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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 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
This year’s tanker S&P activity keeps edging higher compared to the same period in 2018. Year to date we have seen some 143 ships, rangin ...
Tuesday, 11 June 19
INDONESIAN COAL PRICE REFERENCE SET AT $81.48 PER TON IN JUNE, DOWN 15.66 PERCENT YEAR-ON-YEAR
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 10 June 19
CONSECUTIVE OWNERS OF CARGO: WHO HOLDS TITLE AND THE RIGHT TO SUE? - COLIN BIGGERS & PAISLEY
KNOWLEDGE TO ELEVATE
In Tritton Resources Pty Ltd v Ever Rock Navigation S.A. [2019] FCA 276, the Federal Court considered the application of ...
Monday, 10 June 19
KOSPO INVITES BIDS FOR 1,305,000 MT OF MIN 5600 KCAL/KG NCV COAL FOR SEPT 2019 TO DEC 2021
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 435,000 MT (per year) of max 5,600 kcal/kg N ...
Sunday, 09 June 19
SUPRAMAX: ASIA LOST GROUND; THE INDIAN OCEAN SAW SLOWER ACTIVITY - BALTIC BRIEFING
Capesize
The market continued in an unusually steady ascent last week. With no major news in the market, each day improved on the last, breakin ...
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Showing 1386 to 1390 news of total 6871 |
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- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
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