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