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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, 28 September 12
DRY BULK SECOND HAND VESSELS ON HIGH DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the demise of the dry bulk market and the collapse of freight rates since the beginning of 2012, on the back of record breaking newbuilding ...
Thursday, 27 September 12
MINING RE-COMMENCES AT ORPHEUS' B2 EAST KALIMANTAN COAL PROJECT
- B2 project overburden removal completed and coal exposed
- Coal getting has commenced with target production of 30,000tpm
- Orpheus to re ...
Thursday, 27 September 12
HANDY: THE PACIFIC MARKET IS GETTING WEAKER WITH UPCOMING GOLDEN WEEK HOLIDAYS - FEARNLEYS AS
Handy
Yet another week with rates softening in all trades. Especially owners with ships open Continent struggle to find employment paying decent mo ...
Thursday, 27 September 12
DRY BULK MARKET LOSES STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The rise of the BDI (Baltic Dry Index), the dry bulk industry’s benchmark during the course of the previous week, proved to be short-lived, as ...
Wednesday, 26 September 12
NEWBUILDING ORDERING ACTIVITY REMAINS SUBDUED ON GLOBAL MARKET UNCERTAINTY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding ordering activity has been on the down side during the past few weeks, a trend also noticeable during the course of the past few days, a ...
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- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- The University of Queensland
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- MS Steel International - UAE
- Indonesian Coal Mining Association
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