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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, 17 June 20
KOREA SOUTHERN POWER CO INVITED 80000 MT OF LOW CALORIFIC VALUE COAL FOR AUGUST 1H, 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) Min 4,200 kcal/kg - Max. ...
Tuesday, 16 June 20
A GLOBAL ECONOMIC SLUMP: WHAT WILL IT MEAN FOR METALS AND MINING? - WOOD MACKENZIE
Back before coronavirus knocked “normal” out cold, the key issues for miners were sub-investment prices, rising requirements for ESG an ...
Tuesday, 16 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.58 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.43 points Monday, up 0.58 percent week on week.
The index, released by China ...
Tuesday, 16 June 20
HIGHER IRON ORE PRICES OFFSET CORONAVIRUS-DRIVEN PRODUCTION RISK - FITCH RATINGS
Lower iron ore production in Brazil, resulting from rising coronavirus infections, should only marginally affect the cash flow of Vale and other gl ...
Tuesday, 16 June 20
SHALE SHOCKED - WOOD MACKENZIE
Capturing shut-ins in real time
Oil markets are searching for balance as the world reflects on the impact of the COVID-19 pandemic. ...
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Showing 906 to 910 news of total 6871 |
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- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- ASAPP Information Group - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
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