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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, 04 November 21
FASTER DECARBONISATION: BACK TO BASICS FOR THE MINING INDUSTRY? - WOOD MACKENZIE
To the uninitiated, rugby is a technical and complicated game. As young schoolboys it was all a wee bit confusing and we invariably ended up on the ...
Wednesday, 03 November 21
CHINA TO LAUNCH NEW DATA MONITORING SYSTEM, TARGETING COAL MARKET SPECULATION, HOARDING - GLOBAL TIMES
China’s top economic planner announced on Sunday a new data system for supervising the implementation of medium- and long-term contracts of c ...
Wednesday, 03 November 21
CHINA’S STATE PLANNER SAYS COAL SUPPLY IMPROVING, PRICES STABILISING - REUTERS
China’s coal supply situation has seen significant improvement with joint efforts from coal producers, logistics and downstream users, while ...
Wednesday, 03 November 21
HIGHER COKING COAL PRICES TO PARE PROFITABILITY OF STEELMAKERS IN SECOND HALF OF FY22 - CRISIL RATINGS
The operating margin of primary steelmakers will reduce by a third to 24-26% in the second half of this fiscal versus the first half as input cost ...
Wednesday, 03 November 21
MARKET INSIGHT - INTERMODAL
November is here and soon the all time seasonal favorite “all I want or Christmas is you” by Mariah Carey will be played in radio stati ...
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- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
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