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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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Thursday, 04 October 12
CAPESIZE : IN SPITE OF THE HOLIDAYS IN CHINA, RATES ARE CLIMBING UP - FEARNLEYS AS
Handy
Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Continent to east Med were around USD 13k and Black ...
Wednesday, 03 October 12
BARCLAYS'S PRICE FORECAST FOR NEWCASTLE COAL HAS BEEN WRITTEN DOWN
“ The main story in the global coal markets has been the growth in supply, with all of the major exporters adding volumes into a market which ...
Sunday, 30 September 12
SUB-BIT INDONESIA COAL SWAPS: MIXED TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 0.73 percent w-o-w but gained 0.41 percent d-o-d on Friday, 28 Se ...
Sunday, 30 September 12
INDONESIA HAS NO PLAN TO CAP COAL PRODUCTION
COALspot.com - “The current low coal prices were mainly due to a global oversupply condition, spurred by numerous mining exploitations in the ...
Sunday, 30 September 12
FREIGHT MARKET UNDER PRESSURE; OVERALL SENTIMENTS ARE STILL BEARISH
COALspot.com - The freight market seemed to have lost steam and all indices were down except for cape index.
The BDI was slightly down by 6 point ...
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- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
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