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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, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
Friday, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
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Showing 21 to 25 news of total 6871 |
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- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- London Commodity Brokers - England
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Economic Council, Georgia
- Australian Coal Association
- Parliament of New Zealand
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
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