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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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Tuesday, 19 March 13
SHIP PRICES COULD BE CLOSING IN TO REACH THEIR BOTTOM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
One of the latest developments in shipping asset prices has been the reluctance from shipyards to further reduce their price expectations to higher ...
Sunday, 17 March 13
A WEAK WEEK FOR SUB-BIT INDONESIA COAL SWAPS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 2.11 percent and CFR South China coal shipment ...
Sunday, 17 March 13
COAL FREIGHT RATES STEADY ON HIGHER DEMAND - CAPT. REDDY
COALspot.com - This freight market continued to remain firm in all segments.
The BDI was up by 5.81 pct closing at 892 points. Cape index was up ...
Friday, 15 March 13
CHEAP SHIP VALUATIONS DON'T NECESSARILY MEAN ATTRACTIVE SAYS VESSELS VALUE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With ship prices plunging by double-digits in the past few years, many ship owners are pondering their next moves in a market often described as att ...
Thursday, 14 March 13
SUPRAMAX : INDO - INDIA TRIP RATE IS AROUND $10,000; SOUTH CHINA $9500 - FEARNRESEARCH
Handy
Indian market is still quiet in respect of export of iron ore. WC India market has improved with a few stems out of the MEG, WC India opening ...
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- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Parliament of New Zealand
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
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