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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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Thursday, 16 April 20
MARKET INSIGHT - INTERMODAL
As everyone anticipated the results of the OPEC + G20 meeting last week, it was very interesting to watch the reaction of tanker rates that were in ...
Monday, 13 April 20
SUPRAMAX: A 56,000DWT SHIP WAS FIXED DELIVERY PARADIP, REDELIVERY CHINA, AT $4,700 - BALTIC BRIEFING
Capesize
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Saturday, 11 April 20
FAQ: COVID-19 AND CLUB COVER - UK P&I
KNOWLEDGE TO ELEVATE
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Saturday, 11 April 20
KOEN POWER PLANTS INVITED BIDS FOR 1.5 -1.62 MMT OF STEAM COAL
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Friday, 10 April 20
INDIA'S BULKS SUPPLY CHAIN TAKES A HIT DURING LOCKDOWN - WOOD MACKENZIE
India is under a three-week lockdown from 25 March to contain the spread of the coronavirus outbreak. Businesses are shut, and the supply chain is ...
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Showing 1016 to 1020 news of total 6871 |
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- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- The University of Queensland
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Parliament of New Zealand
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Planning Commission, India
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
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