India power sector should prepare for climate transition risks
Coal Insights|May 2021
Domestic thermal power sector should prepare itself for the impact of the country’s climate transition scenario of 450GW of renewable energy capacity by 2030, a new report by IEEFA has said.
India power sector should prepare for climate transition risks

With higher renewable generation displacing coal-based power in India, the thermal power producers will get negatively impacted by drop in potential revenues and costs from the sale of coal-based power as assumed in the business-as-usual scenario, said a report authored by Gireesh Shrimali, scholar from Precourt Institute for Energy at Stanford University.

“This would impact equipment suppliers, generation asset owners and consumers paying the bills, as well as the financial institutions supporting these now stranded or underutilized assets,” Gireesh said.

The financial impact can be captured in reduced operating income, also known as earnings before interest, taxes, depreciation, and amortisation (EBITDA). Reduced EBITDA then means reduced cash flows, reduced operating life and hence reduced valuations.

Climate change risks

Climate change has created financial risks for business. These can be broadly categorised as physical and transition risks.

Physical risk is essentially the impact of a changing climate on revenues as well as costs.

A simple example is higher real estate operating costs due to increasing damages from floods due to rise in average global temperature. For a real estate portfolio, this could result in lower valuations due to anticipated higher costs.

Transition risk, on the other hand, is the financial risk due to changing policies, technologies, and markets.

For example, a business may be planning to operate under a scenario by a particular year, whereas future policy changes may result in a different scenario by that time, which may impact the planned revenues and costs. This is true for power producers reliant on coal power generation, as we discuss below.

Bu hikaye Coal Insights dergisinin May 2021 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

Bu hikaye Coal Insights dergisinin May 2021 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

COAL INSIGHTS DERGISINDEN DAHA FAZLA HIKAYETümünü görüntüle
SCCL's coal production up 64% in Q1
Coal Insights

SCCL's coal production up 64% in Q1

Coal production by SCCL during Q1 FY22 stood at 15.57mt, 64% higher than 9.50 mt achieved in Q1 FY21.

time-read
2 dak  |
July 2021
The UK to end thermal coal use in October 2024
Coal Insights

The UK to end thermal coal use in October 2024

The deadline to phase out coal from Great Britain’s energy system has been brought forward by a year as part of the UK government’s decision to go further in driving down emissions and tackling climate change.

time-read
8 dak  |
July 2021
Coal handled by major ports up 38.5% in Q1
Coal Insights

Coal handled by major ports up 38.5% in Q1

The 12 major Indian ports handled 39.37 million tons (mt) of coal (thermal + coking) during April- June of FY22, up by 38.5 percent from 28.42 mt recorded in the corresponding quarter of FY21, according to data released by the Indian Ports Association (IPA).

time-read
1 min  |
July 2021
Cement sector sees demand revival
Coal Insights

Cement sector sees demand revival

Retail demand was under pressure during the first two months of FY22 with April and May production falling by 12 percent and 17 percent respectively month-on-month (m-o-m) as per Index of Industrial Production data.

time-read
3 dak  |
July 2021
Indian Railways' coal handling up 42% in Q1
Coal Insights

Indian Railways' coal handling up 42% in Q1

Indian Railways in April-June of FY22 transported 157.78 million tons (mt) of coal, up by 42.4 percent from 110.80 mt handled in corresponding quarter of FY21.

time-read
1 min  |
July 2021
CIL's coal production up 2.4% in Q1
Coal Insights

CIL's coal production up 2.4% in Q1

Coal India’s (CIL) coal production during April-June quarter (Q1) of FY22 was up by 2.4 percent to 124 million tons (mt) as compared to 121 mt achieved during the same quarter last fiscal (FY21), according to (provisional) data released by the company.

time-read
1 min  |
July 2021
Coal Insights

India's May coal imports up 20% y-o-y

Coal and coke imports in May 2021 were up 20.44 percent year-on-year (y-o-y), according to import data available with Coal Insights. Imports rose to 19.92 million tons (mt) from 16.54 mt during May of previous year.

time-read
1 min  |
July 2021
There is still a long way to go to squeeze coal out: BP
Coal Insights

There is still a long way to go to squeeze coal out: BP

There are worrying signs that last year’s Covid-induced dip in carbon emissions will be short lived as the world economy recovers and lockdowns are lifted, says Bernard Looney Chief Executive Officer of BP in the recently published Statistical Review of World Energy 2021 published by the company.

time-read
4 dak  |
July 2021
“Growing Infrastrcuture is a big opportunity for OTR Tires in India”
Coal Insights

“Growing Infrastrcuture is a big opportunity for OTR Tires in India”

India is now considered to be the largest market for Off-the-Road Tires (OTR) used in construction & mining industry. The opening up of the coal sector has provided further push to the potential usage of such tires. And Balkrishna Industries Ltd, a global player with diversified portfolio under the BKT brand across agriculture, industrial, construction, earthmoving, mining and port is set to seize the opportunity. Rajiv Poddar, Joint Managing Director, Balkrishna Industries Ltd., tells Arindam Bandyopadhyay of Coal Insights about the opportunities and outlook for the sector and the company.

time-read
6 dak  |
July 2021
SCCL's coal production up 69% in May
Coal Insights

SCCL's coal production up 69% in May

After putting up a dismal performance last year, Singareni Collieries Company Ltd (SCCL) has started the new fiscal on a high note. Coal production by SCCL in May 2021 surged to 5.44 million tons (mt), about 68.56 percent higher than 3.23 mt achieved in the same month last year, according to (provisional) data released by the company.

time-read
1 min  |
June 2021