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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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Friday, 08 June 12
NO IMMEDIATE IMPACT ON ADARO'S RATING FROM BEP TRANSACTION - FITCH RATINGS
Fitch Ratings has said that PT Adaro Indonesia's (Adaro, 'BB+'/ Stable) ratings are not immediately affected by its parent PT Adaro Energy Tbk's ...
Thursday, 07 June 12
DRY BULK MARKET FALLS FOR 10 STRAIGHT SESSION ON OVERSUPPLY PROBLEMS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A resurgence of oversupply, coupled with national holidays in various parts of the world has contributed to yet another fall of the dry bulk market ...
Thursday, 07 June 12
COAL EXPORT TAX NOT RATIONAL: MINISTER - THE JAKARTA POST
Trade Minister Gita Wirjawan has criticized as irrational the idea to restrict coal exports by imposing an export tax, According to The Jakarta post ...
Thursday, 07 June 12
BY 2022 PLN IS EXPECTED TO BURN AROUND 125 MILLION TONS OF COAL
COALspot.com - Indonesia's state owned electricity company's (PLN) coal consumption is expected to reach 125.7 million tons by 2012.
Nur Pamudj ...
Wednesday, 06 June 12
INDONESIAN GOVERNMENT'S DECLARED COAL PRICES CONTINUING ITS DECLINE
COALspot.com - Indonesian HBA fell to lowest level since January 2011 in June 2012. The monthly coal reference price for coal sales this month ...
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- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- The University of Queensland
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Romanian Commodities Exchange
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
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