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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, 22 November 23
OBLIGATION. INDONESIA AIMS TO START COLLECTING LEVIES FROM COAL MINERS IN JANUARY - REUTERS
Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower ...
Tuesday, 21 November 23
INDIAN COAL POWER PLANTS’ CAPACITY UTILISATION WILL IMPROVE TO 65% THIS FISCAL: - CRISIL
Coal-based thermal power units’ plant load factor (PLF) or capacity utilisation will improve to 65 percent in the current fiscal year despite ...
Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime ...
Tuesday, 14 November 23
COAL INDIA BEATS Q2 PROFIT VIEW ON HIGH POWER DEMAND AMID WEAK MONSOON - REUTERS
Coal India on Friday reported better-than-expected second-quarter profit, helped by high power demand and boosted production amid a weak monsoon.
...
Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
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- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- MS Steel International - UAE
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- White Energy Company Limited
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
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