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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, 16 September 12
GLOBAL LOW DEMAND ; INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS DIP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.345 percent W-O-W on Friday, 14 September 2012, closing but gai ...
Sunday, 16 September 12
THE FREIGHT RATES FROM INDONESIA TO INDIA EXPECTED TO BE STEADY - VISTAAR
COALspot.com - The freight market was mixed with most indices closing positive except for the Panamax index.
The main sentiment seems to be ...
Saturday, 15 September 12
FINANCE MINISTRY OPPOSES TAX INCENTIVE PLAN FOR COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry has turned down the idea of providing a fiscal incentive to the country’s coal mining ind ...
Friday, 14 September 12
DRY BULK MARKET LOOKS TOWARDS CHINA FOR SOME POSITIVE NEWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market freight rates submerged underwater for a large part of the year, dry bulk owners are looking for some positive enhancement ...
Friday, 14 September 12
GOVT OFFERS CONDITIONAL TAX HOLIDAY TO AILING COAL MINERS - JP
The Jakarta Post, one of the leading English news paper in Indonesia reported that, acknowledging difficulties encountered by coal miners due to a p ...
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- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- The University of Queensland
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
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