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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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Saturday, 16 October 21
DESPITE HIGHER COAL PRICES, U.S. COAL RECOVERY LOOKS WEAK BY MOST MEASURES - IEEFA
U.S. coal sector is locked into a long-term sectoral decline
Coal prices have surged to the highest level in years in the U.S., and have soare ...
Saturday, 16 October 21
COAL IS 'KING' AS GAS PRICES SOAR, TOTAL CEO SAYS - AND IT’S BACKFIRING ON CLEANER ENERGY GOALS - CNBC
Surging natural gas prices have led to a jump in coal use, with plants in Europe and Asia firing back up as temperatures decline and the world grap ...
Saturday, 16 October 21
VIETNAM'S COAL-FIRED POWER MAY DOUBLE BY 2030 UNDER DRAFT ENERGY PLAN - REUTERS
Vietnam may double the amount of coal-fired electric generation it installs by 2030 under a draft power development plan submitted to the prime min ...
Friday, 15 October 21
AUSTRALIA'S WHITEHAVEN EXPECTS TO BE DEBT-FREE NEXT YEAR AS COAL PRICES SOAR - REUTERS
Australia’s Whitehaven Coal WHC.AX said on Thursday it expects to be debt-free by early 2022, as thermal coal prices surge to record highs on ...
Friday, 15 October 21
WINTER CHILL KEEPS CHINA'S COAL PRICES HIGH, POWER CRUNCH STOKES INFLATION - REUTERS
China coal prices held near record highs on Thursday as cold weather swept into the country’s north and power plants stocked up on the fuel t ...
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- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
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