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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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Sunday, 15 January 12
THE FREIGHT MARKET CONTINUED TO BLEED - VISTAAR
COALspot.com - "The markets continued to bleed with BDI touching almost 1000 points , almost reaching the collapse of 2008 levels," said C ...
Saturday, 14 January 12
GOLDEN MINES TO SUPPLY 4 MIO TONS - INSIDER STORIES
Insider Stories reported that, Coal miner under Sinarmas Group PT Golden Energy Mines Tbk (GEMS), a subsidiary of PT Dian Swastatika Sentosa Tbk (DS ...
Friday, 13 January 12
DIFFICULT START OF 2012 FOR DRY BULK MARKET SEEN HARD TO CHANGE IN THE COURSE OF THE YEAR, UNLESS DEMOLITION PICKS UP
The dry bulk market has been on a freefall this week after a rocky start to the new year. Yesterday, the BDI (Baltic Dry Index) the industry's benc ...
Thursday, 12 January 12
DRY BULK MARKET CRASHING AT START OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept being on freefall mode yesterday, with the industry's benchmark, the BDI (Baltic Dry Index) losing a massive 5.17% on ...
Wednesday, 11 January 12
NEWBUILDING ORDERS DECLINE, AS SHIP OWNERS REALIZE OVERSUPPLY WILL "KILL" THEM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With 2012 now underway, it will be rather interesting to see how ship owners will play the "newbuilding ordering" card to their favor, as ...
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- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Australian Coal Association
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Planning Commission, India
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- London Commodity Brokers - England
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