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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, 01 September 21
KOMIPO TO BUY 1.56 MILLION TONS OF 5600 NAR COAL OF AUSTRALIA OR SOUTH AFRICAN ORIGIN FOR 2022 - 2024
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
Wednesday, 01 September 21
MARKET INSIGHT - INTERMODAL
As the summer season is coming to an end, the dry bulk market continues to rally. The confidence that the outstanding freight market performance ha ...
Monday, 30 August 21
68% OF U.S. COAL FLEET RETIREMENTS SINCE 2011 WERE PLANTS FUELED BY BITUMINOUS COAL - EIA
In 2011, the United States had 317.6 gigawatts (GW) of coal-fired electric generation capacity. About 88.7 GW of that capacity was retired in the d ...
Friday, 27 August 21
ALL YOU NEED TO KNOW ABOUT COAL'S MASSIVE RALLY AND NEAR-TERM OUTLOOK - CNBCTV18
Australia’s thermal coal at Newcastle Port, the benchmark for the vast Asian market, has surged over 100 percent this year to trade above $16 ...
Friday, 27 August 21
THE ECONOMICS OF INDONESIA’S DIESEL POWER PLANT TO GAS CONVERSION PLAN ARE PROBLEMATIC - IEEFA
Deploying new small-scale LNG is an uphill battle for PGN
Indonesian gas is currently in a precarious position, where the government needs to ...
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- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- PTC India Limited - India
- Economic Council, Georgia
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- The University of Queensland
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
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