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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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Wednesday, 13 October 21
FBX INDEX: THE IMPOSSIBILITY OF SHORT-TERM FORECASTING - LARS JENSEN
Will freight rates on Asia-Europe or the Transpacific reach 40.000 USD/FFE in the run-up prior to Chinese New Year 2022? Or will they start droppin ...
Wednesday, 13 October 21
CHINA FLOODS: COAL PRICE HITS FRESH HIGH AS MINES SHUT - BBC
The price of coal used in China’s power plants has surged to a new record high as another of the country’s key mining regions is hit by ...
Tuesday, 12 October 21
BUMA SIGNS CONDITIONAL AGREEMENT FOR AUSTRALIAN ASSET ACQUISITION
PT Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama, through its newly incorporated Australian subsidiary, BUMA International Pty ...
Tuesday, 12 October 21
INDONESIA'S COAL-BASED POWER PLANTS ARE SUBJECT TO CARBON TAX NEXT YEAR, ELECTRICITY COSTS COULD RISE! - CNBC
The Indonesian government is planning plans to implement a carbon tax of IDR 30 per kilogram (kg) of carbon dioxide equivalent (CO2e) or equivalent ...
Monday, 11 October 21
COAL ABANDONMENT IN POWER GENERATION PROMOTED GAS DEMAND GROWTH IN EUROPE - TOP MANAGER: TASS
Accelerated abandonment of coal in power generation and the overall recovery of economic activity facilitated gas demand growth in Europe and led t ...
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- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Planning Commission, India
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- CNBM International Corporation - China
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
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