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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, 06 December 21
CHINA SETS 2022 ANNUAL THERMAL COAL PRICES AT 700 YUAN/T - MEDIA: REUTERS
China’s top economic planner has proposed to set annual thermal coal prices for 2022 at between 550 yuan and 850 yuan ($86-$133) per tonne, a ...
Thursday, 02 December 21
BUMI RECORDED US$ 666.18 MILLION AS REVENUE IN THE 3RD QUARTER, UP 13.31% YOY
PT Bumi Resources Tbk and its subsidiaries have recorded a surge in revenue in the third quarter of 2021. BUMI has recorded US$ 666.18 million as r ...
Thursday, 02 December 21
CHINA'S COAL CRUNCH IS OVER, BUT PRICES ARE STILL TOO HIGH - REUTERS
China’s coal crisis has largely been resolved with gains in both production and stockpiles sufficient to ensure power supplies over winter.
...
Wednesday, 01 December 21
2022 OUTLOOK: INDONESIAN COAL MINING - FITCH RATINGS
Fitch Ratings has a neutral outlook on the Indonesian coal sector for 2022.
Earnings generation should slow down as selling pr ...
Wednesday, 01 December 21
SUPPLY OF COAL TO POWER PLANTS IN NOV MORE THAN CONSUMPTION: JOSHI - PTI
The supply of coal to power plants in November is more than the consumption, resulting in rise in stock of dry fuel at power plants, and this trend ...
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- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- The University of Queensland
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
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