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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, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, alth ...
Tuesday, 12 June 12
ITACHA RESOURCES BUYS SARANA MARINE - INSIDER STORIES
Insider Stories reported that, coal mining company PT Itacha Resources, a joint venture between Anthoni Salim and Glenn Yusuf, announced that Itacha ...
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- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- The University of Queensland
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Australian Coal Association
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- The Treasury - Australian Government
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Deloitte Consulting - India
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
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