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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, 29 July 20
2019 U.S. COAL PRODUCTION FALLS TO ITS LOWEST LEVEL SINCE 1978 - EIA
In 2019, U.S. coal production totaled 706 million short tons (MMst), a 7% decrease from the 756 MMst mined in 2018. Last year’s production wa ...
Wednesday, 29 July 20
MARKET INSIGHT - INTERMODAL
The dry bulk sector is beginning to recover from reduced SnP activity recorded in the first quarter of 2020. The table below illustrates that appro ...
Tuesday, 28 July 20
DEUTSCHE BANK TO END GLOBAL BUSINESS ACTIVITIES IN COAL MINING BY 2025 - REUTERS
Deutsche Bank, in a revamp of its policies for fossil fuels, said on Monday that it would end business activities worldwide related to coal mining ...
Monday, 27 July 20
IEEFA ENERGY FINANCE CONFERENCE 2020: COAL, LNG, PETROCHEMICAL SECTORS FACE POOR OUTLOOK AND UPHILL BATTLE FOR INVESTORS
Fossil fuel industries were becoming less financially attractive even before the global coronavirus pandemic
Three major fossil fuel ...
Friday, 24 July 20
IPA: THERMAL COAL IMPORTS AT MAJOR PORTS DECLINE 35 PC TO 17.71 MT IN APR TO JUNE - ECONOMIC TIMES
These ports had handled 27.13 MT of thermal coal and 14.95 MT of coking coal in the April-June period of the previous financial year
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- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
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