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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, 14 July 12
FREIGHT MARKET SEEMS TO BE QUITE VOLATILE - VISTAAR
COALspot.com - The market seems to be quite volatile with the trend changing almost every week. This week all the segments were down except for Pana ...
Friday, 13 July 12
TRANSCOAL MINERGY HAS RECEIVED PMA STATUS IN INDONESIA
COALspot.com - PT Transcoal Minergy (“TCM”) has received official foreign owned company status from the Capital Investment Coordinating ...
Thursday, 12 July 12
LACK OF CAPESIZE DEMAND DRAGS DRY BULK MARKET LOWER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A lack of demand for the larger Capesize dry bulk carriers had as a result the fall of the industry’s benchmark, the BDI (Baltic Dry Index), w ...
Thursday, 12 July 12
RIO TINTO'S SENIOR MANAGEMENT CHANGES
COALspot.com - Rio Tinto is making changes to its senior management team as chief financial officer (CFO) Guy Elliott has decided to retire at the e ...
Thursday, 12 July 12
SOUTHGOBI RESOURCES ANNOUNCES NOTICE OF INVESTMENT DISPUTE FILED AGAINST MONGOLIAN GOVERNMENT
Press Release - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi”) announced today that SGQ Coal Investment Pte. Ltd., a wholly ...
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- Ministry of Transport, Egypt
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
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- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
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- London Commodity Brokers - England
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
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- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
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- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
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- Attock Cement Pakistan Limited
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- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
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- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- White Energy Company Limited
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- MS Steel International - UAE
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
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