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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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Thursday, 11 April 13
TNEB HAS OPENED 4.2 MILLION TONS IMPORTED COAL TENDER
COALspot.com - TANGEDCO, the state run utility TANGEDCO (formerly known as TNEB), Tamil Nadu state owned electricity company has opened bids to purc ...
Wednesday, 10 April 13
US COAL CONSUMPTION TO INCREASE FROM 889 MMST IN 2012 TO 948 MMST IN 2013 AND 957 MMST IN 2014 - EIA
Based on estimates for the first quarter of 2013, American coal production has continued to decline.
Total production is down 9.9 million short t ...
Wednesday, 10 April 13
DRY BULK FREIGHT RATES SEEN MOSTLY STABLE IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS WORLDWIDE
In its latest report, BIMCO forecast that for the coming six weeks, Capesize time charter average rates will remain subdued around $4,500-8,500 per ...
Monday, 08 April 13
SUB-BIT INDONESIA COAL SWAPS: UPWARD TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 2.71 percent and CFR South China coal shipment&nbs ...
Sunday, 07 April 13
CHARTER RATES ARE UNDER PRESSURE DUE TO DECLINING DEMAND - VISTAAR
COALspot.com - The freight market continued to fall further with all the indices down.
The BDI was down by 5.38 pct closing at 861 points and the ...
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- Mercator Lines Limited - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
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