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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, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
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- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- The University of Queensland
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
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