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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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Monday, 10 September 12
TNPL, AN INDIAN PAPER MAKER IS SEEKING FOR 300K MT OF IMPORTED NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 6 Shipments about 50,0 ...
Monday, 10 September 12
DRY BULK MARKET SLOWLY BUT SURELY REACHING CRITICAL STATUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The radical consequences of the shifts in dry bulk demand and prices, especially for the most sought after commodity, concerning the industry, i.e. ...
Monday, 10 September 12
ORPHEUS ENERGY SECURES INDONESIAN COAL TRADING LICENSE
COALspot.com - Indonesian coal producer, Orpheus Energy (ASX:OEG) has announced today that the Indonesian Ministry of Energy and Mineral Resources h ...
Monday, 10 September 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY / HELLENIC SHIPPING
The European Central Bank left its interest rate unchanged at 0.75% focusing on pushing down borrowing costs in troubled economies, Spain and Italy. ...
Sunday, 09 September 12
H213 SUB-BIT FOB INDONESIA COAL SWAPS ARE TRADING HIGHER
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost 0.14 percent W-O-W on 7 September 2012, Friday closing but gained ...
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- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
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- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
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- Sical Logistics Limited - India
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- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- The University of Queensland
- Renaissance Capital - South Africa
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Bhatia International Limited - India
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- Australian Coal Association
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- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
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