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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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Thursday, 08 July 21
STRONGEST HALF YEAR FOR SHIPPING MARKETS SINCE 2008 - CLARKSONS
A year on from peak trade disruption, we update our half year report for the shipping industry profiling a strong recovery and some exceptional ind ...
Tuesday, 06 July 21
INDONESIA COAL PRICE REFERENCE RISES TO 112 MONTHS HIGH IN JULY 2021; 121.15% HIGHER COMPARED TO THAT IN JULY 2020 PRICE
COALspot.com: The Indonesia coal price reference for July 2021 fixed at US$ 115.35 per ton FOB vessel.
The Indonesia coal price referenc ...
Tuesday, 06 July 21
INDONESIAN COAL EXPORTS FELL BY 37% YOY IN 1Q21 DUE TO ADVERSE WEATHER CONDITIONS - FITCH RATINGS
Chinese coal imports declined by 25% yoy in 5M21as a result of both restrictions on Australian coal and the high base in 2020. Import volume in Jan ...
Tuesday, 06 July 21
INDONESIAN 4,200 INDEX HAS ALSO INCREASED TO OVER USD50 PER TONNE SINCE MAY THIS YEAR REFLECTING STRONG CHINESE IMPORT DEMAND - FITCH RATINGS
Price Surge Since March
APAC thermal coal has resumed its price surge since March this year. The benchmark Newcastle 6,000kcal/kg grade c ...
Thursday, 01 July 21
WHY INDIA’S SOLAR POWER TARIFFS ARE CLIMBING AFTER HITTING RECORD LOWS LAST YEAR - IEEFA
What’s behind the recent increase?
Solar tariffs are deflationary. Prices have fallen by 75% in seven years in India, and in 2 ...
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- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Australian Coal Association
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
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