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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, 14 October 20
CHINA COKING COAL FUTURES RALLY ON REPORTED BAN ON AUSTRALIA CARGOES - REUTERS
Dalian coking coal futures rallied for a sixth straight session on Tuesday after reports surfaced that China had stopped buying coal from Australia ...
Wednesday, 14 October 20
MARKET INSIGHT - INTERMODAL
The tanker market has experienced severe freight rate and asset value declines over the past 5 months. A potential market upturn may arise in the c ...
Friday, 09 October 20
INDIA'S COAL IMPORTS IMPROVE SOMEWHAT, BUT RECOVERY IS UNEVEN - REUTERS
India’s coal imports, depressed by the impact of coronavirus this year, regained ground in September, but in an uneven uptick – shipmen ...
Thursday, 08 October 20
CHINA'S COAL IMPORTS FROM INDONESIA DECLINED 16.4% Y-O-Y, TO 80.2 MLN TONNES IN THE FIRST 9 MONTHS OF 2020 - BANCHERO COSTA
China's coal imports boomed in 2019, surprising many who had expected the government would clamp down strictly on shipments.
...
Thursday, 08 October 20
GLIMMER OF LIGHT FOR COAL, BUT SHORT TERM - FNARENA
Is coal on the rebound? Demand appears stronger and supply reductions have underpinned a tightening market. Certainly, the Newcastle thermal coal p ...
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- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
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- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
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- New Zealand Coal & Carbon
- Romanian Commodities Exchange
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- MS Steel International - UAE
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- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
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- Mjunction Services Limited - India
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- Latin American Coal - Colombia
- Electricity Authority, New Zealand
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- Australian Coal Association
- Singapore Mercantile Exchange
- Economic Council, Georgia
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- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Planning Commission, India
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
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- Wilmar Investment Holdings
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- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
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- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
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- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
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- Orica Mining Services - Indonesia
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- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
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