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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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Tuesday, 16 November 21
INDONESIA’S 2022 COAL USE FOR POWER GENERATION SET TO RISE 3% - REUTERS
Indonesia’s coal consumption for power generation is likely to rise by 3.1% next year compared to 2021, the head of the country’s state ...
Tuesday, 16 November 21
CHINA'S MONTHLY COAL OUTPUT RISES TO HIGHEST SINCE MARCH 2015 - REUTERS
China’s October coal output rose to the highest since at least March 2015, after Beijing approved a raft of coal mine expansions to tame reco ...
Friday, 12 November 21
RUSSIA-INDIA COKING COAL DEAL UNLIKELY TO IMPACT PANAMAX SHIPPING - DREWRY
Russia and India have recently entered into an agreement whereby Russia will supply up to 40 million tonnes of coking coal to India every year. Dre ...
Friday, 12 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Friday, 12 November 21
INDONESIAN COAL PRICE REFERENCE TOPS $215 A TON; THE HIGHEST COAL PRICE IN HISTORY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second half of 2021 as it reached a pinnacle of $215.01 in November 2021 ...
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- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Bhatia International Limited - India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- The University of Queensland
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
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