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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, 27 May 21
CHINA POWER DEMAND EXCEEDS PRE-COVID-19 LEVELS; THERMAL OUTPUT STRONG - FITCH RATINGS
Rising Consumption: Total power consumption rose by 21.2% yoy to 1,921.9GWh in 1Q21 due to the fast recovery of China’s economy, after a drop ...
Thursday, 27 May 21
CHINA'S POWER DEMAND EXCEEDS PRE-PANDEMIC LEVELS; RENEWABLES TO DRIVE DEVELOPMENT - FITCH RATINGS
China's power consumption exceeded the pre-Covid-19 levels in 1Q21 due to the country's fast economic recovery, with strong output from the ...
Wednesday, 26 May 21
THE INDONESIA COAL PRICE REFERENCE FOR MAY 2021 SETTLES AT US$ 89.74 PER TON
COALspot.com: The Indonesia coal price reference for May 2021 settles at US$ 89.74 per ton FOB vessel.
The Indonesia coal pric ...
Wednesday, 26 May 21
MARKET INSIGHT - INTERMODAL
Last year crude tankers’ newbuilding contracting activity was devastated by the economic effects of the Covid-19 pandemic and the cloud of un ...
Wednesday, 26 May 21
NEW POWER AND ENERGY MASTER PLAN MUST BE DESIGNED IN BANGLADESH'S BEST INTERESTS, NOT JAPAN'S - IEEFA
JICA must deliver a low or zero emissions plan as promised, not fund Matarbari 2 coal plant
Clear understandings from the Bangladesh ...
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- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- The University of Queensland
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
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