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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, 10 April 19
CHINA'S GROWING THERMAL COAL SUPPLY TO PRESSURE EXPORTERS - FITCH RATINGS
Growing Chinese thermal coal supply is likely to lead to further tightening of import controls by the government, putting pressure on seaborne coal ...
Wednesday, 10 April 19
SHIPPING MARKET INSIGHT - INTERMODAL
The tragedy in Brazil’s Vale Brumadinho where a tailings dam collapsed in January ranks among the world’s worst mining disasters. It co ...
Monday, 08 April 19
5TH INDIA NUCLEAR NEW BUILD CONGRESS 2019
5th India Nuclear New Build Congress 2019
The congress in Mumbai aims to bring together representatives from governments, regulators ...
Monday, 08 April 19
THERMAL COAL PRICES FALL, INDIAN POWER PLANTS TO SEE LIMITED GAINS - BUSINESS STANDARD
Thermal coal prices are on a downward spiral globally. Australian coal prices have fallen nearly 20 per cent in the past week, and 40 per cent from ...
Monday, 08 April 19
CHEAP COAL SWELLS IN SOUTHEAST ASIA, FOILING GLOBAL GREEN PUSH - NIKKEI
Southeast Asian countries are turning to low-cost coal to satisfy their surging electricity demand as the West shies away from the fossil fuel unde ...
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Showing 1426 to 1430 news of total 6871 |
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- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Australian Coal Association
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
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