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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, 30 October 12
NEW BUILDING ORDERING ACTIVITY KEEPS ON RETREATING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have refrained from placing any new orders of vessels during the course of the past few days, according to shipbroker reports. According ...
Monday, 29 October 12
US COAL EXPORTS ARE EXPECTED TO REACH 125 MILLION TONS THIS YEAR - EIA
COALspot.com - US coal exports are expected to reach 125 million tons this year, surpassing the old record of about 113 million tons set in 1981, sa ...
Sunday, 28 October 12
SUB-BIT INDONESIA COAL SWAPS (FOB ) FOR DECEMBER 2012 DELIVERY STAYED FLAT D-D
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery flat on D-D but gained 0.38 percent on W-W on Friday, 26 October 2012, ...
Sunday, 28 October 12
INDONESIA TO INDIA SUPRAMAX FREIGHT MARKET FAIRLY STEADY - VISTAAR
COALspot.com - The Cape size sector continued to remain active with iron ore movement being steady. All other sectors were down.
The BDI was up b ...
Friday, 26 October 12
SHIPPING MARKETS HEADING FOR DIVISION AND MULTI-TIER WILL BECOME THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It seems that something is expected to be fundamentally different in the way that the shipping markets will be operating in the future, according to ...
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- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Australian Coal Association
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Parliament of New Zealand
- Parry Sugars Refinery, India
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Marubeni Corporation - India
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