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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, 26 October 21
CHINA'S COAL-RICH SHANXI BEEFS UP COAL PRODUCTION - XINHUA
Major coal producers in north China’s Shanxi Province, a leading coal-producing region of the country, have beefed up production to ensure en ...
Tuesday, 26 October 21
ENERGY CRISIS SHOWS COAL IS AN EXPENSIVE AND UNRELIABLE SOURCE OF ELECTRICITY GENERATION - IEEFA
Any knee-jerk reaction that urges more investment in coal completely misses the point
India is teetering on the brink of joining a growing glo ...
Tuesday, 26 October 21
CHINA TO INVESTIGATE ENERGY INDEX PROVIDERS IN BID TO TAME COAL PRICES - REUTERS
China said on Monday it will investigate energy price index providers as it urged coal industry participants to “strictly” meet contrac ...
Tuesday, 26 October 21
THERE IS PLENTY OF COAL AND GAS IN THE WORLD BUT A VOLATILE MARKET IS NOBODY'S FRIEND - IEEFA
Gas will be winding its way out of the energy system
Gas prices are continuing to surge around the world. The cost of gas is at unpr ...
Tuesday, 26 October 21
AUSTRALIA EXPORTED 51.6 MLN TONNES OF COAL TO INDIA IN FIRST 10 MONTHS, 19% OF ALL AUSTRALIAN COAL EXPORTS; CHINA WAS THE DESTINATION FOR JUST 0.7% - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. In 2021 things started pretty badly, but we are seeing increasing signs of ...
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- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Australian Coal Association
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- The University of Queensland
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- PTC India Limited - India
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
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