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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, 07 October 20
U.S. COAL PRODUCTION TO DECREASE BY 26 PERCENT IN 2020 COMPARED TO 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 525 million short tons (MMst), compared with 705 MMst in 2019, a 26% decrease.
COVID-19 a ...
Wednesday, 07 October 20
MARKET INSIGHT - INTERMODAL
The challenges brought forward in 2020 proved to be very different from what we could have ever imagined. Together with placing a significant strai ...
Tuesday, 06 October 20
KOSPO TO IMPORT 80,000 MT OF 3,800 NCV COAL FOR 2H NOV
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 MT Min.3800 kcal/kg NCV coal 2H November, 2020 l ...
Friday, 02 October 20
THE INDONESIA COAL PRICE REFERENCE RISE AFTER HISTORIC CRASH TO US$ 49.42
COALspot.com: The Indonesia Coal Price Reference for the month of October Rise to US$ 51.00 after historic crash to US$ 49.42 in September 2020.
...
Friday, 02 October 20
SRI LANKA MUST LEARN LESSONS FROM AROUND ASIA TO AVOID FURTHER ELECTRICITY CRISES - IEEFA
Overcommitment to fossil-fuelled power generation is leading to excess capacity and rising capacity payments, subsidies, and tariffs around the con ...
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- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Australian Coal Association
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Planning Commission, India
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
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