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Saturday, 10 July 21
OVERESTIMATED LCOES OF COAL-FIRED POWER PLANTS CREATE A FINANCIAL BUBBLE - IEEFA
 Massive stranded asset risk detrimentally affects the financial and power distribution
India’s future coal-fired power project pipeline carries a massive stranded asset risk due to the collapse in the average utilisation rate of its coal-fired power fleet leading to an underestimation of financial risk for new projects, finds a new report from the Institute for Energy Economics and Financial Analysis (IEEFA).
There are currently 33 gigawatts (GW) of coal-fired power plants under construction and another 29GW of proposed projects under various stages of regulatory approval in India.
Author of the report, energy finance analyst Kashish Shah says the LCOE (levelised cost of energy) is the required tariff at which the net present value of the investment is zero.
“In other words, LCOE is the minimum required average tariff for a power asset to reach a breakeven return at the end of its life. Anything less than that suggests the asset is unviable.”
Shah found that the average utilisation rate of India’s coal-fired fleet has collapsed to a financially unsustainable low of 53% in financial year (FY) 2020/21 from a high of 78% a decade ago in FY2011/12.
For most coal plants in India, the LCOE is calculated with an assumption of utilisation factor of 85-90% throughout the life of the project. However, the LCOE turns out to be 64% higher with India’s average capacity utilisation factor sitting at ~55% for the last few years.
“The aspiration for further builds of coal capacity stems from the notion that coal is still ‘cheap’,” says Shah. “However, with tariffs now below Rs2/kilowatt hour (kWh) (US$27/MWh), solar power is cheaper than even the variable cost of coal-fired power and is ready to absorb incremental daytime demand.”
IEEFA’s report highlights that utilisation factors of coal-fired power plants have declined not just in India, but across major electricity markets including China, the United Kingdom (UK) and the United States (U.S.).
“With zero fuel costs, the marginal cost of generation for renewables is practically zero,” says Shah. “On the other hand, with increasing inflation in Indian domestic coal prices and railway transportation costs for coal, the gap between cost competitiveness of renewables versus coal is widening.
“This raises a serious concern about the viability of coal-fired power plants.
“Debt servicing for underutilised coal-fired power assets becomes extremely difficult and creates a liquidity crunch in the whole value chain. The financial stress then spills over to the power distribution sector as well as affecting India’s financial lending institutions. This further inhibits growth in other important segments of the power industry such as renewables and transmission infrastructure, which are extremely critical for India’s electricity sector transition.”
The report concludes that the financial viability of India’s proposed and under construction coal-fired power projects should be re-evaluated based on the right estimation of utilisation factors including LCOE and capacity factor to avoid further bloating of India’s non-performing assets.
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Friday, 27 August 21
THE ECONOMICS OF INDONESIA’S DIESEL POWER PLANT TO GAS CONVERSION PLAN ARE PROBLEMATIC - IEEFA
Deploying new small-scale LNG is an uphill battle for PGN
Indonesian gas is currently in a precarious position, where the government needs to ...
Thursday, 26 August 21
INDIA IMPORTED 17.06 MLN TONNES OF LPG IN 2020; UP 11.5% Y-O-Y
Global LPG trade remained fairly positive in 2020, despite the global economic impact from COVID-19, and surged strongly in the first half of 2021. ...
Thursday, 26 August 21
MARKET INSIGHT - INTERMODAL
24th of August 2021, the Baltic Dry Index reached 4,201, a YTD high and the highest since May 2010.
Cape 5TC daily average @ 51,472
...
Tuesday, 24 August 21
COAL PRICE RALLY TO PRESSURE CHINESE POWER GENCOS’ MARGINS FITCH RATINGS
Fitch Ratings expects the pressure on Chinese power generation companies’ (gencos) profit from the recent coal price surge to weaken their cr ...
Tuesday, 24 August 21
TIGHT POWER SUPPLY IN CHINA AMID STRONG DEMAND, HIGH COAL PRICES - FITCH RATINGS
China experienced tight power supply in 1H21 on stronger than expected power demand as economic activity continued to recover, Fitch Ratings says i ...
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- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- ASAPP Information Group - India
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Marubeni Corporation - India
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Planning Commission, India
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
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