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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, 03 May 13
SHIP OWNERS ARE INVESTING HEAVILY IN DRY BULK CARRIER NEWBUILDINGS ONCE MORE: IS THERE ANY RATIONALE? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market remains heavily oversupplied and just as the orderbook of newbuildings had began to shrink, it seems that sh ...
Wednesday, 01 May 13
NEWCASTLE PORT SHIPPED 23.14 PER CENT MORE COAL WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,997,729 tons of thermal and coking coal for week ended 0700 hours 29 April 2013, Newca ...
Tuesday, 30 April 13
KATINGAN RIA THERMAL COAL TO START PRODUCTION FROM EARLY 2014
COALspot.com - Realm Resources Ltd. (ASX: RRP) has announced the completion of the Feasibility Study for its 51% owned Katingan Ria thermal co ...
Monday, 29 April 13
FIRST TRADES OF SGX API 8 CFR SOUTH CHINA COAL SWAP
COALspot.com - The SGX API 8 CFR South China Coal Swap went live for clearing on SGX-DC today with a total volume of 25,000 metric tonnes (25 lots). ...
Sunday, 28 April 13
SUB BIT INDONESIA COAL & CFR SOUTH CHINA COAL SWAPS STAY POSITIVE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average May 2013 delivery has gained 0.34 percent and CFR South China coal shipment gai ...
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- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
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- Neyveli Lignite Corporation Ltd, - India
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- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
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- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
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- The State Trading Corporation of India Ltd
- Planning Commission, India
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
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- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Australian Coal Association
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- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
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- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
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- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
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- The University of Queensland
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- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
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- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
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- Indonesian Coal Mining Association
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- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Siam City Cement - Thailand
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
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- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
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- Marubeni Corporation - India
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- Ministry of Transport, Egypt
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- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
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- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
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- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
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- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
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- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
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- Economic Council, Georgia
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- Medco Energi Mining Internasional
- Parliament of New Zealand
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- Simpson Spence & Young - Indonesia
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- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
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- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
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- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
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- ICICI Bank Limited - India
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- SN Aboitiz Power Inc, Philippines
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