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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, 20 January 22
CHINESE COAL JUMPS OVER 6% ON PRE-HOLIDAY SUPPLY WORRY - REUTERS
China’s thermal coal futures soared more than 6% on Wednesday, hitting a level last seen in late November as investors grew concerned over ti ...
Thursday, 20 January 22
VIETNAM: COAL SECTOR SEES POSITIVE PROSPECT IN 2022 - VNA
With many signs of rising demand for coal in various economic sectors in 2022, the Vietnam National Coal – Mineral Industries Group (Vinacomi ...
Wednesday, 19 January 22
MARKET INSIGHT - INTERMODAL
Since the beginning of the year, we have been witnessing the BDI correcting downwards with sizable drops across all segments. Latest similar levels ...
Sunday, 09 January 22
INDONESIA MINISTER SAYS 'EMERGENCY OVER' ON COAL SUPPLY CRUNCH - REUTERS
Indonesia’s power emergency which has triggered a coal export ban is over but the government will still continue to discuss policies in this ...
Wednesday, 05 January 22
CHINA COAL FUTURES SURGE ON SUPPLY WORRIES AMID INDONESIA EXPORT BAN - REUTERS
China’s thermal coal futures surged by as much as 7.8per cent to kick off 2022 on concerns of supply disruptions after Indonesia, its biggest ...
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- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- PTC India Limited - India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
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