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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, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
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Showing 41 to 45 news of total 6871 |
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- White Energy Company Limited
- PTC India Limited - India
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- The University of Queensland
- Interocean Group of Companies - India
- VISA Power Limited - India
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- ASAPP Information Group - India
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