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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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- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
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- Marubeni Corporation - India
- Star Paper Mills Limited - India
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- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
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- Latin American Coal - Colombia
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- IHS Mccloskey Coal Group - USA
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- Indian Oil Corporation Limited
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- Gujarat Electricity Regulatory Commission - India
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- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
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- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
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- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
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- New Zealand Coal & Carbon
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- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
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- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
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- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
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- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
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- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
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- Anglo American - United Kingdom
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- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
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- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
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- The University of Queensland
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- Economic Council, Georgia
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- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
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- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- White Energy Company Limited
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- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
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- Global Business Power Corporation, Philippines
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- Malabar Cements Ltd - India
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- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
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- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Parliament of New Zealand
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- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
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- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
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- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
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- Australian Coal Association
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
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- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
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