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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, 02 January 23
CHINA’S COAL CONSUMPTION TO PEAK BY 2035: REPORT - REUTERS
China’s primary energy consumption is likely to peak at nearly 6.03 billion tonnes of standard coal between 2030 and 2035, refining giant Chi ...
Thursday, 29 December 22
INDIA'S COAL DEMAND LIKELY TO PEAK BETWEEN 2030-2035: MINISTER - ANI
The demand for coal in India will continue and is likely to peak between 2030-2035, Union Minister of Coal, Mines, and Parliamentary Affairs Pralha ...
Thursday, 29 December 22
RIO TINTO AND PARTNERS COULD RECEIVE AS MUCH AS $450M IN GOVERNMENT COMPENSATION FOR COAL PRICE CAP - THE GUARDIAN
Compensation payments for the Gladstone power plant remain the sticking point in the federal government’s coal price cap compensation negotia ...
Wednesday, 28 December 22
MARKET INSIGHT - INTERMODAL
The United Nations Conference on Trade and Development (UNCTAD) published a Global Trade Update on December 13th highlighting that global trade wou ...
Thursday, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
Since the European Union imposed its seaborne crude sanctions, Russian oil exports have tumbled by more than half, according to data compiled by Bl ...
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- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Minerals Council of Australia
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
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