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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, 06 August 12
3RD ANNUAL INDONESIA POWER
Press Release - 3rd Annual Indonesia Power is Indonesia’s premier power event, where commercial opportunities and new projects are identified. ...
Monday, 06 August 12
COAL EXPORTS COULD ADD $2B TO $6B ANNUALLY TO U.S. ECONOMY - HELLENIC SHIPPING
Business groups backing Pacific Northwest coal export proposals on Thursday lauded a new report that claims increased U.S. coal exports could bring ...
Sunday, 05 August 12
SUB-BIT INDONESIA COAL SWAPS ARE WAY UP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 1.36 percent on Friday (3 August 2012) closing W-o-W but gained& ...
Sunday, 05 August 12
INDONESIA'S ADARO TRIMS PRODUCTION FORECAST, CITES BAD ECONOMY - THE JAKARTA GLOBE
The Jakarta globe reported that, Adaro Energy, the country’s second-largest coal producer, has cut its annual production forecast to between ...
Sunday, 05 August 12
DRY BULK FREIGHT MARKET TO STAY WEAK NEXT COUPLE OF WEEKS - VISTAAR
COALspot.com - The freight market continued to soften further in all segments.
The BDI was down by 8.68 pct closing at 852 points. The cape index ...
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- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
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