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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, 01 September 12
PANAMAX FREIGHT RATES UNDER PRESSURE FROM LOW DEMAND - VISTAAR
COALspot.com - This week the freight market was weak with mixed results.
The BDI was down by 1.95 pct closing at 703 points, however there was so ...
Friday, 31 August 12
ADVERSE SHIPPING MARKET CONDITIONS SHORTENS LIFE SPAN OF VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The adverse conditions which have been put in place in the world's freight markets, means that ship owners are forced to scrap vessels of a much yo ...
Thursday, 30 August 12
INDO-INDIA, LARGE ECO SUPRA NOW FIXED AT USD 7K FOR DELIVERY SINGAPORE - FEARNLEYS AS
Handy
The Supra market continued its negative trend with little fresh business entering the market. Continent positions fixed around USD 4k for tri ...
Thursday, 30 August 12
DRY BULK MARKET STILL LOOKING OUT FOR BETTER DAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With things in China moving slowly this week, as a result of holidays, it’s no surprise that the latest positive trend in the dry bulk market ...
Wednesday, 29 August 12
COLOMBIA'S MINING BOOM: PART TWO - JOSEPH KIRSCHKE
One of the most prominent casualties of Canada's entry into the Colombian mining sector has been a priest named Jose Reynal-Restrepo. Last Septembe ...
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- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Parliament of New Zealand
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- White Energy Company Limited
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
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