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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, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
...
Friday, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
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- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Planning Commission, India
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- PTC India Limited - India
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
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