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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, 14 August 20
EIA: COAL PLANTS UNECONOMICAL IN MOST REGIONS - IEEFA
U.S. coal power generation plunged by 30 percent in the first half of 2020 off an already-depressed base, shoved out by natural gas and renewables ...
Thursday, 13 August 20
INDIA SHOULD RECORD A SLIGHT DECREASE IN THERMAL COAL IMPORTS, REACHING A VOLUME OF 167 MILLION TONS BY THE END OF 2020 - ASSOCARBONI
Regarding 2020 thermal coal imports forecasts, Vietnam’s coal imports showed a very strong growth in the first half of 2020 and it is believe ...
Thursday, 13 August 20
INDONESIA REMAINS THE LARGEST EXPORTER OF COAL IN THE WORLD - ASSOCARBONI
According to the last Assocarboni data for 2019, Indonesia remains the largest exporter in the world. Thermal coal exports have in fact reached 456 ...
Wednesday, 12 August 20
VIETNAM WAS THE PROTAGONIST OF A SIGNIFICANT INCREASE IN COAL IMPORTS IN 2019 - ASSOCARBONI
The latest Assocarboni data for 2019 also provide a detailed picture on the trend of the global coal import.
According to Assocarbon ...
Wednesday, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
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- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Bhatia International Limited - India
- Australian Coal Association
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
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