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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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Wednesday, 08 September 21
MARKET INSIGHT - INTERMODAL
Last August was extremely hot in the dry bulk market with rates rising at levels that we have years to witness. The dry bulk index exceeded the 4,0 ...
Wednesday, 01 September 21
KOMIPO TO BUY 1.56 MILLION TONS OF 5600 NAR COAL OF AUSTRALIA OR SOUTH AFRICAN ORIGIN FOR 2022 - 2024
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
Wednesday, 01 September 21
MARKET INSIGHT - INTERMODAL
As the summer season is coming to an end, the dry bulk market continues to rally. The confidence that the outstanding freight market performance ha ...
Monday, 30 August 21
68% OF U.S. COAL FLEET RETIREMENTS SINCE 2011 WERE PLANTS FUELED BY BITUMINOUS COAL - EIA
In 2011, the United States had 317.6 gigawatts (GW) of coal-fired electric generation capacity. About 88.7 GW of that capacity was retired in the d ...
Friday, 27 August 21
ALL YOU NEED TO KNOW ABOUT COAL'S MASSIVE RALLY AND NEAR-TERM OUTLOOK - CNBCTV18
Australia’s thermal coal at Newcastle Port, the benchmark for the vast Asian market, has surged over 100 percent this year to trade above $16 ...
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- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
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