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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, 10 October 12
TAPPING OPPORTUNITIES WITHIN GLOBAL ECONOMIC PERSPECTIVE
Press Release: Mining sector will continue to play a significant role in supporting industrial and economic development in Indonesia which is curren ...
Tuesday, 09 October 12
REALM RESOURCES RECOMMENCES DRILLING AT KATINGAN RIA COAL PROJECT
COALspot.com : Realm Resources Ltd. (ASX) has announced that it has commenced work on the phase three technical programme at its Katingan Project in ...
Sunday, 07 October 12
INDONESIAN GOVERNMENT DECLARED HBA FELL AGAIN IN OCTOBER
COALspot.com - The Indonesian government’s declared coal reference price has lost US$ 0.17 per MT M-M.
The monthly coal referen ...
Saturday, 06 October 12
CFR SOUTH CHINA COAL SWAPS FOR DECEMBER'13 DELIVERY GAINED 1.3 PERCENT W-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery gained 0.098 percent and 0.164 percent W-W and D-D respectively o ...
Saturday, 06 October 12
FREIGHT MARKET IS LIKELY TO PICK AFTER THE HOLIDAYS IN CHINA - VISTAAR
COALspot.com - The freight market appeared to be seeing some increase BDI up by 14.23 pct closing at 875 points. The Cape and Panamax index also saw ...
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- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- The University of Queensland
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Parliament of New Zealand
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
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