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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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Friday, 27 July 12
PACIFIC MARKET REMAINED FLAT - FEARNLEYS AS
Handy
The Atlantic market continued its downward trend from last week with what appears to be a summer lull across the board. A trip from the USG t ...
Wednesday, 25 July 12
BUKIT ASAMS H1 REVENUE JUMPED BY 13 PERCENT
COALspot.com - PT Bukit Asam (Persero), Tbk., the state owned coal miner's revenue in H1 2012, has jumped 13 percent to IDR 5.79 trillion (approxim ...
Wednesday, 25 July 12
BUMI RESOURCES MINERALS SECURED PINJAM PAKAI FOR ITS ZINC AND LEAD PROJECT
COALspot.com - PT Bumi Resources Minerals Tbk. ("BRMS" or "the Company") today reported that its 80% owned subsidiary, PT Dairi ...
Tuesday, 24 July 12
SHIP OWNERS WAITING FOR SHIP PRICES TO FALL FURTHER BEFORE MOVING IN MORE AGGRESSIVELY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the summer season already well under way and many ship owners getting ready for the autumn, the sale & purchasing activity of second hand v ...
Monday, 23 July 12
NTPC INVITES BIDS FOR 2.6 MILLION TONS OF LOW MOISTURE IMPORTED COAL
COALspot.com - India’s largest electricity generator, NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government ...
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- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
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