Page 13 - AsiaElec Week 38

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coal-fired electricity till affordable storage
of power comes in a major way, Coal Indian
Limited (CIL) has said.
The company’s argument came in the wake
of a debate on the viability of coal-fired power,
when solar energy is gaining momentum as
it is environment friendly and considered
economical.
It can be seen from a typical load curve
in India that peak demand is post-5 pm and
coal-based power caters to that load, Coal
India Limited (CIL) Chairman Pramod
policy surrounding the importance of energy prices. Fitch expects coal prices to remain Agarwal said in a recent presentation to
for socio-economic development. low in the medium term - albeit with some investors.
In 2016, EGAT signed a Memorandum short-term volatility - due to a shift towards Coal-based electricity will continue to do
of Understanding with EDL to increase the generation from renewable sources. This will so till affordable storage of power comes in a
purchase of electricity from 7000MW to support generation companies’ dark spread major scale, he said.
9000MW. between tariffs and unit fuel costs, although “The effective cost of renewable energy
When Laos is in need of electricity, the widening in the dark spread will be partly is still high due to the intermittency versus
Thailand sells power back to Laos which is offset by a potential realisable tariff decline variable cost of thermal power. As fixed
transmitted through the same power lines. due to rising market trading volume. cost is already incurred and is sunk, better
As of January this year, Laos has been China’s market traded electricity rose by comparison is to look at fuel cost,” he said.
able to generate almost 5,000MW for export. 5.9% yoy to 1202.4TWh in 1H20, accounting The effective price of solar power is
Laos has signed electricity sales agreements for 35.8% of total power consumption, INR4-4.5 per kilowatt-hour which includes
with Thailand, Vietnam and Cambodia and higher than the 25.7% share in 1Q20. All of production cost, duties and trading margin,
is discussing the possibility of additional the Fitch-rated power generators are selling while the “variable” cost for thermal power is
exports. more electricity under the market trading INR2-3 per kilowatt-hour, Agarwal said.
mechanism to drive sales volume, which put CIL remained optimistic about the future
downward pressure on their realised coal- of the dry fuel and said that its 110 ongoing
fired tariffs. projects with peak capacity of 750 million
GENERATION Fitch rates three of top-five stated-owned tonnes are under implementation.
power generators: China Huaneng Group Co., Altogether 18 mining projects that have
High capex to limit Chinese Ltd. (Huaneng, A/Stable), China Huadian been cleared by CIL in FY20 have a rated
Corporation Ltd. (Huadian, A/Stable) and
capacity of 132.04 million tonnes per year.
generators’ deleveraging - State Power Investment Corporation Limited
(SPIC, A/Stable). The three companies
Fitch increased capex in 1H20 due to acceleration RENEWABLES
in renewable-energy investment. The
Chinese power generation companies’ investments were driven by the need to
leverage will remain high in 2020 as they step improve their fuel mixes, and to secure wind- World Economic Forum
up investments in renewable energy, which power subsidies before the end-2020 deadline.
will offset higher margins following lower fuel Thermal power accounted for 72%, and IRENA partner for
costs, Fitch Ratings says. 71% and 55% of the total power generation
Most Fitch-rated Chinese power generators capacity of Huaneng, Huadian and SPIC, sustainable energy future
saw revenues decline in 1H20 due to lower respectively, at end-2019. The increased
utilisation hours as national power demand capex in renewable energy reduces their risk The President of the World Economic Forum,
fell by 1.3%. National average utilisation exposure to coal price fluctuations in the Børge Brende, and the Director-General of
hours were 107 hours lower yoy in 1H20, medium to long term, but also pushes up their the International Renewable Energy Agency
and thermal power, which has lower dispatch debt levels. (IRENA), Francesco La Camera, signed a
priority, saw utilisation hours fall by 119 Memorandum of Understanding (MoU)
hours. alongside the 75th session of the UN General
Thermal power generators’ utilisation Assembly and the Sustainable Development
hours are highly likely to face more pressure COAL Impact Summit.
in the medium term, as they face increasing The Forum’s Energy Transition Index has
competition from power generated from Coal continues to be a key found that, without urgent stakeholder action,
renewable sources, including the start COVID-19 will compromise the transition to
of operations by China Three Gorges in India’s growth, says Coal clean energy.
Corporation’s (A+/Stable) Baihetan and And IRENA’s Post-COVID-19 Recovery
Wudongde hydropower stations. India Agenda shows that while renewables have
However, most power generation proven their resilience throughout the crisis,
companies had better EBIT margins in 1H20 Coal continues to be a key in India’s growth targeted policy action and investment in
compared with 1H19 thanks to weaker coal story as solar power is not as economical as energy transition can leverage socio-economic

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