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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, 11 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 ...
Tuesday, 09 November 21
ASIA-PACIFIC IS HOME TO SOME OF THE WORLD'S LARGEST CARBON-EMITTERS - 2 CHARTS SHOW ITS RELIANCE ON COAL - CNBC
Asia-Pacific is home to some of the world’s largest carbon emitters — and experts say much of global efforts to fight climate change de ...
Tuesday, 09 November 21
CHINA DAILY COAL OUTPUT HITS MULTI-YEAR PEAK, PRICES EXPECTED TO FALL - REUTERS
China’s daily coal output hit 11.93 million tonnes last week, a multi-year high as more capacity returned to operation, the state planner sai ...
Thursday, 04 November 21
CHINA'S COAL MARKET SEES SIGNIFICANT IMPROVEMENTS: NDRC - GLOBAL TIMES
China’s top economic planner has declared initial success in its efforts to ensure coal supply and stabilize prices, saying that daily coal o ...
Thursday, 04 November 21
CHINA THERMAL COAL PRICES RISE AFTER FALLING FOR 10 DAYS - REUTERS
China thermal coal futures rebounded on Wednesday after falling for 10 days on an expected jump in fuel demand to meet heating needs amid forecasts ...
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- Central Java Power - Indonesia
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- PTC India Limited - India
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- VISA Power Limited - India
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
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