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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, 26 January 12
ABM INVESTAMA SEALS US$100 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, PT Reswara Minergi Hartama, a subsidary of PT ABM Investama Tbk (ABMM), has sealed a 2 million tons of coal export co ...
Thursday, 26 January 12
DRY BULK MARKETS DOWNFALL KNOWS NO LIMITS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s demise seems to have no visible end, as China’s Lunar Year Holidays continue this week, thus leaving demand with n ...
Wednesday, 25 January 12
CLEAN AND CLEAR MINING PERMITS TO BE COMPLETED END OF 2012 - BISNIS.COM
Bisnis.com reported that, the government plans to announce 700 mining permits with "clean and clear" status without overlapping on other p ...
Tuesday, 24 January 12
ANOTHER SEVERE DROP IN THE CAPESIZE - BRS
The lunar year celebrations and the high number of new building deliveries (more than 35 Capes so far in January as owners push 2011 deliveries into ...
Tuesday, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
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- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- The University of Queensland
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
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