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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, 22 October 21
CHINA WANTS TO COOL COAL PRICES. SIMILAR MOVES FOR METALS, CRUDE FAILED - REUTERS
China’s latest attempt to lower runaway commodity prices, this time for thermal coal, is likely to follow a familiar pattern of initial succe ...
Friday, 22 October 21
HARD COAL REMAINS AN IMPORTANT FACTOR FOR SECURITY OF SUPPLY - COAL IMPORTERS ASSOCIATION, GERMANY
- Hard coal remains an important factor for security of supply
- Increase of around 35% in hard-coal-fired power generation in the first three ...
Wednesday, 20 October 21
CHINA'S COAL SHORTAGE TO EASE IN COMING MONTHS, INDUSTRY BODY SAYS - REUTERS
China’s coal shortage will likely ease in coming months, with domestic production and imports already showing signs of picking up, a coal ind ...
Wednesday, 20 October 21
CHINA'S RAW COAL OUTPUT DROPS IN SEPTEMBER - XINHUA
China’s raw coal output dropped 0.9 percent year on year to 330 million tonnes last month, data from the National Bureau of Statistics (NBS) ...
Wednesday, 20 October 21
OVER-RELIANCE ON COAL IN OUR POWER MIX HURTING INDIA - LIVEMINT
In spite of the renewables push, coal still accounts for about 50% of India’s installed power capacity. That means a simultaneous demand and ...
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- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
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- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
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- Parliament of New Zealand
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- Rashtriya Ispat Nigam Limited - India
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- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
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- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
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- Indo Tambangraya Megah - Indonesia
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- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
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- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
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- Tata Chemicals Ltd - India
- Planning Commission, India
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- Altura Mining Limited, Indonesia
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- Australian Coal Association
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- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
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- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
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- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
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- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
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- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
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