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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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Saturday, 28 December 19
SUPRAMAX: A 63,000DWT VESSEL, OPEN CIGADING, FIXED A TRIP VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $8,500 - BALTIC BRIEFING
Capesize
The Capesize market this past week has been attempting to recalibrate itself in consideration of weakening freight levels and increasing ...
Saturday, 28 December 19
CHINESE INDUSTRIAL CITY TO FURTHER CUT COAL CONSUMPTION - XINHUA
Harbin, capital city of Heilongjiang Province in China’s northeastern industrial heartland, is planning to further reduce its coal consumptio ...
Friday, 27 December 19
MISERY LOOMS OVER TOP COAL SHIPPERS AS CHINA TO BUY LESS IN 2020 BLOOMBERG
China isn’t cutting back on consumption of the most-polluting fossil fuel just yet, but it is set to reduce imports.
The world ...
Thursday, 26 December 19
REVIEW OF 2019 AND OUTLOOK FOR 2020 - OPEC
Global economic growth slowed in 2019, impacted by a variety of challenges. Trade issues not only led to reduction in global final consumption but ...
Wednesday, 25 December 19
COVER FOR WAR AND TERRORISM RISKS, AND COVER IN RESPECT OF BIOLOGICAL AND BIO-CHEMICAL WEAPONS - 2020 POLICY YEAR: AMERICAN CLUB
KNOWLEDGE TO ELEVATE
This Circular describes the arrangements which have been made to provide special cover for war and terrorism risks, and c ...
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Showing 1221 to 1225 news of total 6871 |
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- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Australian Coal Association
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
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