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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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Wednesday, 26 December 12
SHIP OWNERS WRAP UP NEWBUILDING DEALS PRIOR TO YEAR END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the year inches closer and closer to its end, many ship owners are looking to close deals for newbuilding vessels they have been negotiating duri ...
Monday, 24 December 12
CONSTITUTIONAL COURT DECISION MAY FURTHER DELAY THE ISSUANCE OF NEW MINING BUSINESS LICENCES - TJEN SHE SIUNG
COALspot.com - In November 2012 the Constitutional Court of Indonesia issued a decision on amendments to certain provisions under the Mining Law No. ...
Monday, 24 December 12
BUNKER PRICES TO CONTINUE RISING, ALBEIT IN A SLOWER MODE, DURING THE NEXT FEW YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEW
In a recent report, US-based consulting firm Mcquilling Services attempted to forecast the course of bunker prices during the next few years, as thi ...
Sunday, 23 December 12
Q4' 2013 CFR SOUTH CHINA COAL SWAP, US$ 3.40 HIGHER COMPARED TO Q1' 2013 PRICE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery gained 1.94 percent M-M and WoW by 1.57percent but lost 0.35 ...
Saturday, 22 December 12
SECOND HAND VESSELS ENJOY HIGH DEMAND AS PRICES ARE ATTRACTIVE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the year is closing to its end, activity in the second hand vessel market has been more than high. Ship owners are looking to ...
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- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Economic Council, Georgia
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Australian Coal Association
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Bangladesh Power Developement Board
- Planning Commission, India
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- London Commodity Brokers - England
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