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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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Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
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- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- White Energy Company Limited
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
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