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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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Friday, 26 November 21
CHINA FINDS COMPLIANCE PROBLEMS IN COAL PRICE INDEX PROBE - REUTERS
China’s state planner on Wednesday said it had discovered some “noncompliant” behaviour among coal price index providers as it an ...
Thursday, 25 November 21
SE ASIA POWER DEMAND TO RISE AS STATE SUPPORT MITIGATES COVID-19 IMPACT - FITCH RATINGS
Electricity demand in south-east Asia is likely to increase in 2021, following slow growth or contraction in 2020, thanks to state support that has ...
Thursday, 25 November 21
FITCH RATINGS INCREASES MOST GLOBAL METALS AND MINING PRICE ASSUMPTIONS - FITCH RATINGS
Fitch Ratings has increased most metals and mining price assumptions, particularly those that benefit from increased longer-term demand due to glob ...
Thursday, 25 November 21
CHINA'S COAL PRICE DROPS IN MID-NOVEMBER AMID GOVERNMENT’S SWEEPING MEASURES - GLOBAL TIMES
China’s coal prices have dropped significantly in mid-November compared with the beginning of the month, with the price of coking coal and co ...
Wednesday, 24 November 21
MARKET INSIGHT - INTERMODAL
Inflation is the word that has dominated the meetings of foreign leaders and finance ministers in recent weeks, as rising energy costs, supply chai ...
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- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- PTC India Limited - India
- GMR Energy Limited - India
- VISA Power Limited - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- The University of Queensland
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Planning Commission, India
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
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