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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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Thursday, 02 August 12
OIL & GAS COMPANIES TO MEET IN MYANMAR FOR UPDATES ON NEW ROUND OF BIDDING AND INVESTMENT POTENTIAL IN UPSTREAM OIL, GAS, AND POWER GENERATION
Press Release - 2nd MOGP Summit (Myanmar Oil, Gas & Power) will convene in Yangon from 3 – 6 September 2012, to unveil new round of biddin ...
Thursday, 02 August 12
DRY BULK MARKET RATES CONTINUE SLUMP AMID SLOWER DEMAND NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on its downward path Wednesday, as the BDI (Baltic Dry Index) kept retreating to new lows. The index was down by 2.12 perce ...
Monday, 30 July 12
DRY BULK MARKET TO REMAIN UNDER PRESSURE FOR THE REST OF 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In an interview with Hellenic Shipping News Worldwide, Mr. Yannis Pachoulis, President of the Hellenic Shipbrokers' Association, remains cautiously ...
Sunday, 29 July 12
FREIGHT MARKET MOMENTUM CONTINUES TO WEAK
COALspot.com - The freight market continued to soft this week with all the segments dropped and the BDI fell below 1,000 points and closed at 933 po ...
Saturday, 28 July 12
CAL 2013 COAL SWAPS ARE HIGHER COMPARED TO SEPT 2012 PRICES
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 0.47 percent on Friday (27 July 2012) closing DoD but lost 0.90 ...
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- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Economic Council, Georgia
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- The University of Queensland
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- White Energy Company Limited
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
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