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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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Tuesday, 18 December 18
TOBA BARA ACQUIRES SHARES OF PT BATU HITAM PERKASA
PT Toba Bara Sejahtra Tbk, through its subsidiary PT Toba Bara Energi (“TBE”), has acquired shares ...
Monday, 17 December 18
SUPRAMAX THERE WAS STRONGER DEMAND FROM SOUTHEAST ASIA, WITH MORE COAL BEING SHIPPED - BALTIC BRIEFING
Capesize
A positive end to last week after a somewhat uncertain start as some gains made were eroded. Rates recovered later for West Australia/ ...
Monday, 17 December 18
SOUTH KOREA STATE-OWNED UTILITY KOREA EAST-WEST POWER CO. LTD ISSUED A TENDER FOR MAX 3.220 MILLION TONS OF 4200 TO 5900 NAR COAL
COALspot.com: South Korea state-owned utility Korea East-West Power Co. Ltd (EWP) issued a tender for max 3,220,000 Metric Tons of coal to be loade ...
Saturday, 15 December 18
COMING CHANGES IN MARINE FUEL SULFUR LIMITS WILL AFFECT GLOBAL OIL MARKETS - EIA
International regulations limiting sulfur in fuels for ocean-going vessels, set to take effect in January 2020, have implications for vessel operat ...
Friday, 14 December 18
KOSPO INVITED BIDS FOR 320,000 MT OF LOW CALORIFIC VALUE COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,300 kcal/kg NCV coal per ...
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Showing 1526 to 1530 news of total 6871 |
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- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Economic Council, Georgia
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Parliament of New Zealand
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Planning Commission, India
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
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