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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, 25 August 12
FREIGHT RATES ARE EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - This week the indices showed some signs of improvement will all the segments moving up except for the handy size.
The BDI was marg ...
Saturday, 25 August 12
INDONESIAN COAL SWAP REMAINS STABLE AT LOW LEVEL
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery gain 0.804 percent W-o-W on Friday (24 August 2012) closing but lost 0. ...
Thursday, 23 August 12
INDONESIA-INDIA, LARGE ECO SUPRA FIXED AT USD 6K FOR DELIVERY SOUTH CHINA - FEARNLEYS AS
Handy
The market continued the same trend as last week, low activity and holidays in some countries.
Rate wise unchanged, with US Gulf/Continent ...
Thursday, 23 August 12
EGCO GROUP EXPANDS TOWARDS INTEGRATED ENERGY BUSINESS WITH INVESTMENT IN INDONESIAS COAL MINE
Electricity Generating Public Company Limited or EGCO Group, the Thailand’s first Independent Power Producer has continually invaded foreign m ...
Thursday, 23 August 12
EGCO GROUP ANNOUNCES 2 BILLION BAHT PROFITS IN Q2/2012
Successfully Establishes Integrated Energy Business and Strengthen Investments in ASEAN
Mr. Sahust Pratuknukul, President of Electri ...
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- Sree Jayajothi Cements Limited - India
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- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
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- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Thai Mozambique Logistica
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- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
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- Aboitiz Power Corporation - Philippines
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- Antam Resourcindo - Indonesia
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- Australian Coal Association
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- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
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- The State Trading Corporation of India Ltd
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- Deloitte Consulting - India
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- Banpu Public Company Limited - Thailand
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- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
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- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
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- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
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- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
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- Vedanta Resources Plc - India
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- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
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