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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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Tuesday, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
Friday, 18 May 12
EXPORT TAX WILL ERODE PROFITS, INDONESIAN COAL EXEC COMPLAINS - THE JAKARTA GLOBE
The Jakarta Globe reported that, A 20 percent export duty the government has imposed on 14 mineral ore products will not only take a toll on mining ...
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- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Minerals Council of Australia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- The University of Queensland
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
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