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