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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, 14 June 13
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 18.20 MILLION SHORT TONS W/E 8 JUNE 2013
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 18.20 million short tons (mmst) of ...
Thursday, 13 June 13
HANDY: SHORT PERIOD WERE FIXED AT AROUND USD 9000 LEVEL
Handy
Despite falling rates for bigger sizes, the Supras in Atlantic are seeing some improvements with fresh biz. US Gulf positions fetching tick a ...
Thursday, 13 June 13
BIMCO EXPECTS SUBDUED CAPESIZE EARNINGS FOR THE COMING WEEKS - HELLENIC SHIPPING NEWS
Bulk is not only about China even though it is a key driver. In this section, we have taken a closer look at the European seaborne coal markets, whi ...
Thursday, 13 June 13
RIO TINTO AGREES SALE OF EAGLE PROJECT FOR AN ESTIMATED US$325 MILLION IN CASH
COALspot.com - Rio Tinto has reached a binding agreement to sell its Eagle project to Lundin Mining Corporation for an estimated US$325 million in c ...
Thursday, 13 June 13
HARD COAL IMPORTS RISE SHARPLY IN GERMANY IN Q1 2013 - COAL IMPORTERS ASSOCIATION
Coal-fired Power Plants in Germany: Pillars of the Grid and the Energy Turnaround; Hard Coal Consumption and Hard Coal Imports Rise Sharply in Germa ...
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- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Planning Commission, India
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- VISA Power Limited - India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- London Commodity Brokers - England
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