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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, 31 October 22
CHINA COAL OUTPUT UP 12.3 PCT IN SEPTEMBER - XINHUA
China’s raw coal output posted stable expansion in September, official data showed.
The country produced 390 million tonnes of ...
Wednesday, 26 October 22
BIMCO PUBLISHES UPDATED GENCON CONTRACT
BIMCO has published a revised and updated version GENCON 2022 – one of its flagship contracts within its portfolio of standard contracts for ...
Monday, 24 October 22
KOSPO TO INVITE 400,000 MT OF COAL FOR 3 YEARS
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an international tender for 400,000 MT of 3,800 - 4,400kcal/kg NCV and Sulfur Max 0 ...
Wednesday, 19 October 22
ASIA COULD BE A BRIGHT SPOT AMID GLOBAL DOWNTURN NEXT YEAR, ECONOMISTS SAY - CNBC
Asia — especially Southeast Asia — remains a bright spot, even as the global economy looks set to head into recession next year, econom ...
Wednesday, 19 October 22
WHAT WILL THE GAS MARKET LOOK LIKE IN A NET ZERO WORLD? - WOOD MACKENZIE
The global gas and LNG market faces a number of ‘great unknowns’. With the market in turmoil uncertainty abounds – from the scale ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- The University of Queensland
- Edison Trading Spa - Italy
- Australian Coal Association
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
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