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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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Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
Friday, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
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Showing 21 to 25 news of total 6871 |
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- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- The University of Queensland
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
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