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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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Sunday, 09 June 13
IRON ORE DEMAND: WEAK; COAL MOVEMENT: STEADY TO INDIA AND CHINA - CAPT. REDDY
COALspot.com - The freight market was fairly steady with BDI up by 0.37 per cent closed at 812 points this week.
The Cape index was also ended in ...
Friday, 07 June 13
MEDITERRANEAN COAL MARKETS
Press Release: 3rd International Conference Mediterranean Coal Markets will be held on 16-17th of September 2013, Istanbul, Turkey, Ceylan Intercont ...
Friday, 07 June 13
US'S COAL PRODUCTION INCREASED BY 0.54 PER CENT THE WEEK ENDED JUNE 1
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 18.60 million short tons (mmst) of ...
Thursday, 06 June 13
WE ARE SEEING SOME FRESH INDO COAL TO CHINA AND INDIA - FEARNRESEARCH
Handy
In the Atlantic, the Gulf remains firm for the next week with a few orders in the market. The Supramaxes are seeing around low 20k for fronth ...
Wednesday, 05 June 13
DON'T AVOID PAYING COAL ROYALTY TO THE GOVERNMENT - INDONESIAN ENERGY MINISTER
COALspot.com – “Every country has the right to make policies to protect their national interests”, Energy and Mineral Resources Mi ...
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- Madhucon Powers Ltd - India
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- Price Waterhouse Coopers - Russia
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- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
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- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
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- Indian Oil Corporation Limited
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- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
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- Petron Corporation, Philippines
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- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Altura Mining Limited, Indonesia
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- Coal and Oil Company - UAE
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- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
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- Mercuria Energy - Indonesia
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- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
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- Australian Coal Association
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- The State Trading Corporation of India Ltd
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- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
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- GAC Shipping (India) Pvt Ltd
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- Posco Energy - South Korea
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- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
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- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
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- Commonwealth Bank - Australia
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- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
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- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Minerals Council of Australia
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- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
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- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
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- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
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- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
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- Savvy Resources Ltd - HongKong
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- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
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- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
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- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
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