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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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Friday, 06 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 05 November 20
THE INDONESIA COAL PRICE REFERENCE RISES FOR SECOND CONSECUTIVE MONTH
COALspot.com: The Indonesia Coal Price Reference rose for a 2nd month by 9.24% month on month. The Indonesia Coal Price Reference for the month of ...
Wednesday, 04 November 20
PHILIPPINES COAL MORATORIUM HIGHLIGHTS DRAMATIC PIVOT TO RENEWABLE ENERGY INVESTMENT FOR LOWER PRICES AND POWER SYSTEM RESILIENCE - IEEFA
Policymakers and industry leaders ready to embrace new energy technologies
The Department of Energy’s call for a moratorium on ...
Wednesday, 04 November 20
FOREIGN INVESTORS FACE TOUGH TIMES CLOSING VIETNAM’S REMAINING COAL POWER DEALS - IEEFA
Project bankability at risk as new regulations threaten usual contractual terms
Foreign investors will face higher-than-usual risks ...
Wednesday, 04 November 20
MARKET INSIGHT - INTERMODAL
As the end of the year approaches, one would definitely notice that the newbuilding orderbook for bulk carriers is significantly smaller compared t ...
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- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- White Energy Company Limited
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
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