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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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Thursday, 08 July 21
STRONGEST HALF YEAR FOR SHIPPING MARKETS SINCE 2008 - CLARKSONS
A year on from peak trade disruption, we update our half year report for the shipping industry profiling a strong recovery and some exceptional ind ...
Tuesday, 06 July 21
INDONESIA COAL PRICE REFERENCE RISES TO 112 MONTHS HIGH IN JULY 2021; 121.15% HIGHER COMPARED TO THAT IN JULY 2020 PRICE
COALspot.com: The Indonesia coal price reference for July 2021 fixed at US$ 115.35 per ton FOB vessel.
The Indonesia coal price referenc ...
Tuesday, 06 July 21
INDONESIAN COAL EXPORTS FELL BY 37% YOY IN 1Q21 DUE TO ADVERSE WEATHER CONDITIONS - FITCH RATINGS
Chinese coal imports declined by 25% yoy in 5M21as a result of both restrictions on Australian coal and the high base in 2020. Import volume in Jan ...
Tuesday, 06 July 21
INDONESIAN 4,200 INDEX HAS ALSO INCREASED TO OVER USD50 PER TONNE SINCE MAY THIS YEAR REFLECTING STRONG CHINESE IMPORT DEMAND - FITCH RATINGS
Price Surge Since March
APAC thermal coal has resumed its price surge since March this year. The benchmark Newcastle 6,000kcal/kg grade c ...
Thursday, 01 July 21
WHY INDIA’S SOLAR POWER TARIFFS ARE CLIMBING AFTER HITTING RECORD LOWS LAST YEAR - IEEFA
What’s behind the recent increase?
Solar tariffs are deflationary. Prices have fallen by 75% in seven years in India, and in 2 ...
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- The Treasury - Australian Government
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
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