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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, 20 August 12
CHINESE COAL SWAPS RISE, INDONESIAN COAL CONTRACTS SOFT
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost -2.05 percent W-o-W on Friday (17 August 2012) closing but gained ...
Saturday, 18 August 12
BULK FREIGHT MARKETS CONTINUED THEIR DECLINE IN LINE WITH WEAK DEMAND - VISTAAR
COALspot.com - This week also the indices fell on all segments with BDI touching lowest in almost 3 years.
The BDI closed at 714 points down by 7 ...
Thursday, 16 August 12
PUBLIC PRIVATE PARTNERSHIPS CONFERENCE 2012
Press Release - Asia’s Premier Public Private Partnerships Conference 2012 will showcase commercial opportunities for investors and developers ...
Wednesday, 15 August 12
UT GENERATED RP 3.09 TRILLION NET INCOME
COALspot.com - As of June 2012 Indonesia’s heavy equipment market grew 14%, from 8,448 units to 9,618 units (based on UT’s internal mark ...
Tuesday, 14 August 12
SAKARI ENTERED INTO JV IN CAMBODIA TO EXPLORE COAL OPPORTUNITIES
COALspot.com - Sakari joints hands with The Royal Group of Companies in Cambodia to explore and develop coal opportunities throughout the country.
...
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- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Australian Coal Association
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
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