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