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