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Friday, 03 August 12
INDIA - LIGHTS OUT! - SALVA
 The Indian power sector hit global headlines this week for all the wrong reasons. Firstly, on Monday, over 350 million people lost power across northern India, including Delhi. The following day, the lights went out again, but this time over 600 million people in 20 of India’s 28 states were affected, with the outages covering range of 3000 kilometers in the northern and eastern regions. The authorities’ response has ranged from blaming states for overdrawing from the grid, to appointing a committee to inquire into the causes of the blackout. However, these latest outages are merely symptomatic of much larger problems in India’s power sector, which has been short of power for years.
In Salva’s view, the problem does not lie within the generation sector – but with its upstream (coal supply and transportation) and downstream (transmission and distribution) counterparts. Since the generation sector was deregulated in FY03-04 to enable private participation, installed generation capacity has almost doubled, growing by 92GW or 85%, at a CAGR of 10.8%. The vast majority of this new capacity is coal-fired, which added another 18GW of new capacity in FY11-12 and a further 4.2GW in Q1’12.
However, this new power generation capacity is not being fully utilised, with plant load factors for coal declining from 79.2% in H1’11 to 75.8% in H1’12 and 72% most recently in June. Over 4.3TWh of coal-fired generation was lost in June alone due to low coal supply with a further 1.4TWh lost because of transmission constraints and unplanned outages. Given these figures, clearly thermal coal supply remains a problem. While domestic coal production has increased in 2012, it has languished in recent years, growing at around 1% (5Mt) between 2008-11, which pales in comparison against annual coal-fired power capacity growth of over 10%. Even when production is strong, which it has been in early 2012 (by Indian standards), transportation of coal remains highly problematic. Indian Railways has not been able to procure wagons in time to boost availability sufficiently. This has resulted in coal shortages at power plants and growth in coal mine stockpiles. Transport capacity remains severely constrained as capacity addition has languished at the altar of populism. Passenger traffic shares the same infrastructure as freight, causing freight such as coal to be given a lower priority.
The Electricity Act of 2003 freed up the generation sector, but the same reforms haven’t yet percolated to the transmission and distribution sectors, which are suffering from the same bottlenecks that existed prior to 2003. Transmission capacity is not being developed at the same pace as generation capacity, while distribution reforms remain a pipe dream. As domestic coal production has not kept pace with demand, power producers have used much costlier imported coal to generate electricity. However, India’s tariff framework is still lagging behind, so the State Electricity Boards require ever increasing financial support from state owned banks and financial institutions. Tariff reform is an immediate requirement. Only that will facilitate the sector’s much needed investment.
What are the implications if this is not done now?
Indian cities are accustomed to power cuts. However, increasing prosperity has increased electricity demand and, coupled with the weak monsoon this year, has caused power demand to spike. Agricultural states like Uttar Pradesh, Haryana and Punjab have increasingly overdrawn power from the grids to feed the agricultural sector (which ironically is not metered as power is free for farmers) and to meet residential demand. The agricultural sector is still dependent upon the monsoon as the irrigation network is not widespread, and the weak monsoon has resulted in farmers pumping groundwater onto their fields. Generally electricity demand is low during the monsoon months (June-September) as the rains reduce temperatures. However, the rains have been weak and hence residential power demand has remained strong. This has been further exacerbated with the additional demand from the agricultural sector. State power distribution companies have not planned in advance to buy additional electricity and have overdrawn power from the grid without additional generation being supplied. This has destabilised the grid and caused it to fail.
The impact of the electricity shortages have been felt by the public at large, with a few incidents of people protesting on the road. However, it hasn’t erupted into widespread unrest - thankfully.
The implications of not carrying out reforms in the transmission and distribution sector are now apparent. Lack of adequate investment in the transmission sector will hobble the impressive generation capacity that has been developed. Lack of commercial reforms in the power distribution sector will not provide the returns or even cover the basic cost of generation. The power sector is already sick and if reforms are not carried out with the seriousness required, India will suffer further setbacks.
Source: Salva
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Friday, 28 June 13
U.S. PRODUCED 1.52 PERCENT LESS COAL WEEK ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.40 million short tons (mmst) of ...
Thursday, 27 June 13
US COAL EXPORTS BEATS CHINESE COAL IMPORTS AS THE MOST INFLUENTIAL COAL TRADE - BIMCO
The influence of American coal exports on seaborne transportation has grown significantly over the past decade. In 2002, the US exported 20.1 millio ...
Thursday, 27 June 13
HANDY : USD 12000 FOR SPOT COAL INDO/CHINA AND AROUND USD 13000 INDO/ECI - FEARNLEYS
Handy
Atlantic rates hold well. Continent to Far East is worth more than USD 14k daily whilst USG to Far East pay 23/24k a day. On the route from B ...
Thursday, 27 June 13
DRY BULK CARRIERS DOMINATE NEWBUILDING ORDERS AS SHIP OWNERS ARE ENCOURAGED BY LATEST FREIGHT RATE RALLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding orders for dry bulk carriers were already high, compared to last year, prior to the latest rally of the Baltic Dry Index (BDI), which ha ...
Tuesday, 25 June 13
CAPESIZE MARKET TO REMAIN BULLISH SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been experiencing its long-awaited rally, with the Baltic Dry Index, the industry's benchmark rising to healthier levels fo ...
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- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
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