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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, 13 January 13
THE FREIGHT MARKET: FAIRLY STEADY - VISTAAR
COALspot.com - The freight market was fairly steady with all the indices up with maximum gain in the Panamax segment. The BDI was up by 7.65 pct clo ...
Saturday, 12 January 13
SUB-BIT FOB INDONESIA COAL SWAPS: WEAK
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery has lost 0.32 percent WoW but CFR South China coal ship ...
Saturday, 12 January 13
HIGHER COAL PRICES: SEASONAL EFFECT
COALspot.com : Bahana Securities, one of the leading securities in Indonesia, said in its latest coal outlook that, on US and China&rsquo ...
Friday, 11 January 13
HBA HAS JUMPED BY US$ 5.80 PMT IN JANUARY 2013
COALspot.com - The Indonesian government has declared bench mark price for coal higher than December price. The monthly coal reference price f ...
Thursday, 10 January 13
PANAMAX : SOME GLIMMERS OF HOPE MID WEEK - FEARNLEYS
According to Fearnley’s weekly report, the Atlantic handy market is stable with rates around USD 11k for Cont-Feast and USD 17k bss USG/Feast. ...
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- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Planning Commission, India
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
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