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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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Tuesday, 04 August 20
KOEN INVITED BIDS FOR TOTAL 900K MT OF MIN 5600 NCV COAL FOR 3 YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 260,000 to 300,000 Tons (MT) min. ...
Tuesday, 04 August 20
THE WORLD’S FLEET OF COAL-FIRED POWER STATIONS HAS GOT SMALLER FOR THE FIRST TIME ON RECORD, WITH MORE CAPACITY RETIRED IN THE FIRST HALF OF 2020 THAN THE AMOUNT OPENED - IEA
This is according to the latest Global Coal Plant Tracker (GCPT) results by Global Energy Monitor (GEM), which we completed last month and report f ...
Monday, 03 August 20
U.S. COAL CONSUMPTION, WHICH HAS DECLINED SINCE ITS 2007 PEAK, FELL TO ITS LOWEST POINT IN APRIL 2020 - EIA
According to the U.S. Energy Information Administration’s (EIA) most recent Monthly Energy Review, the United States consumed 6.5 quadrillion ...
Monday, 03 August 20
LOW OIL PRICE AND CORONA VIRUS HIT SUB-SAHARAN AFRICA OIL PRODUCERS - FITCH RATINGS
The collapse in oil prices and the coronavirus shock is worsening the fiscal and external balances of sub-Saharan African oil producers, Fitch Rati ...
Saturday, 01 August 20
SHIP SHAPE - OUCH: FIS
Thursday afternoon saw a report that US GDP in Q2 shrank by 32.9%. Now this may have beaten expectations, but it’s a bit like saying that you ...
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- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- The University of Queensland
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Australian Coal Association
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
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