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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, 09 October 21
CHINA POWER CUTS: COAL MINERS ORDERED TO BOOST OUTPUT, SAY REPORTS - BBC
Beijing has reportedly ordered China’s coal mines to boost output as an energy shortage across the country has seen millions of homes and bus ...
Friday, 08 October 21
SEPTEMBER CRUDE OIL TANKER DEMOLISHING HITS 39-MONTHS HIGH AT 1.9M DWT - PETER SAND
Has the lid finally come off for crude oil tanker demolition in 2021? If judged by the 1.9m DWT of capacity that was removed in September, the answ ...
Friday, 08 October 21
COAL SHORTAGE MAY LEAD TO RISE IN STEEL PRICES IN COMING MONTHS: JSPL MD - PTI
Steel prices are expected to increase in the coming months as companies are buying coal at three times the rates a month ago, said a top industry e ...
Wednesday, 06 October 21
INDONESIA COAL PRICE REFERENCE: ANOTHER MONTH, ANOTHER RALLY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second and third quarters of 2021 as it reached a pinnacle of $161.63 Oc ...
Wednesday, 06 October 21
EUROPEAN COAL FUTURES CLIMB TO 13-YEAR PEAK - REUTERS
European coal futures rose to a 13-year high and physical thermal coal prices were at record highs as rallying gas prices and strong Asian demand f ...
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- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Australian Coal Association
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
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