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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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- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Indogreen Group - Indonesia
- PTC India Limited - India
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
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