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