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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, 07 January 20
BHP EYES INDIA FOR COAL GROWTH AS CHINA DEMAND FLATLINES - SYDNEY MORNING HERALD
Australia’s largest miner, BHP, believes the long-term trajectory of the emerging economy of India and the acceleration of its steelmaking ou ...
Sunday, 05 January 20
BUNKER QUALITY CLAIMS IN 2020 - ISSUES TO CONSIDER - CLYDE&CO
KNOWLEDGE TO ELEVATE
In recent years the shipping industry has faced a significant number of bunker quality claims, most notably ari ...
Saturday, 04 January 20
SUPRAMAX: A 53,000DWT VESSEL FIXING DELIVERY INDONESIA TRIP TO CHINA AT $4,000 AND A 58,000DWT SHIP FIXING DELIVERY EAST KALIMANTAN TRIP TO THAILAND AT $5,500 - BALTIC BRIEFING
Capesize
The New Year started with an erosion on pre-Christmas rates as the higher low sulphur fuel costs due to IMO 2020 affected levels. From ...
Thursday, 02 January 20
DMO 2020 PRICE SET FOR ELECTRICITY SECTOR - IAN WOLLFF
On the 26th December 2019, the Minister of Energy and Mineral Resources (ESDM) issued the decree No. 261.K/30.MEM/2019 about the States needs for c ...
Thursday, 02 January 20
SULPHUR 2020 COMPENDIUM - HOW ARE INDIVIDUAL PORT STATES EXPECTED TO REACT? - STANDARD CLUB
KNOWLEDGE TO ELEVATE
With the new sulphur limits soon to be in force, Standard Club has been investigating the ways in which certain jurisdict ...
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Showing 1211 to 1215 news of total 6871 |
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- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Minerals Council of Australia
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
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