Development of Coal-Fired Generation: Evaluating the Utility Credit Implications .


66 views
Uploaded on:
Category: Product / Service
Description
Development of Coal-Let go Era: Assessing the Utility Credit Suggestions. Ellen Lapson, Overseeing Chief Fitch Evaluations, Utilities, Power and Gas July 17, 2007. Diagram: Assessing Electric Organization Credit.
Transcripts
Slide 1

´╗┐Development of Coal-Fired Generation: Evaluating the Utility Credit Implications Ellen Lapson, Managing Director Fitch Ratings, Utilities, Power & Gas July 17, 2007

Slide 2

Overview: Evaluating Electric Company Credit Fitch\'s emphasis is on the continuous income soundness or instability prone to come about because of many sources, including: Sector condition and macroeconomic patterns Market establishment and client request attributes Fuel and power supply Physical resources; benefit quality Capital venture necessity Regulation and duty setting; political condition Financial asset and liquidity

Slide 3

Investment Environment Sector Trends Dwindling limit edges Transmission blockage Aging power foundation New ecological controls Pressure on normal gas supply RISING CAPEX

Slide 4

Investment Environment Sector Factors, kept RISING CAPEX Competition for work, hardware and materials Energy item costs rising excessively Rising negligible cost Unfavorable verifiable points of reference amid High capex Rising peripheral cost per kwh

Slide 5

Investment Environment Macro Environment Transitional stage in the budgetary markets Inflation may quicken Long-term obligation cost liable to rise Potential outcomes: bring down value costs and more extensive credit spreads, raising general WACC

Slide 6

Known Risks Construction cost acceleration Construction postpones Access to capital; higher monetary expenses amid development Change in fuel cost as opposed to contending powers over vegetation Evolving natural guidelines over life Tariff recuperation of costs Political response Demand value reaction Obsolescence; problematic innovation Financial and Operating Risk Assessment: New Utility Investment GENERIC CASE

Slide 7

Known Risks Construction cost heightening Construction defers Access to capital; higher money related costs Change in cost relationship versus contending fills Evolving natural benchmarks Tariff recuperation of costs Political response Demand value reaction Obsolescence; problematic advancements Higher $ per KW Long improvement and development time Uncertain long haul working execution Financial and Operating Risk Assessment: New-Tech Coal Baseload Power Plant Hi-Tech Pulverized Coal or IGCC

Slide 8

Known Risks Construction cost heightening Construction postpones Access to capital; higher budgetary costs Change in cost relationship versus contending fills Evolving ecological guidelines Tariff recuperation of costs Political response Demand value reaction Obsolescence; troublesome advancements Higher $ per KW Long improvement and development time Uncertain long haul working execution Financial and Operating Risk Assessment: New Tech Coal Nuclear Base Load Power Plant New Nuclear Plant

Slide 9

Known Risks Commodity value instability Shortage of limit Tariff recuperation of costs No arrival on speculation, best case scenario, only a recuperation of costs Political response to unpredictable expenses or power deficiencies Financial and Operating Risk Assessment: Don\'t Build; Rely on Market Purchases Doing nothing additionally has dangers, yet less capital is in question.

Slide 10

Known Risks Construction cost acceleration Construction defers Liquidity and financing costs Change in cost relationship versus contending fills Evolving ecological measures Tariff recuperation of costs Political response Demand value reaction Obsolescence; troublesome advances Higher $ per KW Long improvement and development time Uncertain LT working execution Risk Mitigation Utility Management Balanced vitality sources Engineering & extend oversight Conservative subsidizing system Regulatory and authoritative arrangement Pre-confirmation of need Pre-endorsement of recuperation Include development work in process (CWIP) in duty Lower outer subsidizing Lower extreme cost Avoid rate stun at plant business operation Financial and Operating Risk Assessment: Risk Mitigants

Recommended
View more...