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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, 08 March 13
DRY BULK MARKET ON A RISING TREND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has continued its rising pattern set after China opened up again for business, following the Asian New Year Holidays. As a resul ...
Thursday, 07 March 13
PANAMAX : POSITIVE TREND; CAPESIZE : GRADUALLY SLIDE - FEARNLEYS AS
Handy
The Atlantic saw more cargoes than last week and rates ticking upwards. The USG-Feast was at USD 22k and Black sea-feast was at USD 12k. The ...
Tuesday, 05 March 13
NEWCASTLE PORT SHIPPED 20.77 PERCENT MORE COAL W/E 4 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2,631,562 MT of thermal and coking coal for a week ended 0700 hours 4 March 2013, Newcas ...
Sunday, 03 March 13
INDONESIAN THERMAL COAL SWAPS; CHINA CONTRACTS FALL W-O-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 0.75 percent and CFR South China coal shipment&nbs ...
Sunday, 03 March 13
FREIGHT MARKET FROM INDONESIA EXPECTED TO BE FIRM - VISTAAR
COALspot.com – The freight market has been fairly firm this week except for cape size index.
The BDI was up by 4.64 points closing at 776 p ...
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- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- The University of Queensland
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Australian Coal Association
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
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