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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, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
Wednesday, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
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- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Economic Council, Georgia
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
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