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