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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, 11 August 12
INDONESIAN COAL REFERENCE PRICE HAS LOST 27.78 PERCENT YOY
COALspot.com - Indonesian HBA fell again in August.
The monthly coal reference price for coal sales this month fell 3.32 percent. HBA fell ...
Saturday, 11 August 12
SUB-BIT INDONESIA COAL SWAPS SEEN MOVING IN THE RIGHT DIRECTION
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 1.29 percent W-o-W on Friday (10 August 2012) closing but lost 1 ...
Friday, 10 August 12
DRY BULK MARKET DROWNING FROM TONNAGE OVERSUPPLY - HELLENIC SHIPPING
The dry bulk market has been overflowing with new building vessels, despite the fact that demand is more or less (and minus the seasonal factors) ri ...
Thursday, 09 August 12
3RD ANNUAL SHALE GAS
Press Release - With the North American shale gas boom, IBC’s 3rd Annual Shale Gas explores optimal strategies to monetize Asia’s domest ...
Wednesday, 08 August 12
EXPLOITASI AIMS TO RAISE RP 2.7T FOR ACQUISITION - THE JAKARTA POST
The Jakarta Post reported that, publicly listed coal miner PT Exploitasi Energi Indonesia (CNKO) is seeking to raise Rp 2.7 trillion (US$286.2 milli ...
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- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
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