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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, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
In the final days of February, the dry bulk freight market appeared to maintain a relatively stable momentum, particularly evident in the large ves ...
Friday, 23 February 24
RUSSIAN COAL SHIPMENTS FALL 14% AS SANCTIONS BITE - BIMCO
During the first seven weeks of 2024, Russian coal shipments have fallen 14% y/y. Volumes have gradually declined since October 2023 when logistica ...
Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can e ...
Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
Tuesday, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
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- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Minerals Council of Australia
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
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