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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, 26 August 20
ASIAN COAL PRICES LIKELY TO REMAIN DEPRESSED SAY TRADERS, ANALYSTS - REUTERS
Asian coal prices, which have fallen around 25% this year as power demand slumped due to the coronavirus outbreak, are unlikely to move higher befo ...
Wednesday, 26 August 20
WORLD COAL EXPORTS: INDONESIAN THERMAL COAL EXPORTS HAVE COME UNDER PRESSURE AS THERMAL COAL PRICES WEAKEN - REPORT
Indonesia’s exports to decline sharply from record highs
Indonesia is the world’s largest thermal coal exporter, sellin ...
Wednesday, 26 August 20
JAPAN'S COAL IMPORTS ARE BEING AFFECTED BY COMPETING INFLUENCES - REPORT
Japan is the world’s third largest thermal coal importer, importing an estimated 135 million tonnes of thermal coal in 2019. The country&rsqu ...
Wednesday, 26 August 20
PENDING SOUTH KOREA LEGISLATION COULD FORCE HALT TO COUNTRY’S COAL PLANT EXPORT DEALS - KOREA ECONOMIC DAILY
South Korea’s parliament looks set to pass new legislation to ban financing on foreign coal power projects, putting all overseas coal-fired p ...
Tuesday, 25 August 20
INDIA'S IMPORTS FALL AS LOCKDOWNS IMPACT THE POWER AND INDUSTRIAL SECTORS - REPORT
India is the world’s second largest thermal coal consumer and importer, importing an estimated 211 million tonnes of thermal coal in 2019.&nb ...
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- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
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