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