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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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Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
...
Friday, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
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Showing 36 to 40 news of total 6871 |
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- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
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