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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, 15 April 12
THE SPOT FIXTURE RATES FOR SUPRAMAX IN SE ASIA SAW SOME SOFTENING OF CHARTER RATES - VISTAAR
COALspot.com - The market seem to be holding and except for Supramax and handy size index all other index was up with BDI up by 4.74 pct closing at ...
Friday, 13 April 12
MINERS OPPOSE GOVTS EXPORT TAX PLAN - THE JAKARTA POST
The Jakarta Post reported that, Indonesian mining companies have strongly protested the government’s plan to impose a 25 percent export tax on ...
Friday, 13 April 12
S&P CAUTIONS AGAINST NEW INDONESIAN MINING REGULATIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Investors may have expressed concerns about looming new mining regulations, but ratings agency Standard & Poor& ...
Thursday, 12 April 12
FIRST QUARTER OF 2012 SAW AN ADDITIONAL 24.2 MILLION DWT OF DRY BULK CARRIERS ENTERING THE FLEET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The inflow of newbuilt dry bulk vessels was larger than expected in the first quarter of 2012. As much as 24.2 million DWT were added to the fleet. ...
Wednesday, 11 April 12
TWO PERCENT OF IBP CONCESSION CONTAINS 42 MMT OF COAL
COALspot.com - 42.35 million ton of coal found in just 2% of PT Insani Bara Perkasa’s total concession area of 24,477 hectare.
Accord ...
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- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- VISA Power Limited - India
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
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