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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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Tuesday, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
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- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- PTC India Limited - India
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- MS Steel International - UAE
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Australian Coal Association
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
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