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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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Thursday, 03 May 12
DRY BULK MARKET REMAINS INACTIVE, POSTING MILD DECREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept retreating this week, although at a very low pace, on the back of a lull in demand. The industry's benchmark, th ...
Thursday, 03 May 12
MINERS DEMAND LEGAL CERTAINTY ON PRE-BAN INTERIM POLICY - THE JAKARTA POST
The Jakarta Post reported that, Mining companies represented by the Indonesian Mining Association (IMA) welcomed the government’s plan to impo ...
Thursday, 03 May 12
HANDY EAST COAST INDIA - CHINA AROUND USD 7000 - FEARNLEYS AS
Handy - Stable demand in the Atlantic offered good rates for the tonnage.
USG/Cont was worth USD 17500 and more. Baltic and Black Sea appeared to ...
Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem f ...
Tuesday, 01 May 12
VIETNAM FEARS IT MAY NOT SEEK COAL SUPPLIES - TBKTSG / VIETNAMNET BRIDGE
TBKTSG / VietNamNet Bridge reported that, with five coal-run thermopower plants under construction, PetroVietnam alone would need 18 million tons of ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- White Energy Company Limited
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
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