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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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Monday, 14 June 21
'WISHFUL THINKING': WHY CHINA NEEDS AUSTRALIAN IRON ORE FOR 'MANY YEARS' TO COME - YAHOO FINANCE AU
A “wintry period”.
That’s what’s expected to happen to Australia’s economy “when” China st ...
Sunday, 13 June 21
COAL AND LNG’S SURGE IN ASIA PLAYS INTO RENEWABLE ENERGY HANDS - REUTERS
Liquefied natural gas (LNG) and thermal coal prices in Asia have been roaring ahead in recent months amid strong demand, but while welcome news for ...
Friday, 11 June 21
5 REASONS GLOBAL SHIPPING COSTS WILL CONTINUE TO RISE - ING
No short-term relief
Shipping costs have been growing strongly since the autumn of 2020, but the first months of this year have seen a new surg ...
Friday, 11 June 21
ASIA COAL PRICES SURGE, BUT CHINA-AUSTRALIA DISPUTE MEANS RALLY IS UNEVEN - REUTERS
Thermal coal prices across Asia have surged to multi-year highs amid strong demand and some supply constraints, but some types of the fuel have don ...
Thursday, 10 June 21
INDONESIA COAL EARNINGS RECOVERY TO SLOW AFTER STRONG 1Q - FITCH RATINGS
Fitch Ratings expects the recovery in operating and financial performance of Indonesian coal miners and coal contractors to slow during rest of 202 ...
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- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Australian Coal Association
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
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