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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, 25 August 12
FREIGHT RATES ARE EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - This week the indices showed some signs of improvement will all the segments moving up except for the handy size.
The BDI was marg ...
Saturday, 25 August 12
INDONESIAN COAL SWAP REMAINS STABLE AT LOW LEVEL
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery gain 0.804 percent W-o-W on Friday (24 August 2012) closing but lost 0. ...
Thursday, 23 August 12
INDONESIA-INDIA, LARGE ECO SUPRA FIXED AT USD 6K FOR DELIVERY SOUTH CHINA - FEARNLEYS AS
Handy
The market continued the same trend as last week, low activity and holidays in some countries.
Rate wise unchanged, with US Gulf/Continent ...
Thursday, 23 August 12
EGCO GROUP EXPANDS TOWARDS INTEGRATED ENERGY BUSINESS WITH INVESTMENT IN INDONESIAS COAL MINE
Electricity Generating Public Company Limited or EGCO Group, the Thailand’s first Independent Power Producer has continually invaded foreign m ...
Thursday, 23 August 12
EGCO GROUP ANNOUNCES 2 BILLION BAHT PROFITS IN Q2/2012
Successfully Establishes Integrated Energy Business and Strengthen Investments in ASEAN
Mr. Sahust Pratuknukul, President of Electri ...
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- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
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