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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, 02 October 18
PANAMAX: A FURTHER RISE ACROSS ALL MAIN ROUTES THIS WEEK - ALLIED
Capesize
Finally an upward recovery was in sight in the spot market the past few days, after the prolonged negative pressure noted the weeks pr ...
Tuesday, 02 October 18
THE PRICE OF OIL CONTINUES ITS CLIMB AMIDST A SERIES OF CONCERNS REGARDING SUPPLY CONSTRAINTS - GEORGE LAZARIDIS
It has been a busy week for oil traders as the price of oil continues its climb amidst a series of concerns regarding supply constraints.
...
Tuesday, 02 October 18
INDONESIA GETS READY TO MEET INCREASED COAL DEMAND FROM CHINA, FREIGHT TO RESPOND - MIKAL BOE
Indonesian coal suppliers have increased their domestic coal production target by 4.5 percent from a previous 485 million tonnes to a massive 507 m ...
Monday, 01 October 18
SUPRAMAX: A 56,000 DWT FIXED DELIVERY FOR A SURABAYA TRIP WITH REDELIVERY TO WEST COAST INDIA AT $13,500 - THE BALTIC BRIEFING
Capesize
A stop-start market for the big ships with many expectations and few fulfilled. Holidays curtailed trading early in the week, but the ...
Monday, 01 October 18
A NO-DEAL BREXIT WILL UNDOUBTEDLY HAVE CONSEQUENCES FOR IMPORTERS AND EXPORTERS - KATE JONES, THE BALTIC BRIEFING
If you live in the UK, you might be finding it difficult to get away from the Brexit debate. “Hard Brexit”, “soft Brexit”, ...
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- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
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