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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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Saturday, 01 September 12
PANAMAX FREIGHT RATES UNDER PRESSURE FROM LOW DEMAND - VISTAAR
COALspot.com - This week the freight market was weak with mixed results.
The BDI was down by 1.95 pct closing at 703 points, however there was so ...
Friday, 31 August 12
ADVERSE SHIPPING MARKET CONDITIONS SHORTENS LIFE SPAN OF VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The adverse conditions which have been put in place in the world's freight markets, means that ship owners are forced to scrap vessels of a much yo ...
Thursday, 30 August 12
INDO-INDIA, LARGE ECO SUPRA NOW FIXED AT USD 7K FOR DELIVERY SINGAPORE - FEARNLEYS AS
Handy
The Supra market continued its negative trend with little fresh business entering the market. Continent positions fixed around USD 4k for tri ...
Thursday, 30 August 12
DRY BULK MARKET STILL LOOKING OUT FOR BETTER DAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With things in China moving slowly this week, as a result of holidays, it’s no surprise that the latest positive trend in the dry bulk market ...
Wednesday, 29 August 12
COLOMBIA'S MINING BOOM: PART TWO - JOSEPH KIRSCHKE
One of the most prominent casualties of Canada's entry into the Colombian mining sector has been a priest named Jose Reynal-Restrepo. Last Septembe ...
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- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- The University of Queensland
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
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