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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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Saturday, 08 September 12
INDO INDIA ROUTE FREIGHT FOR SUPRAMAX REMAINS STRONG - CAPT. REDDY
COALspot.com - The freight market overall remained weak and except for cape index all other sectors were down. The biggest drop was in the Panamax s ...
Saturday, 08 September 12
RIO TINTO COMPLETES ACQUISITION OF BHP BILLITON'S INTERESTS IN RICHARDS BAY MINERALS
Rio Tinto has doubled its holding in Richards Bay Minerals (RBM) following the completion of its acquisition of BHP Billiton’s entire inte ...
Friday, 07 September 12
HBA GAINS $ 1.56 PER MT IN SEPTEMBER
COALspot.com - The Indonesian government’s declared coal reference price has gained US$ 1.56 per MT M-o-M. This is the first gain ...
Thursday, 06 September 12
SOME ANCHORED PANAMAX VESSELS WAITING FOR CARGOS TO COME
Handy
According to Fearnleys weekly report, in the smaller segments Fearnleys sees little to no changes since last week. There are still entering s ...
Thursday, 06 September 12
DRY BULK CARRIERS STILL IN HIGH DEMAND AMONG SHIP OWNERS, BUT NEWBUILDING ACTIVITY SLIDES IN AUGUST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The slide of the dry bulk market this year hasn't abated ship owners' appetite for dry bulk carriers, as evidenced by the steady interest expresse ...
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- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- The University of Queensland
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Minerals Council of Australia
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
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