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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, 18 May 12
KOREA EAST WEST POWER LOOKING FOR TOTAL 2.6 MILLION TONS OF 4600 NAR COAL AT FIXED PRICE FOR 5 YEARS
COALspot.com - Korea East West Power Co., Ltd is inviting bids to supply of 520,000 Metric Tons (per annum) of minimum 4,600 kcal/kg coal of N ...
Friday, 18 May 12
NICKEL ORE CARGOES ARE NOT SEEN IN MARKET ANYMORE DUE TO ON-GOING INDONESIAN BAN - FEARNLEYS AS
Handy
The market remained variable.
Fronthaul voyages both from Baltic and Black Sea paid over USD 18k/day. From USG to Cont tonnage would get ...
Thursday, 17 May 12
COAL MINERS OPPOSE EXPORT TAX, SUGGEST OUTPUT QUOTA - THE JAKARTA POST
The Jakarta Post reported that, coal miners have suggested that the government apply a production quota instead of implementing an export tax in ord ...
Thursday, 17 May 12
DRY BULK MARKET STILL LOOKING FOR NEW DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on moving sideways during this week, with the mixed performance across all segments. Yesterday, the industry’s be ...
Tuesday, 15 May 12
POTENTIAL BOOM OF CHINAS COAL IMPORTS COULD PROVIDE FURTHER SUPPORT TO DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been moving sideways during the past week with the industry’s benchmark, the Baltic Dry Index (BDI) losing 0.53% on th ...
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- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
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