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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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- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Indian Oil Corporation Limited
- PTC India Limited - India
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
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