Analyzing the Influence of the Coal Export Ban Policy on the Financial Performance of PTBA Indonesia: A Case Study of Indonesia’s Coal Company

The demand for coal in Indonesia and globally has risen in response to global population growth. As the largest exporter of thermal coal globally, they exported around 434 Mts in 2021, with primary consumers including India, China, Japan, and South Korea. Indonesian coal mining companies are confronting a coal export prohibition due to insufficient domestic coal supply for PLN amidst the European energy crisis and the Ukraine-Russia crisis. The coal export ban may negatively impact the sales of coal mining companies, such as PTBA, and limit their potential to expand into Italy and Poland in 2022. This study aims to comprehensively analyze PTBA's fair value using internal and external analysis to assess PTBA's financial condition. PTBA shares were valued at US $0.226 or Rp 3,293 using the DCF method in early 2022. A Monte Carlo Simulation will be performed to assess the value at risk and measure potential investment losses. A Monte Carlo Simulation was conducted at a 95$0.04 and US $0.45. PTBA's current stock is undervalued based on DCF methods, indicating that investors who purchase at US$0.223 or Rp 3,923 may benefit

Market Power Modelling in Electricity Market: A Critical Review

This paper presents a critical review of market power modelling in the electricity market. This research provides a coherent guideline to determine suitable modelling for market power in electricity market. This research also includes market power index application in competition policy enforcement. An ideal market power index is one which provides the most straightforward number to measure the market power exercise. However, a more sophisticated approach is needed to mitigate market power since traditional indexes have limitations in representing the complexity of the power system. Cournot modelling has the main weakness in large-scale power system modelling with transmission constraint. However, the Cournot model continues to develop as a tool to analyse player behaviour due to the analytical connectivity between a real power market and microeconomic engineering theory, e.g. DC load flow, reserve margin, transmission constraint, forward contract, demand elasticity, and RSI. Keywords: Market Power, Electricity Market, Competition Policy JEL Classifications: D470, L160, L40

Nodal Pricing: The Theory and Evidence of Indonesia Power System

This research presents a stylised nodal pricing model of Indonesia power system with engineering-economic constraints. The modelling in this research adopts the 8 nodes stylised model for the Sumatra power system, by incorporating generation, transmission and power system stability constraint. Nodal pricing analysis is performed based on Direct Current (DC) Optimal Power Flow (OPF) and marginal cost calculation in each node. This research is the first ever to estimate nodal prices in the Indonesian electricity market. Nodal pricing model in this paper provides a proper investment signals for Indonesian stakeholder in performing generation expansion planning. Keywords: nodal pricing, Sumatra power system, stylised model JEL Classifications: C610, D410, D470, D600 DOI: https://doi.org/10.32479/ijeep.674

Gas Monetisation Intricacies: Evidence from Indonesia

Indonesia's geographical spread as an archipelago results in a unique and sophisticated electricity distribution. Consequently, PLN, Indonesia's state-owned electricity company, faces several challenges in implementing a robust gas monetisation scheme given these peculiar features of Indonesia's electricity sector. We identify and evaluate the risks and critical issues regarding Indonesia's gas monetisation policy formulation and implementation, particularly the changing regulation and reforms of the past three decades. We surmise that a sound energy policy of gas investment and utilisation by PLN and other energy stakeholders is fundamental. This will manifest in sound business strategies, especially in addressing contractual difficulties and infrastructural deficiencies in securing long-term gas supplies for gas power plants. Some positive approaches are already being adopted by the Indonesian electricity sector stakeholders to tackle the challenges in gas transportation like small scale LNG, marine LNG and CNG but these efforts need to be consistently pursued over the planning horizon. Keywords: gas monetisation; long-term gas supplies; gas transportation JEL Classifications: L95, N7, Q

Techno-economic feasibility study of solar photovoltaic power plant using RETScreen to achieve Indonesia energy transition.

Indonesia, a key player in the global energy transition, faces surging electricity demand and ambitious renewable energy goals. In response, the government introduced a new regulation about renewable energy tariffs, including tariffs for photovoltaic (PV). However, there remains a gap in the academic literature regarding PV power plant feasibility studies under these tariffs. To address this gap, this study investigates the feasibility of a utility-scale solar photovoltaic (PV) power plant in Indonesia, focusing on the newly implemented renewable energy tariffs based on Independent Power Producers (IPPs) and Indonesia's state-owned electricity company (PLN) perspectives. Five scenarios were developed based on the proposed 26 MW solar power plant on Nias Island utilizing RETScreen software. The results showed that based on the IPP perspective, the newly implemented renewable energy tariff was inadequate to make the project feasible, however, an introduction of a 10 USD/t CO2 emission incentive would make the project financially viable for IPPs. Therefore, it is recommended to introduce emission incentives as a strategic approach to attract investors and stimulate investment in Indonesia's PV power plants market, to accelerate Indonesia's energy transition. Conversely, the results also showed that the project is very profitable for PLN due to the significant cost-savings from the de-dieselization, leading to a reduction in the average generation cost for Nias

Competition in Power Generation: Ex-ante Analysis of Indonesia’s Electricity Market

This research optimises the mix and structure of Generation Companies (GenCos) in the Sumatra power system, Indonesia. Market power, indicating the ability to raise prices profitably above the competitive level, tends to be a significant problem in the aftermath of electricity market restructuring. In the process of regulatory reform and the development of competitive electricity markets, it is desirable and practical to establish an efficient number of competitor GenCos. Simulations of a power system account for multi-plant mergers of GenCos subject to a regulatory measure of the Residual Supply Index and the influence of direct current load flow and the topology of the system. This study simulates the Sumatra power system in order to determine the following: optimal market structure, efficient GenCo generation mix, and the optimal number of competitive GenCos. Further, this study seeks to empirically optimise the electricity generation mix and electricity market structure of the Sumatra power system using DC load flow optimisation, market power index, and multi-plant monopoly analysis. The simulations include generation and transmission constraints to represent network constraints. This research is the first to analyse the Sumatra power system using imperfect (Cournot) competition modelling. Furthermore, this study is the first kind to optimise the mix and structure of the Sumatra generation power market. The guidelines and methodology in this research can be implemented in other countries characterised by a monopoly electricity utility company

Mitigating Market Power and Promoting Competition in Electricity Markets through a Preventive Approach: The Role of Forward Contracts

This paper proposes a novel approach to optimizing the structure of the electricity market by mitigating market power through the use of forward contracts. The IEEE 30 node test system is used as a case study for the paper, which employs nodal pricing and a Cournot model with recursive optimization. The findings show that forward contracts can reduce market power and lead to a more competitive market structure with fewer participants. The study emphasizes the importance of successor companies having a well-balanced mix of generation technology. Six players with a different generational mix are optimal in the constrained nodal pricing scenario, while five players with slightly different mixes are optimal in the Cournot case study. These findings have important implications for policymakers and industry stakeholders involved in the design and implementation of efficient electricity markets. Market power can be reduced by using forward contracts and establishing an appropriate number of market participants, resulting in more efficient and sustainable electricity markets. Overall, this study provides useful insights for improving electricity market structures and increasing competition in the electricity sector

Long-Term Scenarios of Indonesia Power Sector to Achieve Nationally Determined Contribution (NDC) 2060

This study aims to assess the feasibility of achieving Indonesia’s net-zero emissions target by 2060 through a model of future power generation using renewable energy sources using the Low Emissions Analysis Platform (LEAP) software. There are five projected power generation scenarios in this research: the reference (REF) scenario, the conservative (CON) scenario, the moderate (MOD) scenario, the progressive (PRO) scenario, and the advanced (ADV) scenario. The availability of renewable energy technology differentiates each scenario. The ADV scenario, which utilizes nuclear power and energy storage, achieves the 100% renewable energy target by 2060 at the lowest total cost. However, the costs of CON and MOD are not significantly higher. Indonesia should decommission existing fossil fuel power plants and construct more renewable energy power plants to achieve the net-zero emissions target. Based on the simulation, biomass energy is the least favorable type of energy. Solar becomes an option only when other renewable energies are at their maximum potential capacity. Furthermore, nuclear energy and energy storage is essential for Indonesia to achieve the renewable target

Techno-Economic Analysis of Indonesia Power Generation Expansion to Achieve Economic Sustainability and Net Zero Carbon 2050

Indonesia’s power generation roadmap aspires to achieve 23%, 28%, and 31% of power from renewable energy by 2025, 2038, and 2050, respectively. This study presents a technoeconomic analysis of Indonesia’s power generation development plans using the LEAP model in the post-COVID-19 period, with a focus on achieving the renewable target. In this study, four scenarios were modeled: business as usual (BAU), cost optimization (CO), national plan (NP), and zero-carbon (ZC). The BAU scenario is based on the PLN Electricity Business Plan 2019–2028, which does not include a target for renewable energy. The CO scenario aims to meet the renewable energy mandate at the lowest possible cost. The NP scenario aims to achieve renewable energy, with an additional natural gas target of 22% by 2025 and 25% by 2038. The ZC scenario aims to achieve 100% renewable energy by 2050 at the lowest possible cost. In comparison to the other scenarios, the BAU scenario has the highest total cost of power production, with a total of 180.51 billion USD by 2050. The CO scenario has the lowest total cost of production with a total of 89.21 billion USD; however, it may not be practical to implement

Exploring Trends in Innovation within Digital Economy Research: A Scientometric Analysis

Significant advancements have been made in studying innovation within the digital economy over the past 20 years. Research on innovation and the digital economy is crucial since it changes all facets of human existence, including business models and entrepreneurial trends. Research regarding innovation in the digital economy has experienced growth over time. However, only a small number of research works have investigated their references using the most widely utilized citation mapping approach, scientometric analysis. This scientometric analysis used 822 published innovation and digital economy research papers from 2000 to August 2023 from the Scopus database. Data analysis and visualization were carried out using biblioshiny (bibliometric package) in R and VOSviewer. According to the data, the study on innovation within the digital economy has grown by 22.75% yearly since 2000. This study offers valuable insight for society, academics, academic institutions, researchers, policymakers, and businesses. The findings reveal the pivotal aspects of the research, derived from the most frequently referenced subjects, publications, authors, and keywords to determine current and future trends in innovation in the digital economy