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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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Tuesday, 04 September 12
SHIP OWNERS' COMPETITION LEADS TO TANKER FIXTURES BELOW OPERATING COSTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners operating in the VLCC tanker markets are increasingly finding it difficult to obtain even breakeven rates for their vessels, as competit ...
Tuesday, 04 September 12
ORPHEUS SECURES ADDITIONAL SIGNIFICANT KINTAP COAL PROJECT IN SOUTH KALIMANTAN
COALspot.com - Indonesian coal producer, Orpheus Energy (ASX:OEG) has announced that it has secured a 50% equity ownership in an additional tenement ...
Monday, 03 September 12
SHIPOWNERS TO WAIT FOR FURTHER PRICE REDUCTIONS IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With September now upon us, shipbrokers are looking towards an interesting winter season, as ship owners are looking to capitalize on more second ha ...
Sunday, 02 September 12
ADAROS COAL ROYALTIES TO THE GOVERNMENT INCREASED BY 10.5 PERCENT Y-O-Y TO US$196.8 MILLION
COALspot.com - PT Adaro Energy Tbk (IDX: ADRO), the second largest power plant coal producer in Indonesia, announced its consolidated auditor-review ...
Saturday, 01 September 12
FALLING PRICES; BLEEDING MINERS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost 4.070 percent and 0.422 percent respectively on W-o-W and D- ...
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- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Australian Coal Association
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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