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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, 15 October 21
GLOBAL STEEL DEMAND GROWTH DOWNGRADED FOR 2021 DUE TO CHINA - WORLD STEEL ASSOCIATION
The World Steel Association (worldsteel) today released an update of its Short Range Outlook (SRO) for 2021 and 2022. worldsteel forecasts that ste ...
Thursday, 14 October 21
SPIKING COAL PRICES: DON’T BLAME THE ENERGY TRANSITION - IEEFA
Volatility highlights urgency for renewables-based energy solutions
“Energy crisis.” The phrase evokes nearly-forgotten ...
Thursday, 14 October 21
EIA FORECASTS U.S. COAL PRODUCTION TOTALS 588 MMST IN 2021, UP 53 MMST YOY
U.S. coal production in EIA's forecasts totals 588 million short tons (MMst) in 2021, 53 MMst more than in 2020.
According ...
Wednesday, 13 October 21
COAL PRICES ARE ROARING BACK AMID A GLOBAL ENERGY CRUNCH - SYDNEY MORNING HERALD
Soaring coal prices have placed Australia’s mining and energy exports on track to reach a record $349 billion this year evenas the value of t ...
Wednesday, 13 October 21
CHINA ISN'T THE ONLY HUGE ASIAN ECONOMY WITH A COAL SHORTAGE NOW - CNBC
China is not the only Asian giant grappling with an energy crunch — India is also teetering on the edge of a power crisis.
Mos ...
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- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
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- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- The University of Queensland
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
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