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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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Monday, 11 October 21
COAL ABANDONMENT IN POWER GENERATION PROMOTED GAS DEMAND GROWTH IN EUROPE - TOP MANAGER: TASS
Accelerated abandonment of coal in power generation and the overall recovery of economic activity facilitated gas demand growth in Europe and led t ...
Saturday, 09 October 21
CHINA POWER CUTS: COAL MINERS ORDERED TO BOOST OUTPUT, SAY REPORTS - BBC
Beijing has reportedly ordered China’s coal mines to boost output as an energy shortage across the country has seen millions of homes and bus ...
Friday, 08 October 21
SEPTEMBER CRUDE OIL TANKER DEMOLISHING HITS 39-MONTHS HIGH AT 1.9M DWT - PETER SAND
Has the lid finally come off for crude oil tanker demolition in 2021? If judged by the 1.9m DWT of capacity that was removed in September, the answ ...
Friday, 08 October 21
COAL SHORTAGE MAY LEAD TO RISE IN STEEL PRICES IN COMING MONTHS: JSPL MD - PTI
Steel prices are expected to increase in the coming months as companies are buying coal at three times the rates a month ago, said a top industry e ...
Wednesday, 06 October 21
INDONESIA COAL PRICE REFERENCE: ANOTHER MONTH, ANOTHER RALLY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second and third quarters of 2021 as it reached a pinnacle of $161.63 Oc ...
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- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Planning Commission, India
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
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