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Friday, 04 September 20
IN A DEEPENING DEBT HOLE OF $34 BILLION, INDONESIA’S PLN MUST STOP DIGGING - IEEFA
 The utility has added IDR100 trillion in debt annually for the last five years
Utilities globally started changing the way they do business years ago, but Indonesia’s PLN power company stands out as a laggard, focused on a confused menu of piecemeal generation options rather than holistic planning that provides system-level solutions, finds a new report from IEEFA, the Institute for Energy Economics and Financial Analysis.
PLN, alongside utilities worldwide, has suffered a severe drop in revenue as power consumption fell by as much as 20% in some cases amid the COVID-19 pandemic, writes Elrika Hamdi, author of the report Never Waste a Crisis – Indonesia’s PLN Needs A Coherent Strategy to Ride Out the COVID-19 Pandemic.
“But the roots of PLN’s problems are deeper than just the pandemic: PLN’s quiet crisis reflects dysfunctional planning and governance that have put the company into strategic paralysis, unable to change direction or adapt to new market realities,” says Hamdi.
“Despite all the warning signs, senior managers still run the power sector with an old-fashioned business-as-usual mindset. Unfortunately, a 2010 playbook will not save PLN from falling deeper into a modern-day debt trap. Neither will indulging an extractive economy mindset that fosters dependence on fossil fuel, just because it’s there”.
“There has to be a willingness to ask the hard questions when PLN’s ocean of red ink proclaims that PLN’s resource-driven development plans are obsolete in a high-technology world.”
The report notes that much of PLN’s current predicament stems from a plan to add a massive 35 gigawatts of generation capacity to Indonesia’s power supply that was poorly designed and implemented.
“The 35 GW program is a political promise that was meant to embody President Joko Widodo’s (Jokowi’s) ambition to fully electrify Indonesia. There is nothing wrong with the ambition, but the subsequent planning and execution has lacked accountability,” says Hamdi.
“Adding generation capacity has become a goal with little attention paid to long-term financial impacts or new system design options. In the absence of much-needed checks and balances, PLN has been driven to the brink and taxpayers will be left to pay the price.”
“PLN’s ability to sustain debt at this level rests firmly on Indonesia’s investment-grade sovereign credit rating and the government’s readiness to support PLN debtors in the event of financial distress,” says Hamdi, noting that PLN bonds are still relatively attractive to investors because of the company’s monopoly and its quasi-sovereign status.
The author also questions the accountability of government support for PLN. Noting both direct and indirect supports, including subsidies, compensation, capital injections, special accounting treatments and government guarantees, Hamdi says there appears to be little consistent oversight of how government support is used to dress up PLN’s accounting.
“The Ministry of Finance, considering PLN’s strategic importance, makes PLN a top priority, but that does not mean PLN’s financial problems can be effectively addressed by endless access to cheap debt that could eventually threaten Indonesia’s financial credibility,” she concludes.
“The best strategy for PLN would be to rebase their planning framework to focus on more cost-effective grid investments that improve the long-run efficiency of the whole power system. Private sector players cannot invest in the grid and have therefore crowded into the generation sector. This has accentuated PLN’s narrow focus on baseload generation has resulted in excess capacity and a brittle system that lacks flexibility. What’s needed now is a more grid-centric strategy that would permit PLN’s investment to enable a more efficient system. It is crucial for PLN to make sure that the power sector reform is not just cosmetic.”
About IEEFA
The Institute for Energy Economics and Financial Analysis (IEEFA) conducts global research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable, and profitable energy economy.
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Wednesday, 25 November 20
DRY BULK SHIPPING: CHINA REMAINS THE DRIVING FACTOR, BUT COAL POLICY IS DISRUPTING THE MARKET - PETER SAND, BIMCO
The second half of the year has provided some cheer for the dry bulk market, with all ships in the spot market averaging earnings above the break-e ...
Wednesday, 25 November 20
CHINA KICKS AN OWN GOAL WITH AUSTRALIAN COAL - FORBES
China’s annoyance at Australia’s hardline stance on political interference and demands for an independent inquiry into the root cause o ...
Wednesday, 25 November 20
MINISTER - INDONESIA JAN-OCT COAL OUTPUT AT 459 MILLION TONNES - REUTERS
Indonesia coal output in the January to October period was 459 million tonnes, the country’s energy minister told parliament on Monday.
& ...
Wednesday, 25 November 20
INDIA: MORE STEPS NEEDED TO MAKE COMMERCIAL COAL MINING ATTRACTIVE TO GLOBAL PLAYERS - LIVEMINT
India concluded its first commercial coal mine auctions earlier this month. A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odish ...
Wednesday, 25 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.38 PCT - XINHUA
China Taiyuan coal transaction price index stood at 129.21 points Monday, up 0.38 percent week on week.
The index, released by China ...
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- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Australian Coal Association
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- London Commodity Brokers - England
- White Energy Company Limited
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
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