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