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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, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
...
Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Australian Coal Association
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Minerals Council of Australia
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
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