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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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Thursday, 02 August 12
OIL & GAS COMPANIES TO MEET IN MYANMAR FOR UPDATES ON NEW ROUND OF BIDDING AND INVESTMENT POTENTIAL IN UPSTREAM OIL, GAS, AND POWER GENERATION
Press Release - 2nd MOGP Summit (Myanmar Oil, Gas & Power) will convene in Yangon from 3 – 6 September 2012, to unveil new round of biddin ...
Thursday, 02 August 12
DRY BULK MARKET RATES CONTINUE SLUMP AMID SLOWER DEMAND NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on its downward path Wednesday, as the BDI (Baltic Dry Index) kept retreating to new lows. The index was down by 2.12 perce ...
Monday, 30 July 12
DRY BULK MARKET TO REMAIN UNDER PRESSURE FOR THE REST OF 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In an interview with Hellenic Shipping News Worldwide, Mr. Yannis Pachoulis, President of the Hellenic Shipbrokers' Association, remains cautiously ...
Sunday, 29 July 12
FREIGHT MARKET MOMENTUM CONTINUES TO WEAK
COALspot.com - The freight market continued to soft this week with all the segments dropped and the BDI fell below 1,000 points and closed at 933 po ...
Saturday, 28 July 12
CAL 2013 COAL SWAPS ARE HIGHER COMPARED TO SEPT 2012 PRICES
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 0.47 percent on Friday (27 July 2012) closing DoD but lost 0.90 ...
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- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Australian Coal Association
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Eastern Coal Council - USA
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