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