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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, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
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Showing 26 to 30 news of total 6846 |
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- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- PTC India Limited - India
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
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