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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, 10 June 21
U.S. COAL PRODUCTION TO TOTAL 600 MMST IN 2021, 11% MORE THAN IN 2020 - EIA
EIA expects U.S. coal production to total 600 million short tons (MMst) in 2021, which is 61 MMst (11%) more than in 2020.
The increase is dri ...
Wednesday, 09 June 21
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
The In-Person Maritime Event
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
culminates successfully in Dubai
Press Release: ...
Wednesday, 09 June 21
MARKET INSIGHT - INTERMODAL
“Counter cyclical investments.” usually take place by investing in a “bad” market at the point that ensures that the acquir ...
Saturday, 05 June 21
KOMIPO INVITED 5600 NAR COAL OFFERS FOR THREE YEARS SUPPLY; 520,000 MT PER YEAR
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
Saturday, 05 June 21
IT'S TIME FOR THE BIDEN ADMINISTRATION TO CHAMPION RENEWABLE ENERGY IN THE PHILIPPINES, NOT NUCLEAR OR FOSSIL GAS - IEEFA
Fossil gas and nuclear investments risk locking in costly, outdated infrastructure for the long-term
The United States has spent the ...
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- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- PTC India Limited - India
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
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