Just found another article. 40.2% vs 42%

https://www.ctc-n.org/technologies/pulverised-coal-combustion-higher-efficiency

Steam cycle Subcritical Supercritical Ultra-supercritical (best available) Ultra-supercritical (AD700)
Steam conditions 180 bar (540oC) 250 bar (560oC) 300 bar (600oC) 350 bar (700oC)
Net output (MW) 458 458 456 457
Net efficiency (%) 40.2 42.0 43.4 45.6
CO2 emissions (t/MWh-net) 0.83 0.80 0.77 0.73

I will stop here, VIN3133

margin of safety should be a good tool now.

Why make thing complicated? Just let those who are not comfortable with the estimate take whatever discount they like

Aseng, You want to be sure you need to know the full specification of the designs of the power plant of both JHDP and Vinh Tan 1. Don't simply make assumptions, we can be very wrong.

Aseng, I do not wish to get into this discussion again. Too many assumptions.

Aseng, you haven't consider the higher O&M costs for supercritical design
----------------
DK66 Supercritical design has higher O&M cost which will offsets part of the benefit of cost savings over subcritical design. Each USD10 increase in O&M will results in annual extra cost of USD12m.

Coal has long been the workhorse of the power generation market. It may be in the twilight of its reign as environmental policymakers look to limit their reliance on coal-fired power, but its strong all-round financial characteristics will make coal economically competitive in the absence of high costs for carbon emissions or skyrocketing coal prices. O&M costs aren’t spectacularly low for coal, with the cheapest subcritical plants coming in at $43 per kW, the cost rising steadily through the more efficient supercritical and modern ultrasupercritical coal combustion technologies before arriving at $88 per kW in the case of the less-polluting and carbon capture-ready integrated gasification combined cycle (IGCC) plants.

A major driver for O&M costs at coal-fired plants is monitoring and servicing the many moving parts involved in the generation process, including turbines and generating sets, coal yard conveyors and handling systems. As coal power stations are often baseload plants, these components are often expected to operate continuously while being subjected to heavy loads and high temperatures, as well as varying levels of dust, dirt and moisture. Innovations in predictive maintenance and asset optimisation have helped bring down costs over the years, but O&M expenditure in this highly mature sector of the industry is now expected to remain stable through to 2035.

https://www.power-technology.com/features/featurepower-plant-om-how-do...
06/05/2020 3:58 PM

DK66 This article showed (page 5) that current supercritical design has an average of 10% (4 percentage point) higher efficiency than subcritical design, not 25%

https://www.worldcoal.org/file_validate.php?file=Cornerstone_Volume3_I...
06/05/2020 4:51 PM

I do not agree on the 18% higher fuel cost as the difference in efficiency is only 10%
-----------------
Aseng DK66,

Any comment on my calculation and assumption
very kindergarten ?

Probability, I think we have debated enough. We will not get very far. Figures from different sources suggested different scenario. By taking average itself is an assumption. If possible we need to go very technical into Vinh Tan and JHDP power plants specific designs which is beyond my expertise.

Our debate, if continue, will get more aggressive as we are now arguing on which piece of information to rely on. We should stop here. I want to keep a good working relationship with you.

We have shown the readers here enough data for their judgement.

Once again, I thank you for your discussion. Very fruitful indeed.

Maybe Aseng has the solution - 10% discount. Maybe you could apply more.

Probability, we are getting deeper and deeper into unknown which we assume we know. Well, maybe you do but I m an accountant. I get my knowledge from reading. I won't simply argue against your knowledge but you must recognise that you are making assumption too. Too much assumptions will come to nothing.

Probability, the article says subcritical 33-39% and supercritical 38-42%

---------------------------
probability Not sure what you are trying to say. let me clarify:

Say your subcritical plant efficiency is 33% and your supercritical is at 43%.

Probability, we are not expert and we learn from internet. We can only rely on what we come to knowledge. The article is dated 2014 which is not old.

The main technical challenge with supercritical plants is that the higher steam pressure and temperature require components (superheaters, headers, water tubes, steam chests, rotors and turbine casings) which are produced from nickel-based alloys. Nickel is an expensive commodity. Hence, I don't find it hard to believe that higher and newer technology entails higher O&M costs.

I won't say there is zero O&M cost in first year of operation. There is an annual maintenance period of 15 - 30 days.

This article showed (page 5) that current supercritical design has an average of 10% (4 percentage point) higher efficiency than subcritical design, not 25%

https://www.worldcoal.org/file_validate.php?file=Cornerstone_Volume3_Issue1.pdf

Supercritical design has higher O&M cost which will offsets part of the benefit of cost savings over subcritical design. Each USD10 increase in O&M will results in annual extra cost of USD12m.

Coal has long been the workhorse of the power generation market. It may be in the twilight of its reign as environmental policymakers look to limit their reliance on coal-fired power, but its strong all-round financial characteristics will make coal economically competitive in the absence of high costs for carbon emissions or skyrocketing coal prices. O&M costs aren’t spectacularly low for coal, with the cheapest subcritical plants coming in at $43 per kW, the cost rising steadily through the more efficient supercritical and modern ultrasupercritical coal combustion technologies before arriving at $88 per kW in the case of the less-polluting and carbon capture-ready integrated gasification combined cycle (IGCC) plants.

A major driver for O&M costs at coal-fired plants is monitoring and servicing the many moving parts involved in the generation process, including turbines and generating sets, coal yard conveyors and handling systems. As coal power stations are often baseload plants, these components are often expected to operate continuously while being subjected to heavy loads and high temperatures, as well as varying levels of dust, dirt and moisture. Innovations in predictive maintenance and asset optimisation have helped bring down costs over the years, but O&M expenditure in this highly mature sector of the industry is now expected to remain stable through to 2035.

https://www.power-technology.com/features/featurepower-plant-om-how-does-the-industry-stack-up-on-cost-4417756/

Aseng, RangerJ is definitely a man with deep knowledge of coal power plants

Aseng, you are right. So far the only credible comment is fom probability on the efficiency difference. I will try and hopefully find a credible way to quantify the monetary effect of the impact.

I appreciate the contribution by Probability. Thank you

Lantern42, You are welcome and thank you

---------------
Lantern42 Hello DK. Thank you so much for your answers. We are all lucky to have such an astute investor like you. Also thanks to Mr Ooi Teik Bee for sharing. I really don't understand why there are so many people who like to unnecessarily slam people just for fun. Mr DK and Mr Ooi, do please ignore them and continue your sharing. You are two are a bright example for all of us.
06/05/2020 1:26 PM

Aseng, good advice. Thanks

----------------
Aseng DK66,

do not need to create unnecessary unhappiness for yourself
it is not your job to convince everybody that the facts and figures that you had presented is true and correct , as long as it is reasonable , logical and make sense , it is already good enough.
your job is just to share honestly and truthfully to the best you can

RangerJ, Thanks again for the affirmation
---------------
RangerJ Hi DK66, Very kind words, thank you. As icon8888 mentioned, there is reliability (availability) guarantee on top of efficiency guarantee. Efficiency is not constant, as there will be degradation over the PPA period. Personally, I won't lose sleep over these matters at this point. Wishing you all the best. Thank you.

So far, I have not come up with my own personal estimates of the earnings of JHDP. All my previous evaluation methods including the latest one represent estimates from the application of methodologies nothing of my personal opinion. I have stated clearly the methodologies used, the assumptions made, the potential shortfalls. If one cannot provides a better derivation of estimates but judge my articles by virtual of personal opinion, which is more trustworthy ?

The valuation method itself is not perfect. I cautioned readers to read with care. Maybe some prefer the article is not written at all as some may not posses qualification to make judgement.

Calling too much sharing a sinful act ? I m speechless ..............

The final deadline for Unit 1 is 1st december 2020 with unit 2 deadline 31st May 2021. According to mong duong II and Vinh Tan 1, completion is expected to be about 5 to 6 months ahead of deadline. JHDP is impacted by Covid19, expected delay of 2 to 3 months from original schedule.

JHDP consists of 2 operating units each 600MW supported by 2 x 300MW boilers. I understand that such design would increase plant efficiency both in fuel consumption and emission.

It is my opinion that Unit 1 is likely to be operational in Q3 2020 and Unit 2 four months later.

As to profit contribution, please refer to my latest article for guidance. I do not have the right answer only estimates.

Thank you
-----------------------------
Lantern42 Hello DK, firstly I want to thank you for sharing all your good insights on Jaks. I would also like to ask you :

1) For the Vietnam plant, only phase 1 will be completed this year? How much would phase 1 contribute in terms of profits to Jaks?

2) When will the rest of the plant be completed?

Thank you

I explained in my article that there is potential upside of USD40m in earnings due to accounting treatment differences. However, this is disregarded on prudent grounds. I wish to keep the article as pure as it is without being clouded by assumptions.

Note that the earnings of Vinh Tan1 provides the BEST and most RELIABLE estimate for JHDP. It is not necessary the RIGHT estimate.

You are right, I didn't repeat. I don't have the absolute answer, hence I need to review my forecast using different method of valuation hoping to reassure myself of my estimates.
---------------
Henry8833 DK66 wrote many articles just for sharings and let us know better from difference perspective. No anyone or rather most in i3 in the same league as Phillip.

Money is evil, don't associate everything with money.

Philip, there is no fairy in your world. You are always cynical. I stay in a simple town with many good people around.

philip, you are very confident like me. Even so I won't jump into conclusion. What make you think I am Dennis ??

It is also very importance to recognise the current price level of Jaks. Even discounting 50% of Vinh Tan 1's earnings, it is still worth it.

That is why I suggested using "margin of safety" to apply appropriate discount to Vinh Tan 1 results would be a better method compared to trying to make assumptions and adjustments on the earnings which are subject to scrutiny and debates.

The difference in efficiency is 25% but the fuel savings could be as low as 15%. My article assumed direct proportional relationship. Therefore, is it appropriate to use my article to quantify the difference in efficiency ? I m doing further studies on this ....

Someone who appears honest may not be honest and vice versa

I think philip is generally correct

If you are using general observations, you are "generally" correct.

Obviously this article suggested that cost savings is not proportionate to improvement in efficiency due to difference in design

https://www.bpastudies.org/bpastudies/article/view/170/318

Philip, am I writing too many articles too ? Each of my article is on different perspective. Is there such thing as "too much sharing" is insincere ?

Please allow me time to consider whether it is appropriate to use my article below for comparison power plant of different designs as the difference in operating cost structure between supercritical and subcritical plants may not be directly proportional to the difference in efficiency.

Jaks Resources - Effect of Plant Efficiency On Profit
https://klse.i3investor.com/blogs/Jaks%20resources/2020-03-14-story-h1...

Very late already. To be continued.....

I m grateful that you created a new ID just to relay the information to us. Really appreciate that.

Do you have information on the effect of efficiency of power plant on earnings ?

---------------------
RangerJ If I may add, for take or pay PPA, energy charge is usually a pass through, and usually a floor efficiency level binding the IPP. So long as the said floor level is met, no penalty to capacity payment. This is very different from open market PPAs. Thank you.

Probability, instead of coming up with pieces of information which i need time to absolve. Could you kindly make a complete picture of your thought and write an article about it ? This will prove beneficial to everyone knowing the impact on earnings as a result of the difference in design between Vinh Tan and JHDP.

I believe everyone is lost in the discussion now. Will appreciate your contribution.

Probability, even mong duong II which is more inferior to chinese technology can achieve better than 34% efficiency.

Probability, I m an accountant not an engineer. I do not quite agree on the higher fuel cost of 20% to JHDP as you have not shown sufficient proof. However, I do agree that supercritical design has higher efficiency.

In any case, can you quantity the effect of 20% higher fuel costs on earnings ? My understanding is Capacity payment making up around two-third of the earnings which should be about equal for Vinh Tan 1 and JHDP.

How efficient is the Subcritical Coal Power Generation Technology of China ?

China's coal plants : New efficiency benchmarks

By James Varley 13 Dec 2019
Since 2004, China has been replacing small, low efficiency, coal plants with larger, more efficient units, and the “six year action plan”, launched in 2014, has set new annual average efficiency targets that must be achieved by coal plants if they are to remain on the grid: 39.6% (net, LHV) for 300 MW units; and 40.9% for 600 MW units. For these 300 MW units to achieve the annual average efficiency target of 39.6% specified in the six year plan, their efficiency under rated conditions needs to be higher than 42%.

https://www.nsenergybusiness.com/features/chinas-coal-plants-new-efficiency-benchmarks/

You know me. Not possible. He jumped out from no way.

Thanks for defending me. Really appreciate.
----------------
elbrutus DK66 bro...can u by anyway step on this BIGGER SINKALANs TAIL ???
05/05/2020 10:31 PM

Probability,

(1) I can't comment as I do not know how much higher is JHDP fuel cost. I have provided information that modern subcritical technology from china can achieve very high efficiency. Moreover,The Capacity payment is a significant portion of the revenue. That dilutes the influence of Energy payment

(2) 7.5b kwh is only the anticipated production figure. Vinh Tan 1 had the same anticipation during planning. 3.3% higher nameplate output will not make a significant difference. However, you are free to make adjustment as you like.

(3) Vinh Tan 1 did not operate for 365 days a year to get the results. There was already allowance made for annual maintenance of about 15 - 30 days. Major maintenance takes about 45 days.

I do not know everything about vinh tan 1 and JHDP and i don't pretend so. That is why peer comparison is the BEST estimate we can have for JHDP. It was the actual operating results where we do not need to make assumptions about its operating conditions like you are doing here.

Making assumptions is dangerous because we have to prove the validity of the assumptions made.

By making unjustified adjustments on actual operating results would cloud the integrity of your estimate derived as we do not fully understand the actual operating scenario of the power plant.

It would be safer just to discount the results to please one's margin of safety. Alternative, just apply a lower PE for safety reasons.

The article showed the followings;

(1) BOT IPP is profitable immediately upon operation
(2) The revenue is huge and very lucrative
(3) The potential profit to JHDP is RM200m

Until now, I have not seen any IB spoke of management profit guidance. Can you show me the link ?

I have already explained that I agree with Icon8888's inclusion of interest costs in his IRR calculations. Those interested may visit the comments in his article. It is lengthy, I do not wish to repeat here.

All PPA signed with EVN were on same terms. It is Vinh Tan 1 who changed the design of the power plant. EVN agreed with no change in PPA condition ( I can't substantiate as I lost the information link, you may ignore the remark). In any case, why would EVN be bothered with differential treatment to vinh tan 1 and JHDP. Moreover, note that JHDP signed the PPA one year earlier than Vinh Tan 1. Normally, the earlier ones are better, right ?

With you estimate of RM0.20 EPS, is Jaks worth 10 to 15 times PE ? RM2 to RM3 ?

I do not want to counter argue every points you made especially on your assumptions. Both of us may be wrong.

I hope I didn't miss any part of your queries.

Thank you

------------------------------
DK66,

(1) how do you justify the same earnings with Vinh Tan 1 when its fuel cost is 20% higher?

(2) on all articles and news, Jaks had been only reporting 7.5B kwh annual power sales. This is 10% lesser than what Vinh Tan 1 sold 8.2B kwh. The high sales of Vinh Tan 1 is likely due to its nameplate output which is slightly higher than Jaks by 4% and exceptional power demand due to dry season in 2019

https://baohaiduong.vn/doanh-nghiep/doanh-nghiep-no-luc-vuot-bao-covid...


(3) The will be periodic maintenance every 3 years is suppose.

2 month loss for every 36 months (3 years)

The above is not considering breakdown losses - we have seen that happening in thermal power plants like Mong Duong


...........................


Based on Vinh Tan 1 earnings, you showed that JAKS at 30% stakes would earn 196M/yr.

If you factor at 7.5B kwh annual sales , earnings becomes:
= (7.5/8.2) x 196 M
= 179M

If you factor the time loss due to maintenance, earnings:
= (34 available months/36 months) x 179M
= 169M average /yr

If you factor in the Tax (assuming 10%)
= 0.9 x 169M
= 152M /yr

EPS under fully diluted condition of 745 m shares:
= 152M/745M shares
= 20 cents per annum



(Management did guide 120M/yr earnings to Public investment bank. This is also not far out from recent info i heard. The numbers would also be around this value if you consider Project IRR of 12% and derive correctly unlike the incorrect method Icon8888 used including the interest payment.


Considering above i am inclined to believe that practically Jaks may only end with an EPS below 20 cents per annum.

...............................................

Number 1 is a crucial factor we need to think of since there is no incentive for EVN to provide same earnings to both Hai Duong & Vinh Tan 1 while incurring 20% higher cost for Hai Duong.

Just want to know your thoughts on the above.

Jaks moved up RM0.10 today. We should be happy. The haters are those should be unhappy now.

Aseng & OTB, please stop. You guys are making Jaks forum very unpleasant.

nonamestupid, why don't you tell these people they should not buy Jaks. Tell them Jaks is only worth RM0.50.

Yes, OTB defended me.

Aseng, OTB did not implicitly ask me to stop. He is in no position to do so.

Please do not fight amongst ourselves. We are friends on the same sides.

-----------------
OTB Posted by Aseng > May 5, 2020 7:20 PM | Report Abuse

Brother DK66,

DO NOT LISTEN TO OTB
HE IS TRYING TO TURN YOU INTO A SELFISH MAN.
---------------------------
Ans :
F you. I am very disappointed with you.
Uneducated person.
If you cannot understand English, please keep your mouth shut.

I did not tell DK66 to stop.
He has to make a decision to continue to stop.

If he decided to stop, I hope I can still contact him.
It is what I said.

There is another ck in I3 previously, who is as good as Dk66, we still contact each other after he stopped.

Anyone who attacks DK66, I am the first one come to defend him.
Dk66, am I right to say it ?
05/05/2020 9:05 PM

Aseng, you are right. They are very angry.

Aseng, see, I m "requested" to keep quiet so that I won't spoil their plans.