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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, 06 January 13
FREIGHT MARKET REMAINED FAIRLY STEADY - VISTAAR
WISH YOU ALL HAPPY NEW YEAR
COALspot.com - The freight market remained fairly steady in spite of Christmas / New Year Holidays. The BDI was almos ...
Saturday, 05 January 13
THE SHIPPING MARKET IN 2012 AND LOOKING FORWARD - BIMCO
Global Economy: Things will go up from here
The global economy continues to grow, albeit at a slower pace than previous years. The slower economic ...
Friday, 04 January 13
DRY BULK MARKET LOOKING FOR DIRECTION IN FIRST TRADING DAYS OF THE NEW YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market is actively looking for its footing at the start of the New Year, as charters have been scarce, as is usually the case during th ...
Thursday, 03 January 13
INDONESIAN SUB-BITUMINOUS COAL SWAPS CLOSED US$ 6.86 HIGHER FOR 2014 DELIVERY
COALspot.com - Swaps prices were changed positively for thermal coal for loading in the first quarter from Indonesia, according to SGX AsiaClear OTC ...
Thursday, 03 January 13
SUPRMAX FREIGHT RATE FROM RED SEA / INDIA IS AROUND MID TEENS - FEARNLEYS
Fearnleys in its weekly report said that, Indian market was very quiet in respect of export of iron ore. For Indo-India trip Supra rate was hovering ...
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- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Planning Commission, India
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- White Energy Company Limited
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