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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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Tuesday, 09 November 21
ASIA-PACIFIC IS HOME TO SOME OF THE WORLD'S LARGEST CARBON-EMITTERS - 2 CHARTS SHOW ITS RELIANCE ON COAL - CNBC
Asia-Pacific is home to some of the world’s largest carbon emitters — and experts say much of global efforts to fight climate change de ...
Tuesday, 09 November 21
CHINA DAILY COAL OUTPUT HITS MULTI-YEAR PEAK, PRICES EXPECTED TO FALL - REUTERS
China’s daily coal output hit 11.93 million tonnes last week, a multi-year high as more capacity returned to operation, the state planner sai ...
Thursday, 04 November 21
CHINA'S COAL MARKET SEES SIGNIFICANT IMPROVEMENTS: NDRC - GLOBAL TIMES
China’s top economic planner has declared initial success in its efforts to ensure coal supply and stabilize prices, saying that daily coal o ...
Thursday, 04 November 21
CHINA THERMAL COAL PRICES RISE AFTER FALLING FOR 10 DAYS - REUTERS
China thermal coal futures rebounded on Wednesday after falling for 10 days on an expected jump in fuel demand to meet heating needs amid forecasts ...
Thursday, 04 November 21
FASTER DECARBONISATION: BACK TO BASICS FOR THE MINING INDUSTRY? - WOOD MACKENZIE
To the uninitiated, rugby is a technical and complicated game. As young schoolboys it was all a wee bit confusing and we invariably ended up on the ...
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- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
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