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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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Sunday, 29 April 12
THE FREIGHT MARKET EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The BDI continued to go up with the support of Panamax/Supramax and was up by 8.34 pct closing at 1,156 points.
The cape index was ...
Sunday, 29 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS FOR MAY 2012 DELIVERY WAS STABLE THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps for May deliveries stable this week, according to DSP of SGX AsiaClear OTC Coal Swaps. In the me ...
Friday, 27 April 12
BUKIT ASAMS NET INCOME UP 14% IN 1Q 2012 (UNAUDITED)
Press Release - PT Bukit Asam (Persero) Tbk, announced the Consolidated Financial Statements and Subsidiaries per 31 March 2012 (Unaudited).
Reve ...
Thursday, 26 April 12
AUSTRALIAS COKAL EXPANDS MET COAL POTENTIAL INTO WEST KALIMANTAN
COALspot.com - Global metallurgical coal group Cokal Limited (Cokal) (ASX:CKA) announced today it has completed the acquisition of 75.2% of PT Silan ...
Thursday, 26 April 12
BUKIT ASAMS 1Q OPERATING PROFIT MARGIN HAS INCREASED BY 6% TO RP. 1 TRILLION
COALspot.com - PT. Bukit Asam (Persero), the Indonesia’s state owned coal miner's 1Q, 2012 revenue has increased by 31% to Rp. 3.02 trillion ...
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- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- PTC India Limited - India
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- The University of Queensland
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
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