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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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Monday, 05 March 12
SOME RESOURCE TITANS NOT THRILLED WITH INDONESIAN EXPORT BAN - THE JAKARTA GLOBE
The Jakarta Globe reported that, local representatives of major business associations in East Kalimantan have protested a government regulation that ...
Monday, 05 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
An air of optimism poured in the market this week for dry bulk shippers with the Baltic Dry Index recording daily gains during the end of February b ...
Sunday, 04 March 12
SE ASIA WAS FIRM FOR TRIPS TO INDIA AND CHINA - VISTAAR
COALspot.com - This week saw another upward trend with all indices up and generally market was firm.
The BDI was up by 7.38 pct closing at 771 po ...
Friday, 02 March 12
DJMBP HAS ANNOUNCED SECOND BATCH OF CLEAR N CLEAN CERTIFIED MINERS
COALspot.com - The Directorate general of mineral & coal of Indonesia has announced second batch of companies who have passed IUP Clear and Clea ...
Thursday, 01 March 12
BUKIT ASAM TARGETS EUROPEAN INVESTORS
COALspot.com - PT. Bukit Asam (persero) Tbk, Indonesian state owned coal miner is planning to conduct road show in Europe next week to target at Eur ...
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- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
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