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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, 14 July 22
INDIA'S COAL IMPORTS HIT RECORD HIGH IN JUNE - REUTERS
India's coal imports hit a record high in June despite high global prices, data from three trade sources and Refinitiv ship tracking showed, as ...
Thursday, 14 July 22
CHINA'S JUNE COAL IMPORTS SLUMP AS TRADERS SHUN EXPENSIVE OVERSEAS CARGOES - REUTERS
China’s coal imports fell 33% in June from a year ago, with traders turning down expensive overseas cargoes in favor of domestic ones with ca ...
Wednesday, 13 July 22
KOWEPO TO IMPORT 2.79 MILLION TONS OF LOW TO MEDIUM COAL
COALspot.com: Korea Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1360k MT of Min.4400 kcal/kg NCV coal and Total 1 ...
Wednesday, 13 July 22
HAVE MINERS MISSED THE BOAT TO INVEST AND GET AHEAD OF THE ENERGY TRANSITION? - WOOD MACKENZIE
Miners are in rude health, benefiting from economic stimuli, the post-pandemic recovery and associated supply constraints. Initially the Ukraine wa ...
Wednesday, 13 July 22
MARKET INSIGHT - INTERMODAL
Taking the previous market insight a step further, market sentiment remains bullish regarding the overall ROI of scrubbers, facing tailwinds from a ...
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- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Economic Council, Georgia
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
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- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
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- Coastal Gujarat Power Limited - India
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- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
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- Parliament of New Zealand
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- Energy Development Corp, Philippines
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- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
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- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
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- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
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- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- The University of Queensland
- MS Steel International - UAE
- Planning Commission, India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
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