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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, 13 August 21
INDONESIA’S COAL EXPORTS TO JAPAN DECLINED BY -26.3% YOY TO 11.9 MLN TONNES IN THE FIRST 7 MONTHS OF 2021; STILL THE SECOND LARGEST SOURCE FOR JAPAN’S COAL IMPORTS IS INDONESIA - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. Total global loadings in the 12 months of 2020 were down -12.7% year-on-yea ...
Thursday, 12 August 21
ONLY 3 VLCCS SOLD FOR DEMOLITION IN 2021 AS SECONDHAND PRICES TEMPT - BIMCO
During the first seven months of 2021, only three actively trading Very Large Crude Carriers (VLCCs) have been sold for demolition. The current mar ...
Wednesday, 11 August 21
U.S: EIA EXPECTS COAL EXPORTS TO TOTAL 90 MMST IN 2021, 30% INCREASE FROM 2020
Coal production in EIA's forecast totals 607 million short tons (MMst) in 2021, an increase of 13% over 2020.
EIA is also ...
Wednesday, 11 August 21
MARKET INSIGHT - INTERMODAL
Energy is at the core of the global climate dialogue as the climate challenge is essentially an energy challenge. Policy experts around the world a ...
Tuesday, 10 August 21
34 INDONESIAN COAL COMPANIES TEMPORARILY BANNED FOR COAL EXPORTS
The Ministry of Energy and Mineral Resources (ESDM) has imposed sanctions in the form of a coal export ban for 34 coal companies as reported by CNB ...
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- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Australian Coal Association
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
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