRAMAX: THE ASIAN MARKET STALLED THIS WEEK WITH A BUILD-UP OF TONNAGE - BALTIC BRIEFING
Capesize
It was a positive end to the week, with West Australia/China making significant gains and firing owners’ resolve. There was talk ...
Friday, 23 November 18
GOLDEN ENERGY'S POTENTIAL ACQUISITION OF STANMORE CREDIT POSITIVE - FITCH RATINGS
Golden Energy and Resources Limited's (GEAR, B+/Positive) potential acquisition of Stanmore Coal will help the company diversify its coal opera ...
Friday, 23 November 18
ASSOCIATION CALLS FOR REVISION OF DMO SCHEME FOR COAL - JP
The Indonesian Coal Mining Association (APBI) has called on the government to revise the domestic market obligation (DMO) scheme for coal, which re ...
Friday, 23 November 18
INDONESIA'S REVENUES FROM MINERAL AND COAL INCREASE TO US$ 2.858 BILLION - ANTARA
Indonesia`s non-tax state revenues from the mineral and coal sub-sector reached Rp 41.77 trillion (approximately US$ 2.858 Billion) as of Nov 16, 2 ...
Thursday, 22 November 18
SHUT OUT OF CHINA, U.S. COAL EXPORTERS FIND FAVOUR IN INDIA, FOR NOW - REUTERS
U.S. coal exporters have effectively lost a promising market in China since the imposition of tariffs as part of the ongoing trade dispute, but so ...
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- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- MS Steel International - UAE
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- McConnell Dowell - Australia
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