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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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Tuesday, 04 September 12
SHIP OWNERS' COMPETITION LEADS TO TANKER FIXTURES BELOW OPERATING COSTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners operating in the VLCC tanker markets are increasingly finding it difficult to obtain even breakeven rates for their vessels, as competit ...
Tuesday, 04 September 12
ORPHEUS SECURES ADDITIONAL SIGNIFICANT KINTAP COAL PROJECT IN SOUTH KALIMANTAN
COALspot.com - Indonesian coal producer, Orpheus Energy (ASX:OEG) has announced that it has secured a 50% equity ownership in an additional tenement ...
Monday, 03 September 12
SHIPOWNERS TO WAIT FOR FURTHER PRICE REDUCTIONS IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With September now upon us, shipbrokers are looking towards an interesting winter season, as ship owners are looking to capitalize on more second ha ...
Sunday, 02 September 12
ADAROS COAL ROYALTIES TO THE GOVERNMENT INCREASED BY 10.5 PERCENT Y-O-Y TO US$196.8 MILLION
COALspot.com - PT Adaro Energy Tbk (IDX: ADRO), the second largest power plant coal producer in Indonesia, announced its consolidated auditor-review ...
Saturday, 01 September 12
FALLING PRICES; BLEEDING MINERS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost 4.070 percent and 0.422 percent respectively on W-o-W and D- ...
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- Malabar Cements Ltd - India
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- The Treasury - Australian Government
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- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
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- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
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- Star Paper Mills Limited - India
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- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
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- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
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- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
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- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- White Energy Company Limited
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