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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, 11 August 12
INDONESIAN COAL REFERENCE PRICE HAS LOST 27.78 PERCENT YOY
COALspot.com - Indonesian HBA fell again in August.
The monthly coal reference price for coal sales this month fell 3.32 percent. HBA fell ...
Saturday, 11 August 12
SUB-BIT INDONESIA COAL SWAPS SEEN MOVING IN THE RIGHT DIRECTION
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 1.29 percent W-o-W on Friday (10 August 2012) closing but lost 1 ...
Friday, 10 August 12
DRY BULK MARKET DROWNING FROM TONNAGE OVERSUPPLY - HELLENIC SHIPPING
The dry bulk market has been overflowing with new building vessels, despite the fact that demand is more or less (and minus the seasonal factors) ri ...
Thursday, 09 August 12
3RD ANNUAL SHALE GAS
Press Release - With the North American shale gas boom, IBC’s 3rd Annual Shale Gas explores optimal strategies to monetize Asia’s domest ...
Wednesday, 08 August 12
EXPLOITASI AIMS TO RAISE RP 2.7T FOR ACQUISITION - THE JAKARTA POST
The Jakarta Post reported that, publicly listed coal miner PT Exploitasi Energi Indonesia (CNKO) is seeking to raise Rp 2.7 trillion (US$286.2 milli ...
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- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- The University of Queensland
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
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