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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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Sunday, 11 July 21
COAL SHOWS ITS STAYING POWER AS ECONOMIES BOUNCE BACK - THE WALL STREET JOURNAL
Coal use is surging in some of the world’s largest economies as electricity demand rebounds from the pandemic, illustrating the challenges to ...
Sunday, 11 July 21
ROBUST CHINA COAL DEMAND AMID AUSTRALIA IMPORT BAN FUELS PRICE RALLY - REUTERS
Seaborne coal has become a quiet winner among energy commodities, lacking the attention of higher-profile crude oil and liquefied natural gas (LNG) ...
Friday, 09 July 21
EIA FORECASTS COAL’S GENERATION SHARE IN U.S TO RISE FROM 20% IN 2020 TO 24% THIS YEAR BUT TO FALL TO 22% NEXT YEAR
The July Short-Term Energy Outlook (STEO) of EIA remains subject to heightened levels of uncertainty related to the ongoing economic recovery from ...
Friday, 09 July 21
KOREA SOUTH-EAST POWER CO., LTD. INVITES BIDS FOR 1.86 MILLION TONS OF COAL OF 5600 & 4000 NCV COAL FOR THREE YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 280,000 – 300,000 MT of Min. ...
Friday, 09 July 21
CAN WE EXPECT AFFORDABLE POWER SUPPLY BY REPLACING COAL BASED POWER WITH LNG? - FINANCIAL EXPRESS
Bangladesh government’s recent decision to cancel the contracts for 10 coal fired power plants in late June 2021 has invited interest in the ...
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- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- The University of Queensland
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
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