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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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Friday, 28 September 18
INDONESIA 2018 COAL OUTPUT TARGET NOW AROUND 507 MLN T - ENERGY MINISTRY : REUTERS
Indonesia has increased its 2018 coal production target to around 507 million tonnes from a previous target of 485 million tonnes, the Energy Minis ...
Friday, 28 September 18
FITCH RATINGS: METALLURGICAL COAL MINERS MAY CURB COSTS AS PRICES SLIP
Strong cost inflation in the global metallurgical coal sector suggests that miners may focus on cost controls as prices decline from their current ...
Wednesday, 26 September 18
IS YOUR CHARTER PARTY READY FOR 2020? - METTE KRONHOLM FRAENDE, BIMCO
As the deadline for the IMO’s global low-sulphur fuel requirements fast approaches, it is necessary to carefully check the bunker clauses in ...
Wednesday, 26 September 18
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Despite the fact that the dry bulk SnP market saw an admittedly busy summer season, there is a noticeable slowdown in activity during the past thre ...
Tuesday, 25 September 18
THE INCONVENIENT TRUTH OF RISING COAL PRICES - FORBES
Coal prices are not supposed to be rising as governments tighten environmental controls but that’s precisely what is happening at the premium ...
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Showing 1606 to 1610 news of total 6871 |
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- The University of Queensland
- Electricity Authority, New Zealand
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Australian Coal Association
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Planning Commission, India
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
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