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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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Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
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- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- PTC India Limited - India
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- White Energy Company Limited
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- ASAPP Information Group - India
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