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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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- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Australian Coal Association
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- The University of Queensland
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
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