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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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- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
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- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Posco Energy - South Korea
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
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- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
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- Salva Resources Pvt Ltd - India
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- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
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- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
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- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
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- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
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