Renewables will need to compete on upstream benefits like tax revenue, foreign exchange savings, and energy independence to push coal out of the system faster.
Exactly! In my view they are risking a UK outcome versus a Norway one currently, by not setting aside the funding for when coal runs out or is no longer cost-effective to use.
If you strip out all taxes and government charges (as well as interest income) from the Coal India accounts it is extremely profitable. In sterling terms, just over £6bn profit before government levies on just under £15bn of sales - a 42% margin, so there is scope for a lot of reduction in price if there is a desire to compete with solar.
Though I dont know at all what taxes solar has to pay in India, or what its margins are.
My thoughts exactly when going through their filings. Reminds me a bit of Brett Christopher's work on more profits to be made in fossil fuels than renewables - I think that's just because renewables aren't cheap enough yet to have this much baked in profit compared to coal.
Renewables currently have some subsidies/supports (as does coal according to an interesting analysis by IISD). I had a brief look into whether the profits of solar manufacturers can compare and they didn't seem nearly as large (though there isn't the same CIL equivalent to look into for solar). It is still an early industry and potentially operating break-even or at a loss in order to grow and gain share. It may get there in future but China's solar bankruptcies don't offer too much hope on that front. Certainly worth digging into more.
it's all a bit like the UK and Norway and North Sea oil revenues really, except that it's India and coal!
Exactly! In my view they are risking a UK outcome versus a Norway one currently, by not setting aside the funding for when coal runs out or is no longer cost-effective to use.
If you strip out all taxes and government charges (as well as interest income) from the Coal India accounts it is extremely profitable. In sterling terms, just over £6bn profit before government levies on just under £15bn of sales - a 42% margin, so there is scope for a lot of reduction in price if there is a desire to compete with solar.
Though I dont know at all what taxes solar has to pay in India, or what its margins are.
My thoughts exactly when going through their filings. Reminds me a bit of Brett Christopher's work on more profits to be made in fossil fuels than renewables - I think that's just because renewables aren't cheap enough yet to have this much baked in profit compared to coal.
Renewables currently have some subsidies/supports (as does coal according to an interesting analysis by IISD). I had a brief look into whether the profits of solar manufacturers can compare and they didn't seem nearly as large (though there isn't the same CIL equivalent to look into for solar). It is still an early industry and potentially operating break-even or at a loss in order to grow and gain share. It may get there in future but China's solar bankruptcies don't offer too much hope on that front. Certainly worth digging into more.
Thank you