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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, 28 July 21
IN THE PHILIPPINES, COAL’S DEMISE MAKES WAY FOR A RENEWABLE ENERGY BOOM - IEEFA
Imported gas lock-in could undermine the economic benefits of a clean energy transition
The Philippines’ energy sector is on t ...
Wednesday, 28 July 21
MARKET INSIGHT - INTERMODAL
Assessing the ship repair sector during this first half of the year, we continue to come across surprises and new restrictions which are trembling ...
Saturday, 24 July 21
UNDERSTANDING INDIA'S LATEST PEAK POWER DEMAND RECORD - IEEFA
Ramping up solar will be crucial as peak power demand hits during the day
At around noon on 7 July 2021, India’s instantaneous ...
Wednesday, 21 July 21
MARKET INSIGHT - INTERMODAL
Dry Buk Sales and Purchase activity has heated up during 2021, reaching record high levels during the first half of the year. The increased interes ...
Monday, 19 July 21
CHINA'S COAL OUTPUT UP 6.4 PCT IN H1 - XINHUA
China’s raw coal output climbed 6.4 percent year on year to 1.95 billion tonnes in the first six months of the year, official data showed.
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- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
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