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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, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
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Showing 41 to 45 news of total 6871 |
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- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
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