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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, 28 September 21
THE MAIDEN EDITION OF DIVE TECHNOLOGY SUMMIT 2021 CONCLUDES SUCCESSFULLY
Press Release: DIVE TECHNOLOGY SUMMIT 2021, a one-day conference on the recent technological advancements in the Industrial Diving industry conclud ...
Monday, 27 September 21
CHINESE COAL FIRMS MEET TO ADDRESS WINTER SUPPLY CHALLENGES - CNBC
Major Chinese coal producers are trying to resolve supply shortages and curb price rises as the country’s winter consumption peak approaches, ...
Saturday, 25 September 21
HIGH STAKES FOR ASIAN DEVELOPMENT BANK’S AMBITIOUS COAL POWER RETIREMENT PLAN - IEEFA
Implementation challenges could block funding for other equally important high impact clean energy funding strategies
In the lead up ...
Thursday, 23 September 21
LONGER COAL CONTRACTS MAY REIN IN PRICES - ECNS
In China’s coal sector that has been marred recently by price surges, regional authorities and related enterprises should ensure the fuel con ...
Thursday, 23 September 21
BALTIC INDEX HITS 12-YEAR PEAK ON FIRMER VESSELS RATES - REUTERS
The Baltic Exchange’s main dry bulk sea freight index rose for a fourth straight session on Wednesday to a 12-year high, buoyed by higher rat ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Economic Council, Georgia
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