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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, 27 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The pessimism in the dry market persists with the Baltic Dry Index still trying to find a steady pace of growth and average time charter earnings fo ...
Sunday, 26 February 12
THE FREIGHT RATES FOR INDONESIA TO INDIA IS LIKELY TO BE FIRM FOR NEXT 2/3 WEEKS - VISTAAR
COALspot.com – “There was not much change in the BDI and other indices this week except for the Panamax which was down by 11.91 pc ...
Friday, 24 February 12
DRY BULK MARKET POSTS FIRST REBOUND IN A WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was expected since mid-week, the dry bulk market's benchmark, the BDI (Baltic Dry Index) has managed to put a stop in a 6-day losing rally, endi ...
Thursday, 23 February 12
2.5 PANAMAX VESSELS PER AVAILABLE CARGO FOR MARCH DATES - FEARN BULK
Handy
Another depressing week for Supras in both basins. Lack of fresh business and over-supply of tonnage in the Atlantic pushed rates south. Cont ...
Wednesday, 22 February 12
RAW COMMODITY EXPORT BAN SPARKS SMELTER BUILDING BOOM IN INDONESIA ANTARA / THE JAKARTA GLOBE
Antara / The Jakarta Globe reported that, as the government gears up to ban all exports of unprocessed commodities, Indonesia will see 12 new ...
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- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Planning Commission, India
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
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