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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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- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
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