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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, 20 August 12
CHINESE COAL SWAPS RISE, INDONESIAN COAL CONTRACTS SOFT
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost -2.05 percent W-o-W on Friday (17 August 2012) closing but gained ...
Saturday, 18 August 12
BULK FREIGHT MARKETS CONTINUED THEIR DECLINE IN LINE WITH WEAK DEMAND - VISTAAR
COALspot.com - This week also the indices fell on all segments with BDI touching lowest in almost 3 years.
The BDI closed at 714 points down by 7 ...
Thursday, 16 August 12
PUBLIC PRIVATE PARTNERSHIPS CONFERENCE 2012
Press Release - Asia’s Premier Public Private Partnerships Conference 2012 will showcase commercial opportunities for investors and developers ...
Wednesday, 15 August 12
UT GENERATED RP 3.09 TRILLION NET INCOME
COALspot.com - As of June 2012 Indonesia’s heavy equipment market grew 14%, from 8,448 units to 9,618 units (based on UT’s internal mark ...
Tuesday, 14 August 12
SAKARI ENTERED INTO JV IN CAMBODIA TO EXPLORE COAL OPPORTUNITIES
COALspot.com - Sakari joints hands with The Royal Group of Companies in Cambodia to explore and develop coal opportunities throughout the country.
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- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- The University of Queensland
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Australian Coal Association
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
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