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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, 18 September 20
INDIA'S COAL-FIRED POWER OUTPUT PICKS UP AS INDUSTRIAL USE RISES - REUTERS
India’s coal-fired electricity generation rose 9.4% in the first half of September, provisional government data showed, as demand from indust ...
Friday, 18 September 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, 17 September 20
LAST HOPES FOR DEMAND GROWTH SET TO DISAPPOINT THERMAL COAL EXPORTERS - IEEFA
Asian thermal coal exporters are fighting an uphill battle even in new markets
The world’s largest thermal coal exporter is eyeing new m ...
Wednesday, 16 September 20
MARKET INSIGHT - INTERMODAL
Another active week in terms of SnP has concluded in the dry bulk market with a diversified array of transactions recorded. Despite the correction ...
Friday, 11 September 20
IMO 2020: A REVIEW OF THE TRANSITION TO VLSFOS - GARD
KNOWLEDGE TO ELEVATE
Many predictions were made in the run up to the imposition of the MARPOL 2020 sulphur cap, none of which was that the tra ...
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- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
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