绿色金融与发展中心-中国主导的巴基斯坦和越南燃煤发电厂早期淘汰融资的机会（英）-2024.3_市场营.docx

ExecutivesummaryPrevalentliteratureassumesthatcoal-firedpowerplants(CFPP)inAsiaaredifficulttoretireduetotheirrelativelyyoungage.ThisstudyevaluateshowthefinancialvaluesofsixChinese-sponsoredcoal-firedpowerplants(CFPP)inPakistanandVietnamareimpactedthroughearlyplantretirementunderdifferentfinancingandeconomicscenarios.Contrarytocommonassumptions,theresultsindicate: ForallsixplantsinVietnamandPakistan,ourmodellingshowedanincreaseinenterprisevaluewithAssetZPortfoIioRefinancingthroughearlyretirement; Whenrefinancingisbundledwithrenewableenergyinvestments,theenterprisevalueswouldmorethantriplecomparedwiththevalueoftheoriginalpowerpurchasingagreement; Accordingly,investorscouldbenefitfinanciallyfromearlyCFPPretirement; Youngerplantscanshavemoreyearsofftheircommerciallifetimeandberetiredearlierduetohigherrelativedebtburdenandhigherfinancingcostsduringtheearlyyearsofoperations; InPakistanwithitsveryyoungCFPPs,refinancingwouldallowtheretirementofthethreeplantsseventonineyearsaheadofschedulewhileimprovingenterprisevalue.Basedontheresults,thisstudyrecommendsthatChinesecompanies,financialinstitutionsandotherinvestorsengagedinoverseasCFPPsconsiderreducingtheirCFPPexposurebyshiftingtorenewableenergyinvestments.EnterprisevalueandfeasibilityofCFPPretirementbundledwithrenewableinvestmentwouldfurtherimprovethroughconcessionalloans,creditenhancementmechanismsandinnovativefinancinginstrumentssuchasdebt-for-climateswapsinvolvingChineseCFPPsponsors.Note:datawerecollectedasofJanuary2023.Theanalysesanddiscussionsectionofthestudywasdraftedinthethirdquarterof2023andfirstpresentedpubliclyduringtheWorldEnergyForum(WEF)inNovember2023.Resultsandfindingsmaychangegivennewnationalpolicies,financialandeconomicconditions.1. IntroductionEarlyphase-downofal-firedpowerplants(CFPPs)isdiscussedinemerginganddevelopedcountriesgloballyasasolutionforreducingemissionsfaster?OrganisationforEconomicCooperationandDevelopment(OECD)countriesandtheEUhavetakentheleadinphasingoutcoalandretiringexistingCFPPs,with56percentofoperatingcapacityeitherclosedalreadysince2010orscheduledtocloseby2030.2Inemergingeconomies,particularlyacrossAsia,wheremostofthenewadditionsofCFPPshavetakenplaceoverthepast15years,3severalinitiativeshavebeenlaunchedtosupporttheearlyphase-downofCFPPs: EnergyTransitionMechanism(ETM)waslaunchedin2021bytheAsianDevelopmentBank(ADB)asapublic-privatefinancevehicletoexpeditetheretirementorrepurposingoffossilfuelplantswithintheAsiaandPacific.InApril2023,ADBannouncedthat,thepriorityforPakistanistotransitionawayfromoil-anddiesel-firedpowerplants,althoughcoal-firedpowerplantswilllikelybeaddressedaspartofETM,spre-feasibilitystudy".ADBcompletedthepre-feasibilitystudylastNovember2023.Inthesameupdate,ADBmentionedthatitTheASEANTaxonomyforSustainableFinancereleasedinMarch2023includescoalphase-outactivitiesinthePlusStandardsframework.Itcategorisescoalphase-outinto"green"iftheCFPPsachievephase-outby2040and"amber"iftheCFPPsachievephase-outby2050(formoredetailspleaserefertotheoriginaldocument).4,conductedapre-feasibilitystudyin2021andisindiscussionswithkeyministriestoinitiateafullETMfeasibilitystudy". JustEnergyTransitionPartnership(JETP)waslaunchedin2021atCOP26inGlasgowwithagoaltoexpandpublicandprivatefinancingforequitableenergytransitionsofemergingeconomies.JETPisfinanciallysupportedmainlybytheinternationalpartnersgroup(IPG)comprisingFrance,Germany,theEuropeanUnion,theUnitedKingdomandCanada,andprivatefinancialinstitutions.Todate,fourcountrieshavejoinedJETP:SouthAfricain2021,IndonesiaandVietnamin2022,andSenegalin2023. AcceleratingCoalTransition(ACT)launchedin2021isacomprehensiveprogramdesignedtoassistcountriesintransitioningawayfromcoal.ACToperatesasamulti-multilateraldevelopmentbank(MDB)financingplatformundertheClimateInvestmentFunds(GIF).TheprogramhasreceivedsubstantialfinancialbackingfromtheG7,whopledgeduptoUSD2billion. GlasgowAllianceforNetZero(GFANZ)inJune2023haspublishedguidanceformanagedcoalphase-out(MPO)inAsia-Pacific,whichwasdevelopedincollaborationwithlocalfinancialandpolicystakeholders,aswellasknowledgepartners.5 MonetaryAuthorityofSingapore(MAS)in2023evaluatestheinvestmentinblendedfinanceinstrumentstoprovidefinancingforacceleratedphase-downofcoal-firedpowerplantsintheAsianregion6andhasintroducedtransitioncreditsasacomplementaryfinancingmechanism"toaccelerateandscaletheearlyretirementofCFPPs",7However,atthispoint,theearlyphase-downofCFPPsinemergingeconomiesisstillconsideredachallenge.First,manyemergingeconomieshaverapidlygrowingelectricityneeds:EmergingAsianenomies,electricityneedsareprojectedtogrowabout3to5percentperyearduetopopulationgrowth,economicgrowth,andtheelectrificationofindustryandtransport.8ThismakestheretirementofexistingpowergenerationunitsmorechallengingassignificantinvestmentsinrenewableswouldbeneededtogrowtheelectricitysectortomeetdemandwhilesimultaneouslycompensatingforthegenerationcapacitylossthroughCFPPretirement.Second,thereisabeliefthatuingeneral,theolderaplantis,thecheaperitwillbetoretirebecausemoreofitsinitialinvestmenthasalreadybeenrecouped".19AsmanyCFPPsinemergingeconomiesarerelativelyyoung(e.g.,theaverageageinVietnamis6.7yearsand10.8yearsinIndonesia,comparedtomorethan40yearsintheUS)3,theirearlyretirementisregardedascostly.AthirdchallengeistheroleofChina'sstate-ownedenterprises(SOEs)andstate-ownedfinancialinstitutions(SOFIs),whohavebeenamongthetopsponsorsofCFPPsinemergingAsiabuthavenotbeenincludedinanyoftheconsiderationsintheregion.10-11ThisstudyaddressesthethreechallengesbyanalysingthefinancialcostsandopportunitiesofChina-sponsoredCFPPsinVietnamandPakistanandexpandsonpreviousstudiesthatusedrepresentativemodelplantswithgeneralisedassumptions.10Weusedfinancialandoperationaldataofsixoperatingcoal-firedpowerplants(threeinPakistan,andthreeinVietnam)tocalculatetheirenterprisevalueswiththediscountedcashflowmethod.12WealsobuiltthreefuturescenariostomodelexternalrisksonfuturecashflowsoftheCFPPsandpotentialearlyretirementoptions(forexample,CFPPretirementonlyvsre-investmentintorenewableenergyprojects).Furthermore,insteadofmodellingretirementoptionsthatrelyonfinancefromahypotheticalpriceforavoidedcarbonemissions,thestudyutilisedachievablefinancingstructurestoestablishretirementoptions.Finally,theresultsofthefinancialvaluesandprojectionsoftheearlyCFPPretirementprogramsweresupplementedbyanadditionalscenariothatfactoredinrenewableenergy(RE)alternatives.TheresultsshowthatinvestorscouldbenefitfinanciallyfromtheearlyretirementofCFPPs.Contrarytopreviousbelief,thefeasibilityofretiringyoungerplantsishigher,asyoungerplantshaveahigherdebtburdenthatleadstohigherfinancingcostsduringtheearlyyearsofoperations.Onceaplantbecomesolderanditsdebtispaidoff,moreofitsrevenuesbecomeprofits,diminishingthepotentialgainsofearlyretirement.Furthermore,theresultsshowthatwhencombiningtheretirementofCFPPswithinvestmentintoRE,enterprisevaluesforinvestorswouldatleasttriplecomparedtocompletingtheoriginalPPA.2. Thecontextofcoalpowerphase-down2.1 GlobalenergytransitionandcoalretirementtrendsEnergytransitioninpowergenerationincludesthephase-downoffossilfuels,expansionofREcapacities,energystorageandgridinfrastructure.Manycountrieshavepledgedthroughjointinitiativesorself-declarationtoreducedependenceoncoalpowerandincreasefinancialsupportforRE(Figure1).Figure1:EnergyTransitionInitiativesAroundtheWorldRMifDAtMSinesRnpanmefAS)of1.neiasdeRxtaBiEDPrepurposedto1.256MWcoalfadrintoagreenhydrogencomplexundertheFASProgram*hchprovidedreski*andUPSkBntrainings,andsocialandpsyddogjitrainingforaffectedWOrfcefISmCiiJnPIPGComitted25bnthroughgrants.SUtoidtes.concessionalloa.guarantees,exported½.andTAsgearedtowardsmodernizinandsbzinthegridandiwsingREopacityto40%dpowermW2O3aQnGrh三t11Bta11d(HnRrtnentipnstounlockOmeseinvestmenttoward,-fcaonanIMNETMhKENinPhippinesembarksonkscwETMtoaccelerateretirementof5yearOid246MWCFPPSnECPI«32040-15warsaheadofenddteChlifeMMghcombinationofdebtrefinancingandequity.WthsupportofTransitionGeditsOCfcSpushto2O3QlaunchedJustTransitionProgramwithsupportoCATA.AD85ee的11MegismIElMIADlaunchedtheETMtoindudeIndonesa.PhilippinesVietnamwiththepurposeofr±itsngPUbfiCQiYateinvestmentstoretirecodpowerassetsaneafSerschedulethaniftheyremainedIwiththeircurrentownersandreplacewithMaTaskFarefarSUStinaHeJustTransiticnThestategovernmentofJharichand.the才Coaiproducingstate,hasformedaTaskForceforSusUinaUekmTramiticntostudytheeffectsoftheenergytransition,assessthemagnitudeofJna(XeIerMedcoalphaseoutanditsimpactOnworkersandcommunitiesandidentifyopportunitiesingreensectorsand'sustwuUefinandIndanabJnPToolof$20bninconcessionaltoamandgrantsfromG7countriestosupportlrxkxws4,sincreaseOfR£Idreductionofrelbnc*onfossilfuck.MonetayMtwdtydSv4mGreGvtnnRindpiesforTrmittonCatnnCfedbSeSngcxrthowhigh-integrityCarbOnedtsTra11sitionCreAarhingfromthee(issionsreducedthroughretirinaCFPPeartyandrepbcingwithCfeanerenergysources,canbeUtifaedaccrplemwtarfinancinginstrumenttoacceierxe*xJscaletheearlyMrewmofCFPPs.SKUrHntainUSUtiWts依Uerace-paywbackedbondswhoseproceedsfinancepUrecoveryforCOal曲114andreinvestinChNper÷deane(tech.F3ECoal,peatandoilshaleNaturalgas$125minlow-interestfinancingfromIntef-AmeckanDewtopmentbank.OwnTechnologyFuxtandChineseRJMforCo-AndngtoWgEngfemonetizeth?GHGreductionsfromearlyretirementof602MWofcipb11tsMXjbufingdISlMWOfiwwwindcapadty.mJiBtTr三ritiMedran(11MTheEUIaschedtheJTMtoprovide29bnWCfThofprvxe-ectorinvestment,andpubk-ectkunfacilityfa附Cy(MdcetoSUPPOntheZtoritiinEUclreborn.ScuthAIricaCTPG7countriesiaurhedaJETPprogramtoprovide$85bntoSUPPorTSo(XhAfrica'spathwaytoalewcarbeconomyanddimateresiiie11tsocietyvjusttransitionanddecarc11iztio.AsnZmEfTtssianCvuity(AZEQbunchedbyJapanin2022andgathers10countriesintheAPACregkx,Rrovidesvenuefoesharingifo1111atioonvariousmotivestodecarbonizewthuseofRE.EECCUjammonkett,Ve<remJ1.TPG7countriesprovideatotalof$15.5bnthroughgrantsandconcessionalloanstosupportVietnam'sknvmsioanddi11teresirtdevelopcnenttransmissionupgrades.HdecarbcrtzationOfefeCtriCitySystefninandaiAftaefurNetZefD(GFANZ)GuiMvdPheraMDrWtQidedfmtOhelPfirUndaliaiticmIndenUndhewtokiendfyandfwuncecoalretjre<ne11tPumthateateapositivedknateintandanMvejusttransition.Source:AuthorsDespitebeingthebiggestsourceofgreenhousegases(seeFigure2)amongthermalpowergenerationsources,coalremainsamajorsourceofelectricityindevelopingAsia(Figure3)duetoitslowcosts.Asaconsequenceofthedecreasingcostofalternativeenergies,operationsofexistingCFPPshavenotonlynegativeclimateeffectsbutalsoincreasedeconomiccosts,givenitisnowcheapertoproduceelectricityviarenewablescomparedtocoal-firedpowerplantsonaperkwhbasis13.Inaddition,previousvolatilityofcoalandothercommoditypricesgloballymadecountriesrealisethathighdependenceoncoalwillnottranslatetosavingsinthelongrun.Figure2:ShareofGHGemissionsandtotalenergysupplybyproduct,World,2021TouienergysupplyGHGCrnWionSOilBiofuelsandwasteNuclearOtherSource:InternationalEnergyAgency,202114Toreducethevolatilityofenergycostsandhighclimateemissions,interestinthe"earlyretirement"ofCFPPshasbeenincreasingasseenintheriseinthenumberofvariousregionalandglobalprograms(seeFigure3).Nevertheless,globalcoalpowercapacitycontinuestomaintainanetgrowth.Figure3:Shareofelectricityproductionfromcoalin2022Nodata0%10%20%30%40%50%60%70%80%90%100%Source:OurWorldinData2022'sEarlyretirementofCFPPsindevelopingAsiaisevenofexistingfleetsandtherapidlygrowingelectricitymoreofanuphillbattleduetotherelativelyyoungagedemandforcheapandstablepower.Figure4:GlobalcoalpoweraddedvsretiredSource:GlobalEnergyMonitor32.2China'sinternationalcoalpolicyChinahasadualroleastheworld'slargestconsumerandproducerofcoal,aswellasamajorpublicfinancierofCFPPsandexporterofcoal-relatedtechnologies,suchasboilers,turbines,andgenerators.Itishometohalftheworld'soperatingcoalcapacityand57percentofpre-constructioncoalpowerprojectsasof2022.China-fundedCFPPsareheavilyconcentratedinSouthAsiaandSoutheastAsia,whichaccountfor88percentofChina,soverseascoalinvestmentasof2022.Asof2020,thetopfivecountriesreceivingthissupport(inbillionUSD)fromthetwolargestoverseaslenders,ChinaDevelopmentBankandChinaExportandImportBankareIndonesia,Vietnam,SouthAfrica,Pakistan,andRussia.16AsmajorfinanciersofChina'soverseasenergyinvestmentarestate-ownedenterprisesandbanks,thepoliciesoftheChinesecentralgovernmentandministriesplayakeyroleinguidingtheirpractices.Since2013,China'spoliciesregardingenvironmentalandsocialstandardsinBRIinvestmenthavebecomemorestringent,suggestingcompaniesfollowstricterinternationalorChinesestandardsinsteadofhostcountries'principlesandimprovingESGreportingstandards(Figure5).In2021,PresidentXiJinpingannouncedthatChinawouldnotbuildnewcoal-firedpowerprojectsabroad.Figure5:China'soverseasenergyinvestmentbytechnologyandenvironmentalgovernancepoliciesMOKOMNDRC.M.MOfCOMMQKQMfMfEGudlnsforECSlinvmnandCooprt>onWK,MOKOMiViiionandAc>onsonJOGVyBu.WiA<S4kRoadFcooomc6<W21stCenturyM*fft>nrvSlRo>d1GudmgandRgut)gOvrj>flnvsmnSeNCQV2Gu>d<OPno)3onPWnOtGgCoa11WCVOHFGrn*Qn<B«：t0nRo>d*IMU.MOfCOMG-0v<op11ntGsd8cs8F91n11v<fmtntndCooprtonNqnwcoatinvestmentvWSnnu11CH4ntCoop<r>tHand8svw6Prj<Opt11om8tMJontlmferrnutonofGrzc。11OPEmtsIht8NKRo>dwwNote:Reddotmeansthepolicyfollowshostcountryprinciples;GreendotmeansthepolicyfollowsitemationalChineserulesSource:Authors2.3Vietnam:PowersectorcontextandpolicyVietnam'spowerindustryisunderthejurisdictionoftheMinistryofIndustryandTrade(MOIT).UnderMOIT,theElectricityRegulatoryAuthorityofVietnamoverseessectorregulation;severalotherbranchesoverseepolicy,researchandplanning.Vietnam'spowersectorhasacoal-dependentsupplystructure.In2022,Vietnam'stotalinstalledcapacitywas76GW,dominatedbycoal,naturalgasandhydropower;however,theshareofcoalhasdecreasedslightlysince2019asaresultofgrowthinsolarandwindinstalledcapacity(Figure6).17Figure6:HistoricalinstalledcapacityforelectricitygenerationinVietnamIMDlZXdsPd=etswimportedfrom1.aosSolarWindHydroBiomass÷otherOilGasCoalAccordingtoGlobalEnergyMonitor,abouttwo-thirdsoftheoperatingandunder-constructioncoalpowerunitsinVietnamarestate-owned,mostlybyElectricityofVietnam(EVN).EVNisalsothelargestbuyerofelectricityinVietnamandholdsamonopolyontransmissionanddistribution.19BasedonGlobalCoalProjectFinancedatain2022,thetotalfinancesecuredforVietnamCFPPsisaroundUSD20billion,themajorityofwhichisbackedbydebtfromChinesebanksandtheseCFPPsform16percentofthecountry'stotalpowersupply(Table1).Table1:1.atestlistofChina-backedCFPPsinVietnamCFPPTechnologyCapacity(MW)CODAge(year)CoalSupplyMaoKhePSCFB4402012111.ocalAnKh