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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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Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
...
Friday, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
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- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
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