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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, 10 September 12
TNPL, AN INDIAN PAPER MAKER IS SEEKING FOR 300K MT OF IMPORTED NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 6 Shipments about 50,0 ...
Monday, 10 September 12
DRY BULK MARKET SLOWLY BUT SURELY REACHING CRITICAL STATUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The radical consequences of the shifts in dry bulk demand and prices, especially for the most sought after commodity, concerning the industry, i.e. ...
Monday, 10 September 12
ORPHEUS ENERGY SECURES INDONESIAN COAL TRADING LICENSE
COALspot.com - Indonesian coal producer, Orpheus Energy (ASX:OEG) has announced today that the Indonesian Ministry of Energy and Mineral Resources h ...
Monday, 10 September 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY / HELLENIC SHIPPING
The European Central Bank left its interest rate unchanged at 0.75% focusing on pushing down borrowing costs in troubled economies, Spain and Italy. ...
Sunday, 09 September 12
H213 SUB-BIT FOB INDONESIA COAL SWAPS ARE TRADING HIGHER
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost 0.14 percent W-O-W on 7 September 2012, Friday closing but gained ...
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- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Planning Commission, India
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- MS Steel International - UAE
- Indian Energy Exchange, India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Parliament of New Zealand
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
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