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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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- Ministry of Finance - Indonesia
- Australian Coal Association
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- VISA Power Limited - India
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Parliament of New Zealand
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
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