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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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Saturday, 22 September 18
SHIPOWNERS URGENTLY NEED A FUEL-MANAGEMENT PLAN - METTE KRONHOLM FRAENDE, BIMCO
With the majority of ship operators expected to choose low-sulphur fuel over scrubbers to comply with the new IMO sulphur cap regulation, all eyes ...
Saturday, 22 September 18
GERMANY'S MOVE TO SCRAP COAL WILL COST TAXPAYERS - BRIAN PARKIN | WILLIAM WILKES
Chancellor Angela Merkel’s plan to close Germany’s remaining coal-fired power stations will drive up subsidies for regions that mine th ...
Saturday, 22 September 18
FITCH RATINGS: WORLD GROWTH FORECAST CUT ON US-CHINA TRADE BATTLE
Protectionist US trade policies have now reached the point where they are materially affecting what remains a strong global growth outlook, with th ...
Tuesday, 18 September 18
COOLING OUTLOOK FOR COAL - KATE JONES
At a time of increasing focus on the renewables market as the world seeks to clean up its act to prevent climate change, what is the outlook like f ...
Monday, 17 September 18
GLENCORE RETURNS TO JAPAN COAL TALKS SCUPPERED BY HIGH PRICES - BLOOMBERG
Mining giant Glencore Plc and Japanese utilities have resumed thermal coal supply negotiations, restarting talks that fell apart earlier this year ...
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Showing 1611 to 1615 news of total 6871 |
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- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Trasteel International SA, Italy
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
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