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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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Monday, 23 August 21
CHINESE COAL PRODUCTION RISES 4.9 PCT IN 1ST 7 MONTHS OF 2021 - NBS
Official figures demonstrated that the Chinese raw coal production surged 4.9 percent annually to 2.26 billion tonnes in the January-July period of ...
Friday, 20 August 21
ARE WE LOOKING AT THE NEXT DRY BULK SUPER CYCLE? IS IT EVEN A CYCLE? - BIMCO
Throughout the first half of the year, talk of a new dry bulk super cycle has been on many lips as commodity prices have soared to multi-year highs ...
Friday, 20 August 21
BIMCO'S SHIPPING NUMBER OF THE WEEK: CHINESE IRON ORE IMPORTS FALL TO 14-MONTH LOW IN JULY - PETER SAND
Chinese iron ore imports fell to 88.5 million tonnes in July, the lowest level since May 2020. The fall in July means that accumulated imports are ...
Friday, 20 August 21
SOARING DEMAND FOR THE WORLD’S LEAST-LIKED COMMODITY SEES THERMAL COAL PRICES JUMP 106% THIS YEAR - CNBC
Soaring electricity demand, infrastructure woes and a surge in global gas prices have triggered an extraordinary rally for the world’s least ...
Friday, 20 August 21
CHINA’S IRON ORE IMPORTS CONTRACTED YEAR-ON-YEAR BY 2% IN 2018 AND GREW YEAR-ON-YEAR BY ONLY 1% IN 2019 - COMMODORE RESEARCH
Examining the last ten years of China’s crude steel output and iron ore imports shows that China’s iron ore imports have stayed r ...
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- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Indogreen Group - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- VISA Power Limited - India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Australian Coal Association
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- The University of Queensland
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
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