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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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Saturday, 16 October 21
COAL IS 'KING' AS GAS PRICES SOAR, TOTAL CEO SAYS - AND IT’S BACKFIRING ON CLEANER ENERGY GOALS - CNBC
Surging natural gas prices have led to a jump in coal use, with plants in Europe and Asia firing back up as temperatures decline and the world grap ...
Saturday, 16 October 21
VIETNAM'S COAL-FIRED POWER MAY DOUBLE BY 2030 UNDER DRAFT ENERGY PLAN - REUTERS
Vietnam may double the amount of coal-fired electric generation it installs by 2030 under a draft power development plan submitted to the prime min ...
Friday, 15 October 21
AUSTRALIA'S WHITEHAVEN EXPECTS TO BE DEBT-FREE NEXT YEAR AS COAL PRICES SOAR - REUTERS
Australia’s Whitehaven Coal WHC.AX said on Thursday it expects to be debt-free by early 2022, as thermal coal prices surge to record highs on ...
Friday, 15 October 21
WINTER CHILL KEEPS CHINA'S COAL PRICES HIGH, POWER CRUNCH STOKES INFLATION - REUTERS
China coal prices held near record highs on Thursday as cold weather swept into the country’s north and power plants stocked up on the fuel t ...
Friday, 15 October 21
GLOBAL STEEL DEMAND GROWTH DOWNGRADED FOR 2021 DUE TO CHINA - WORLD STEEL ASSOCIATION
The World Steel Association (worldsteel) today released an update of its Short Range Outlook (SRO) for 2021 and 2022. worldsteel forecasts that ste ...
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- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- White Energy Company Limited
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- The University of Queensland
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
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