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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, 30 June 21
MARKET INSIGHT - INTERMODAL
The strong freight performance since the beginning of year has continued for the dry bulk market with earnings being at the highest level in over a ...
Monday, 28 June 21
MINISTRY OF ENERGY AND MINERAL RESOURCES OF INDONESIA THREATENS TO REVOKE 2,350 MINING BUSINESS PERMITS
The Ministry of Energy and Mineral Resources said that the revocation of mining business permits was in accordance with President Jokowi's inst ...
Sunday, 27 June 21
INDONESIA'S STATE-OWNED UTILITY PLN'S 2060 NET ZERO AMBITION NOT WITHOUT FLAWS AND GAPS - IEEFA
Indonesia on the right emissions reduction pathway but same old coal stories persist
Recent announcements by Indonesia’s state-owned uti ...
Saturday, 26 June 21
COAL PRICES HIT DECADE HIGH DESPITE EFFORTS TO WEAN THE WORLD OFF CARBON - WSJ
Rebounding electricity usage and scanty rainfall in China have added fuel to the rally
Coal prices have climbed to their highest lev ...
Saturday, 26 June 21
KOSPO INVITED BIDS FOR 480,000 MT OF COAL PER ANNUM
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 480,000 MT of NCV 1 Min. 5,600 (Spec 1) /Min. 5,0 ...
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- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
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- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
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- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
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- LBH Netherlands Bv - Netherlands
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- Price Waterhouse Coopers - Russia
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- Parliament of New Zealand
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- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Planning Commission, India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
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