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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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Thursday, 10 September 20
U.S. COAL PRODUCTION IN 2020 TO BE 511 MMST, 28 PER CENT LOWER THAN IN 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 511 million short tons (MMst), 194 MMst (28%) lower than in 2019. Mitigation efforts related t ...
Thursday, 10 September 20
DRY BULK SHIPPING: CHINA'S DEMAND KEEPING THE DRY BULK MARKET GOING - PETER SAND | BIMCO
Overview
An impressive recovery in Chinese dry bulk imports has protected the industry from the effects of falling demand in the rest of the wo ...
Thursday, 10 September 20
TANKER SHIPPING: FREIGHT RATES BACK AT LOSS-MAKING LEVELS AFTER 12 VERY PROFITABLE MONTHS - BIMCO
Overview
A stunningly strong 12 months for the tanker shipping industry is now being replaced by lower freight rates, as lower oil product ...
Thursday, 10 September 20
INDIA'S COAL IMPORTS STUMBLE IN AUGUST, RAISING RISK OF SLOW RECOVERY - REFINITIV | BANCHERO COSTA
After posting a mild recovery in July, India's coal imports have stumbled in August as the South Asian nation battles to restart it ...
Thursday, 10 September 20
THE FIRST 8 MONTHS OF 2020, INDONESIA EXPORTED 217.4 MLN TONNES OF COAL BASED ON REFINITIV - BANCHERO COSTA
The coal market has been hit by a weaker global economy as a result of COVID-19 pandemic and falling industrial electricity demand ...
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- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- The University of Queensland
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- India Bulls Power Limited - India
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