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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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- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Planning Commission, India
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Xindia Steels Limited - India
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- GMR Energy Limited - India
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