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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, 26 February 20
AS ALL OF THE GLOBAL COAL GIANTS EXIT SOUTH AFRICA, ESKOM TO DEPEND ON TWO MINERS FOR 70% OF ITS SUPPLY - BUSINESS INSIDER
While some of its politicians continue to imagine that coal has a future in South Africa, two key developments from the real world show that securi ...
Tuesday, 25 February 20
DELTA DUNIA MAKMUR REGISTERED A NET PROFIT OF US$20 MILLION FOR FY 2019
PT Delta Dunia Makmur, one of the largest coal mining company in Indonesia, has recorded an US$882 million revenue for FY 2019, 1% lower compared t ...
Tuesday, 25 February 20
SHIPPING UPDATE - ALLIED
The positive feeling and optimism for a fresh rally during the first few months of 2020 that prevailed in the tanker markets during the final quart ...
Monday, 24 February 20
COULD SOME VLSFO FUELS BE BANNED? - GIBSON
The run up to the implementation of the new IMO rules on marine fuels from1st January 2020 had owners and charterers analysing the vari ...
Monday, 24 February 20
CHINA SAYS MAJOR COAL FIRMS RESTORE 95% OF PRODUCTION CAPACITY - REUTERS
China’s coal companies controlled by the central government have resumed operations and are back at more than 95% of their capacity, an offic ...
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Showing 1106 to 1110 news of total 6871 |
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- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
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