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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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Sunday, 16 September 12
GLOBAL LOW DEMAND ; INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS DIP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.345 percent W-O-W on Friday, 14 September 2012, closing but gai ...
Sunday, 16 September 12
THE FREIGHT RATES FROM INDONESIA TO INDIA EXPECTED TO BE STEADY - VISTAAR
COALspot.com - The freight market was mixed with most indices closing positive except for the Panamax index.
The main sentiment seems to be ...
Saturday, 15 September 12
FINANCE MINISTRY OPPOSES TAX INCENTIVE PLAN FOR COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry has turned down the idea of providing a fiscal incentive to the country’s coal mining ind ...
Friday, 14 September 12
DRY BULK MARKET LOOKS TOWARDS CHINA FOR SOME POSITIVE NEWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market freight rates submerged underwater for a large part of the year, dry bulk owners are looking for some positive enhancement ...
Friday, 14 September 12
GOVT OFFERS CONDITIONAL TAX HOLIDAY TO AILING COAL MINERS - JP
The Jakarta Post, one of the leading English news paper in Indonesia reported that, acknowledging difficulties encountered by coal miners due to a p ...
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- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Sical Logistics Limited - India
- Planning Commission, India
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
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