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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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Tuesday, 23 May 23
CHINA COAL OUTPUT UP 4.5 PCT IN APRIL - XINHUA
China’s raw coal output posted stable expansion in April, official data showed.
The country produced 380 million tonnes of raw ...
Saturday, 20 May 23
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
In 2022, non-OPEC supply is estimated to have increased by 1.9 mb/d y-o-y. Out of this, US liquids production increased by 1.2 mb/d, mainly on the ...
Saturday, 20 May 23
GLOBAL COAL TRADE HAS REALLY PICKED UP PACE IN RECENT MONTHS, NOW FULLY BACK TO PRE-COVID LEVELS - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels. In Jan-Apr 2023, total global seaborne coa ...
Saturday, 20 May 23
MARKET INSIGHT - INTERMODAL
India is one of the world's largest coal producers and one of the world's largest importers of coal. The country uses coal mainly for power ...
Sunday, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
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Showing 101 to 105 news of total 6871 |
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- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- PTC India Limited - India
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- The University of Queensland
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
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