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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, 25 December 19
EXHAUST GAS CLEANING SYSTEMS (SCRUBBER) GUIDANCE - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
In a few weeks, IMO’s ‘global sulphur cap’ will take effect. The permitted levels of SOx in ship emissi ...
Wednesday, 25 December 19
INDONESIAN BUKIT ASAM TARGETS TO MINE 30 MLN T OF COAL IN 2020 - REUTERS
Indonesian state-owned coal miner PT Bukit Asam targets to produce around 30 million tonnes of coal in 2020, compared with an estimate of 28.5 mill ...
Wednesday, 25 December 19
SHIPPING MARKET INSIGHT - INTERMODAL
As another year in the shipping industry is coming to an end, it is interesting to look at the dry bulk and tanker markets and how these performed ...
Monday, 23 December 19
VLSFO PRICING & AVAILABILITY NEEDS CAREFUL WATCHING - INTEGR8 FUELS
As we approach January 1st 2020 , the VLSFO price premium to HSFO has widened considerably
We are clearly well into the IMO 2020 transition; ch ...
Sunday, 22 December 19
NMDC DIVERSIFIES INTO COAL MINING - THE HINDU
Iron ore mining major NMDC has been allocated two coal blocks in Jharkhand for commercial mining by the Union Ministry of Coal.
Both ...
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Showing 1226 to 1230 news of total 6871 |
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- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Planning Commission, India
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Australian Coal Association
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
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