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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, 12 February 20
MARKET INSIGHT - INTERMODAL
The recent Coronavirus outbreak in China has led to a global health emergency by World Health Organization and it is yet to be seen how long the ph ...
Wednesday, 12 February 20
CHANGES IN LNG MARKET COULD UNDERCUT PLANS FOR NEW JAPANESE COAL PLANTS - CLYDE RUSSELL
Reuters: Clyde Russell
The collapse in the spot price of liquefied natural gas (LNG) in Asia is a short-term phenomenon that may wel ...
Wednesday, 12 February 20
THE SHIPPING INDUSTRY SEES FREIGHT MARKETS IN A COMPLETE STATE OF COLLAPSE AS DEMAND GETS PARALYZED DUE TO CORONAVIRUS OUTBREAK - ALLIED
With China and the world still trying to contain the effects and come to terms with the Wuhan novel coronavirus outbreak, the shipping industry see ...
Wednesday, 12 February 20
WORLD STEEL PRODUCTION IN 2019 - BANCHERO COSTA
In a worrying development, global steel production slowed down considerably in the fourth quarter of 2019. In the final 3 months of 2019, total cru ...
Sunday, 09 February 20
SUPRAMAX: THE ASIAN ARENA STRUGGLED, A 50,000DWT SHIP FIXING A COAL RUN FROM EAST KALIMANTAN TO INDIA AT $2,000 - THE BALTIC BRIEFING
Capesize
The Capesize market endured another dreadful week of calamitous rate level falls, as the usual season low Q1 period combined with rece ...
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Showing 1141 to 1145 news of total 6871 |
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- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
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