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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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Sunday, 11 July 21
COAL SHOWS ITS STAYING POWER AS ECONOMIES BOUNCE BACK - THE WALL STREET JOURNAL
Coal use is surging in some of the world’s largest economies as electricity demand rebounds from the pandemic, illustrating the challenges to ...
Sunday, 11 July 21
ROBUST CHINA COAL DEMAND AMID AUSTRALIA IMPORT BAN FUELS PRICE RALLY - REUTERS
Seaborne coal has become a quiet winner among energy commodities, lacking the attention of higher-profile crude oil and liquefied natural gas (LNG) ...
Friday, 09 July 21
EIA FORECASTS COAL’S GENERATION SHARE IN U.S TO RISE FROM 20% IN 2020 TO 24% THIS YEAR BUT TO FALL TO 22% NEXT YEAR
The July Short-Term Energy Outlook (STEO) of EIA remains subject to heightened levels of uncertainty related to the ongoing economic recovery from ...
Friday, 09 July 21
KOREA SOUTH-EAST POWER CO., LTD. INVITES BIDS FOR 1.86 MILLION TONS OF COAL OF 5600 & 4000 NCV COAL FOR THREE YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 280,000 – 300,000 MT of Min. ...
Friday, 09 July 21
CAN WE EXPECT AFFORDABLE POWER SUPPLY BY REPLACING COAL BASED POWER WITH LNG? - FINANCIAL EXPRESS
Bangladesh government’s recent decision to cancel the contracts for 10 coal fired power plants in late June 2021 has invited interest in the ...
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- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- The University of Queensland
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Planning Commission, India
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