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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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Thursday, 10 September 20
U.S. COAL PRODUCTION IN 2020 TO BE 511 MMST, 28 PER CENT LOWER THAN IN 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 511 million short tons (MMst), 194 MMst (28%) lower than in 2019. Mitigation efforts related t ...
Thursday, 10 September 20
DRY BULK SHIPPING: CHINA'S DEMAND KEEPING THE DRY BULK MARKET GOING - PETER SAND | BIMCO
Overview
An impressive recovery in Chinese dry bulk imports has protected the industry from the effects of falling demand in the rest of the wo ...
Thursday, 10 September 20
TANKER SHIPPING: FREIGHT RATES BACK AT LOSS-MAKING LEVELS AFTER 12 VERY PROFITABLE MONTHS - BIMCO
Overview
A stunningly strong 12 months for the tanker shipping industry is now being replaced by lower freight rates, as lower oil product ...
Thursday, 10 September 20
INDIA'S COAL IMPORTS STUMBLE IN AUGUST, RAISING RISK OF SLOW RECOVERY - REFINITIV | BANCHERO COSTA
After posting a mild recovery in July, India's coal imports have stumbled in August as the South Asian nation battles to restart it ...
Thursday, 10 September 20
THE FIRST 8 MONTHS OF 2020, INDONESIA EXPORTED 217.4 MLN TONNES OF COAL BASED ON REFINITIV - BANCHERO COSTA
The coal market has been hit by a weaker global economy as a result of COVID-19 pandemic and falling industrial electricity demand ...
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- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Australian Coal Association
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- The University of Queensland
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
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