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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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Saturday, 29 August 20
COAL INDIA'S FUEL SUPPLY TO POWER SECTOR DROPS ABOUT 20% IN APR-JUL: PTI
State-owned Coal India”s fuel supply to the power sector registered a decline of 19.5 per cent to 126.30 million tonnes (MT) in the April-Jul ...
Saturday, 29 August 20
SOUTH KOREAN BROKERAGE FIRM KOREA INVESTMENT & SECURITIES TO STOP ALL COAL BUSINESS - KOREA HERALD
South Korean brokerage firm Korea Investment & Securities has decided to stop its investments in coal, in line with the Moon Jae-in administrat ...
Thursday, 27 August 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 985,000 TONS OF BITUMINOUS COAL FOR NOVEMBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 985,000 ...
Thursday, 27 August 20
SOUTHEAST ASIAN NATIONS SET REGION-WIDE RENEWABLE ENERGY GOAL OF 23 PERCENT BY 2025 - ASEAN POST
The Association of Southeast Asian Nations (ASEAN) has set an ambitious target of securing 23 percent of its primary energy from renewable so ...
Thursday, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
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- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- The University of Queensland
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- White Energy Company Limited
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
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