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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, 31 March 13
COAL FREIGHTS ARE IN FLAT TO WEAK TREND - VISTAAR
COALspot.com - This freight market after several weeks of firming up seemed to lose steam and this week all the indices were down except for handy s ...
Friday, 29 March 13
SUB-BIT INDONESIA COAL SWAPS: UP 0.55 % WOW; CFR SOUTH CHINA COAL CONTRACT: UP 0.23 % WOW
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 0.55 percent and CFR South China coal shipment&nbs ...
Thursday, 28 March 13
SHIP OWNERS KEEN ON ACQUIRING SECOND HAND TONNAGE, AS WELL AS NEW BUILDINGS IN CONVENTIONAL SEGMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The recent rally of the Baltic Dry Index (BDI), coupled with renewed optimism, at least in some parts of the wet market, have prompted many ship own ...
Wednesday, 27 March 13
PTBA HAS CONCLUDED US$ 16.14 BILLION WORTH OF COAL SALES AND PURCHASE AGREEMENT WITH PLN
COALspot.com - PT. Bukit Asam, a 32 years old Indonesian state owned coal miner has signed a coal sales and purchase agreement with PT PLN, (a state ...
Wednesday, 27 March 13
SHIPPING CONFIDENCE REACHES HIGHEST LEVEL FOR TWO YEARS - MOORE STEPHENS
Overall confidence levels in the shipping industry recovered to their highest level for two years in the three months ended February 2013, according ...
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- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- SMC Global Power, Philippines
- McConnell Dowell - Australia
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