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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$1.7¢/kWh more.
Solar and wind are now the lowest-cost energy sources globally and are expected to become even cheaper by 2030. Notably, maintaining coal-fired power plants is more expensive than constructing entirely new, rapidly built renewable energy plants.
Consequently, the gradual retirement of coal-fired power plants and a concerted transition to renewable energy sources will be a win-win solution for Indonesia to fulfill its Paris Agreement commitments and financial goals.
Mutya Yustika, IEEFA
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Thursday, 03 November 22
HANDYSIZE VALUES MOVING UP IN OCTOBER, WHILE LNG VALUES SKYROCKET - VESSELSVALUE
Handysize values have increased this month across most ages, following a period of decline. Values for generic 10 year old Handysizes have moved up ...
Thursday, 03 November 22
EUROPEAN GAS SUPPLY SURPLUS, NOVEMBER HBA DOWN TO US$ 308.2 PER TON - ESDM
European gas supply conditions have a major influence in determining fluctuations in the Reference Coal Price (HBA). The November 2022 HBA recorded ...
Wednesday, 02 November 22
MARKET INSIGHT - INTERMODAL
Only five weeks before western sanctions’ full effect, uncertainty over energy has markets and governments on the edge. What was initially th ...
Tuesday, 01 November 22
CHINA COAL TRADE DISRUPTED BY COVID OUTBREAKS AS WINTER LOOMS - REUTERS
China’s strict COVID-19 policy is constraining coal supplies and pushing up prices, industry officials and traders say, just weeks before the ...
Monday, 31 October 22
U.S. COAL-FIRED GENERATION DECLINING AFTER BRIEF RISE LAST YEAR - EIA
We expect 6% less U.S. coal-fired generation in 2022 than in 2021, according to our latest Short-Term Energy Outlook (STEO). Although coal-fired ge ...
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- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- VISA Power Limited - India
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Planning Commission, India
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- The University of Queensland
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
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