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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, 03 March 20
COAL'S SHARE OF CHINA ENERGY MIX FALLS IN 2019 BUT CONSUMPTION STILL RISING - REUTERS
Coal accounted for 57.7% of China’s primary energy consumption in 2019, the National Bureau of Statistics said on Friday, down 1.5 percentage ...
Monday, 02 March 20
SHIPOWNERS AND OPERATORS COULD FACE DETENTION OF SHIPS FROM 1ST MARCH UNDER IMO RULE - ICS
Port state control authorities will begin to enforce the IMO’s Sulphur 2020 from 1st March, making it an offense for ships to carry fuel that ...
Saturday, 29 February 20
SUPRAMAX SENTIMENT WAS UP IN A FEW KEY AREAS OVER THE LAST WEEK - BALTIC BRIEFING
Capesize
The Capesize market woes related to Coronavirus have now spread through the wider global markets like wildfire. The wider supply and d ...
Thursday, 27 February 20
FOREIGN COMPANIES LIKELY TO SKIP COMMERCIAL COAL BLOCK AUCTIONS - ECONOMIC TIMES
The Centre is in the process of inviting global players for commercial mining, following 100% foreign direct investment in the sector. However, giv ...
Wednesday, 26 February 20
SHIPPING MARKET INSIGHT - INTERMODAL
Coming from one of its busiest periods historically, with a list of scrubber and BWMS retrofits on a waiting list, the ship repair sector is witnes ...
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Showing 1101 to 1105 news of total 6871 |
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- SMC Global Power, Philippines
- MS Steel International - UAE
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Australian Coal Association
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Minerals Council of Australia
- Planning Commission, India
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
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