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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, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
Wednesday, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
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- Georgia Ports Authority, United States
- Minerals Council of Australia
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Planning Commission, India
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
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