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