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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, 06 August 12
3RD ANNUAL INDONESIA POWER
Press Release - 3rd Annual Indonesia Power is Indonesia’s premier power event, where commercial opportunities and new projects are identified. ...
Monday, 06 August 12
COAL EXPORTS COULD ADD $2B TO $6B ANNUALLY TO U.S. ECONOMY - HELLENIC SHIPPING
Business groups backing Pacific Northwest coal export proposals on Thursday lauded a new report that claims increased U.S. coal exports could bring ...
Sunday, 05 August 12
SUB-BIT INDONESIA COAL SWAPS ARE WAY UP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 1.36 percent on Friday (3 August 2012) closing W-o-W but gained& ...
Sunday, 05 August 12
INDONESIA'S ADARO TRIMS PRODUCTION FORECAST, CITES BAD ECONOMY - THE JAKARTA GLOBE
The Jakarta globe reported that, Adaro Energy, the country’s second-largest coal producer, has cut its annual production forecast to between ...
Sunday, 05 August 12
DRY BULK FREIGHT MARKET TO STAY WEAK NEXT COUPLE OF WEEKS - VISTAAR
COALspot.com - The freight market continued to soften further in all segments.
The BDI was down by 8.68 pct closing at 852 points. The cape index ...
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- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Planning Commission, India
- TeaM Sual Corporation - Philippines
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