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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, 23 September 22
EUROPEAN STEEL BUYERS SEEK DIRECTION IN VOLATILE MARKET - MEPS INTERNATIONAL
Demand for steel is slow to recover, after the summer break. Mill production costs continue to increase. Steel purchasers are uncertain about the f ...
Friday, 23 September 22
BUOYANT COAL INDUSTRY SEEKS WAYS TO STAY IN THE LONG-TERM ENERGY MIX - REUTERS
There’s no doubt that the global coal industry has been a major beneficiary of Russia’s invasion of Ukraine and the subsequent energy c ...
Friday, 23 September 22
MARKET INSIGHT - INTERMODAL
In view of the forthcoming winter, Europe is trying to escape from its energy (oil & gas) dependency from Russia to ensure energy abundance eve ...
Tuesday, 20 September 22
CHINA'S DAILY COAL OUTPUT HITS 3-MONTH LOW IN AUGUST ON RAINS, COVID CURBS - REUTERS
China’s daily coal output in August slipped to a three-month low as some mines in its biggest coal mining regions reduced operations or even ...
Tuesday, 20 September 22
CHINA COAL OUTPUT UP 8.1 PCT IN AUGUST - XINHUA
China’s raw coal output posted stable expansion in August, official data showed.
The country produced 370 million tonnes of ra ...
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Showing 226 to 230 news of total 6871 |
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- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
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