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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, 14 August 20
EIA: COAL PLANTS UNECONOMICAL IN MOST REGIONS - IEEFA
U.S. coal power generation plunged by 30 percent in the first half of 2020 off an already-depressed base, shoved out by natural gas and renewables ...
Thursday, 13 August 20
INDIA SHOULD RECORD A SLIGHT DECREASE IN THERMAL COAL IMPORTS, REACHING A VOLUME OF 167 MILLION TONS BY THE END OF 2020 - ASSOCARBONI
Regarding 2020 thermal coal imports forecasts, Vietnam’s coal imports showed a very strong growth in the first half of 2020 and it is believe ...
Thursday, 13 August 20
INDONESIA REMAINS THE LARGEST EXPORTER OF COAL IN THE WORLD - ASSOCARBONI
According to the last Assocarboni data for 2019, Indonesia remains the largest exporter in the world. Thermal coal exports have in fact reached 456 ...
Wednesday, 12 August 20
VIETNAM WAS THE PROTAGONIST OF A SIGNIFICANT INCREASE IN COAL IMPORTS IN 2019 - ASSOCARBONI
The latest Assocarboni data for 2019 also provide a detailed picture on the trend of the global coal import.
According to Assocarbon ...
Wednesday, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
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- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Siam City Cement PLC, Thailand
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