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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, 26 October 12
DRY BULK MARKET FALLS ON WORRIES THAT RECENT RALLY WILL BE SHORTLIVED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market retreated yesterday as a result of a plunge of the Capesize dry bulk carriers' segment, after their latest rally. As a result, ...
Tuesday, 23 October 12
INDONESIA SETS DMO FOR NEXT YEAR
COALspot.com - The Indonesian government has declared the quantity of coal to be supplied to domestic market in 2013 recently under DMO regulation. ...
Sunday, 21 October 12
BUMA HAS PRODUCED 25.0 MILLION TONS OF COAL YEAR TO DATE
COALspot.com - PT Delta Dunia Makmur Tbk., has removed 33.2 million bcm* (+5.5% YoY) of Overburden in September 2012 totaled while coal produc ...
Saturday, 20 October 12
SUPRAMAX FREIGHT EXPECTED TO BE FLAT - VISTAAR
COALspot.com - The shipping market continued to be quite active with quite lot of cargoes fixed for in the cape and panamax sector.
The BDI was ...
Thursday, 18 October 12
INDO-INDIA, LARGE ECO SUPRA FIXED AT USD 11000 - FEARNLEYS AS
Handy
Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Cont to East Med were around USD 14k and Black Sea ...
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- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Planning Commission, India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
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