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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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Saturday, 20 August 22
KOSPO TO IMPORT 240000 MT OF MIN 4400 KCAL/KG NCV STEAM COAL FOR OCTOBER;LOADING FROM RUSSIAN PORTS NOT ALLOWED
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 240,000 MT of min 4,400kcal/kg to max. 4,999 kcal/kg NC ...
Wednesday, 17 August 22
INDIAN COMPANIES SWAPPING DOLLAR FOR ASIAN CURRENCIES TO BUY RUSSIAN COAL - REUTERS
Indian companies are using Asian currencies more often to pay for Russian coal imports, according to customs documents and industry sources, avoidi ...
Wednesday, 17 August 22
LNG: MAJOR INVESTMENT AND EXPANSION PHASE, DOUBLING OF LIQUEFACTION CAPACITY BY 2028 PROJECTED - CLARKSONS
Clarksons Research have released the latest version of their long standing annual review, LNG Trade & Transport, on to Shipping Intelligence Ne ...
Wednesday, 17 August 22
UNAFFORDABLE LNG PRICES UNDERMINE RAPID DEMAND GROWTH FORECASTS IN KEY ASIAN MARKETS - IEEFA
Sustained high prices may accelerate downward pressures on Asian LNG demand, clouding long-term industry outlooks
The global liquefi ...
Wednesday, 17 August 22
CHINA'S COAL-RICH SHANXI MAKES STRIDES IN HIGH-QUALITY DEVELOPMENT - XINHUA
Shanxi, a major coal-producing province in north China, has made continuous advances in high-quality development over the past decade, according to ...
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- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Australian Coal Association
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Planning Commission, India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
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