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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, 02 November 18
CHINA: COAL CONSUMPTION POSTS STRONG GROWTH ON BACK OF POWER GENERATION DEMAND - CHINA DAILY
China’s energy consumption experienced continuous rebound during the first three quarters in 2018, National Energy Administration announced o ...
Thursday, 01 November 18
IMO 2020 - EXPLORING THE OPTION OF SOX SCRUBBERS - SIDDHARTH MAHAJAN, GARD
KNOWLEDGE TO ELEVATE
There are four possible methods of compliance:
1.use VLSFO (very low Sulphur oil) or blends;
2,use dis ...
Wednesday, 31 October 18
INDIA: COAL IMPORTS SURGE ON DOMESTIC SHORT SUPPLY - HINDU
Shortage of thermal coal supply in India has pushed imports up to 85 million tonnes (mt) in the first half of the current fiscal compared to 75 mt ...
Wednesday, 31 October 18
SHIPPING MARKET INSIGHT - APOSTOLOS ROMPOPOULOS
Since the IMO’s 2020 global cap on sulphur in marine fuels is coming into force, ship-owners have to decide whether they will operate using e ...
Monday, 29 October 18
IMPLEMENTATION OF SULPHUR 2020 LIMIT - CARRIAGE BAN ADOPTED - IMO
An amendment to support consistent implementation of the forthcoming 0.50% limit on sulphur in ships fuel oil was adopted by the International Mari ...
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- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Economic Council, Georgia
- London Commodity Brokers - England
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Australian Coal Association
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
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