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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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- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- White Energy Company Limited
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Economic Council, Georgia
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
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