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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, 29 March 12
DRY BULK EDGED FURTHER UP, ON HEALTHY DEMAND FOR MOST SHIP TYPES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With capesize vessels finally reappearing in demand, the dry bulk market had an easier task of rising yesterday, as the BDI (Baltic Dry Index) reach ...
Thursday, 29 March 12
ADARO FY11 NET INCOME JUMPS 124% - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) today announced a 124% jump in net income to US$552 million last year or US$0.017 a share. ...
Wednesday, 28 March 12
CUESTA HAS RECEIVED APPLICATIONS AND FIRM BIDS IN EXCESS OF $9 MILLION FOR THE COMPANYS IPO
COALspot.com - The Directors of Cuesta Coal Limited (ASX:CQC) have announced that today it has received applications and firm bids in excess of $9 m ...
Wednesday, 28 March 12
ORPHEUS ENERGY TO COMMENCE JORC DRILLING AT ADK PROJECT
COALspot.com - Indonesian coal explorer and producer, Orpheus Energy (ASX:OEG), have today announced that the company is about to commence a drillin ...
Tuesday, 27 March 12
DRY BULK MARKET KEEP RISING FOLLOWING THE SAME TREND OF LAST WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum this week, on the same reasons of those last week. That is, the smaller ship types are still on the ris ...
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- Indian Oil Corporation Limited
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Australian Coal Association
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- The University of Queensland
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
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