IEEFA Says New Coal Power Plants In India Will Become Stranded Assets

Published

3 years ago

September 4, 2021

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In theory, economics is pretty simple stuff. If Farmer A is selling apples 4 for a dollar and Farmer B is selling them 5 for a dollar, who you gonna call when you need apples? Farmer B, of course. You’d be crazy to pay more for apples than you need to, especially if you hope to resell them and become the Jeff Bezos of the apple world.

Now imagine you are a native of India and want to supply electricity to the teeming masses. You can either build coal-fired generating stations that cost more to operate or build renewable energy resources like solar and wind farms that cost less to operate. Once again, you’d be crazy to select the more expensive option, but that is just what India plans to do? Why? Because coal is like a religion and common sense rarely applies to theological discussions.

The Institute For Energy Economics And Financial Analysis says India is hell bent on building a fleet of new coal-fired generating stations — 33 gigawatts (GW) currently under construction and another 29 GW in pre-construction. All of them will wind up being stranded assets, says Kashish Shah, a research analyst at IEEFA. “Coal-fired power simply cannot compete with the ongoing cost reductions of renewables. Solar tariffs in India are now below even the fuel costs of running most existing coal-fired power plants.

“In the last 12 months no new coal-fired power plants have been announced, and there has been no movement in the 29 GW of pre-construction capacity. This reflects the lack of financing available for new coal fired power projects, and also the flattening of electricity demand growth, which has impacted coal the most.”

Despite such headwinds, the Central Electricity Authority still projects India will reach 267 GW of coal-fired capacity by 2030. That will require adding 58 GW of net new capacity additions, or about 6.4 GW annually.

IEEFA says it is “highly improbable” that the CEA’s projections will materialize, given the ongoing financial and operational stress in the thermal power sector, which means India’s coal capacity plans should be urgently revised.

“Any projections for India’s future generation mix should take into account that new coal-fired power plants are likely to become stranded assets,” says Shah. “The new capacity would only be economically viable if it replaced end-of-life, polluting power plants with outdated combustion technology and locations remote to coal mines.

“Even then, there would need to be sufficient coal plant flexibility to deliver power into periods of peak demand, and the time-of-day pricing would need to be high enough to justify the low over the day utilisation rates.”

Shah adds that without material growth in electricity demand, installing additional inflexible high-emissions baseload capacity will increase the financial distress of state-owned distribution companies by adding to their burden of paying fixed-capacity charges to thermal power plants that are used only sparingly.

The International Energy Agency’s road map for reaching net zero emissions by 2050 recommends no new investment in fossil fuel supply projects, and no further final investment decisions for new unabated coal plants. IEEFA notes there is little appetite from private investors to risk new capital in a sector that continues to carry US$40–60 billion of non-performing or stranded assets.

Only India’s state-owned Power Finance Corporation and Rural Electrification Corporation continue to tout new coal-fired power capacity, but that may have more to do with politics than economics. Nearly half of the 33 GW of capacity now under construction in India is sponsored by those state-owned companies. IEEFA suggests they should “walk away” from those “under construction” projects now to avoid the risk of them sitting idle after they are completed.

“Governments, investors and utilities across the globe are rapidly transitioning to cheaper domestic zero emissions renewable energy,” says Shah. “India should be taking advantage of the falling cost of renewables plus rising viability of battery storage, which can provide clean grid-firming, to meet incremental power demand.

“Accelerating renewable energy capacity commissioning is critical to lower India’s overall energy costs and support faster electrification of transportation and other industries. Ultra-low cost renewables would also enable development of a green hydrogen economy to strengthen India’s long-term objective of energy security.” Seems like basic economics to us.

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Cybertruck backlog runs out, Model S gets stuck, GM hits a sales milestone

Published

3 hours ago

November 5, 2024

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Cybertruck backlog runs out, Model S gets stuck, GM hits a sales milestone

On today’s episode of Quick Charge, Tesla’s Cybertruck is now available in Canada – and, like in the US, there’s no waiting! Plus, we’ve got an “actually” smart summon Tesla that’s actually stuck, GM reaches a sales milestone, and we get a brand-new title sponsor!

Today’s episode is the first with our new title sponsor, BLUETTI – a leading provider of portable power stations, solar generators, and energy storage systems.

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This ‘supercharger on wheels’ brings fast charging to you [update]

Published

5 hours ago

November 4, 2024

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This 'supercharger on wheels' brings fast charging to you [update]

Mobile car care company Yoshi Mobility launched a DC fast charging EV mobile unit that it likens to “a supercharger on wheels.”

November 4, 2024 update: Yoshi Mobility will only be charging EVs on the side of the road now – it announced today that it’s selling its fleet fueling operation to EZFill Holdings (Nasdaq: EZFL).

It was originally founded as a direct-to-consumer, mobile fueling business in 2016, but now it’s going to focus on mobile EV charging, virtual vehicle inspections for partners like Uber and Turo, and onsite preventative maintenance.

Bryan Frist, Yoshi Mobility’s CEO & cofounder, said, “By spinning off our fuel business and focusing all of our energy on solving hair-on-fire problems that fleet owners face, we are meeting the changing needs of enterprise customers while making the future of transportation safer, cleaner, and more sustainable.”

May 22, 2024: Yoshi Mobility saw that its existing customers needed mobile EV charging in places where infrastructure has yet to be installed, so the Nashville-based company decided to bring the mountain to Moses.

“We recognized a demand among our customers for convenient daily charging, reliable private charging networks, and proper charging infrastructure to support their fleet vehicles as they transition to electric,” said Dan Hunter, Yoshi Mobility’s chief EV officer and cofounder.

The company says its 240 kW mobile DC fast charger, which can turn “any EV” into a mobile charging unit, is the first fully electric mobile charger available. It can provide multiple charges in a single trip but doesn’t detail how they charge the DC fast charger or who manufactured it. (I asked for more details, and they replied that they won’t disclose client names or the manufacturer of its DC fast charger yet.)

Yoshi is launching its mobile charger on two GM BrightDrop Zevo 600s and will introduce additional vehicles throughout 2024. It aims for full commercialization by Q1 2025. (I wonder if the Zevo 600 ever charges itself? Yes, I asked that too.)

Yoshi Mobility says it’s already deployed its EV charging solutions to service “major OEMs, autonomous vehicle companies, and rideshare operators” across the US. Its initial customers are made up of large EV operators managing “hundreds” of light-duty vehicles requiring up to 1 megawatt of energy per day that don’t yet have grid-connected EV chargers. I’ve asked Yoshi for details of who it’s working with, and will update if they share that info.

The company says pricing is based on location and enterprise charging needs. Once under contract for service, the service will be deployed to US-based customers within 10 days.

To date, Yoshi Mobility has raised more than $60 million, with investments from GM Ventures, Bridgestone, ExxonMobil, and Y-Combinator in Silicon Valley.

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Marqeta shares plunge more than 30% on big forecast miss

Published

5 hours ago

November 4, 2024

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Marqeta shares plunge more than 30% on big forecast miss

Marqeta celebrates its initial public offering at the Nasdaq on June 9, 2021.

Source: The Nasdaq

Marqeta shares tumbled more than 30% in extended trading on Monday after the company issued weaker-than-expected guidance for the fourth quarter.

Here’s how the company did compared with Wall Street estimates, based on a survey of analysts by LSEG:

Loss per share: 6 cents adjusted vs. a loss of 5 cents expected
Revenue: $128 million vs. $128.1 million expected

While third-quarter results showed a slight disappointment on the top and bottom lines, Marqeta’s forecast for the current period was more concerning.

The payment processing firm said revenue in the fourth quarter will increase 10% to 12% from a year earlier. Analysts were looking for growth of more than 17%, according to LSEG.

Marqeta, which primarily functions as a card-issuing platform, attributed the guidance miss to “heightened scrutiny of the banking environment and specific customer program changes.” The company has been struggling for a while, and its stock is now down more than 80% from its peak in 2021, the year it went public. The stock was down 15% for the year prior to the report.

Total processing volume of $74 billion was up more than 30% from a year earlier. Net revenue and gross profit were up 18% and 24%, respectively.

Marqeta’s digital commerce business sells payment technology designed to detect potential fraud and ensure that money is properly routed. It also issues customized physical cards that look like a credit or debit card that can be used for point-of-sale purchases.

The company has been trying to break into the buy now, pay later business with a recently launched product called Marqeta Flex. The service brings BNPL from lenders such as Affirm or Klarna to any credit card wherever Mastercard and Visa are accepted.

“It’s an orchestration layer, but it’s tied to issuing and processing and disputes and chargebacks,” CEO Simon Khalaf told CNBC at Money2020 in Las Vegas last week. “So it is not actually a Wild West in BNPL. It is actually very well established. And there is a reason why a lot of people are jumping to it.”