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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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Sunday, 22 July 12
NEW CHAIRMAN FOR AUSTRALIAN COAL ASSOCIATION
The Australian Coal Association (ACA) announced that Mr Ross Willims has been appointed as its new independent Chairman effective November 5 2012. M ...
Sunday, 22 July 12
CENTRAL KALIMANTAN COAL RAILWAY NETWORK WILL BE BUILT BY 2015 - THE BORNEO POST
The borneo post reported that, a declaration to build a coal railway network is signed today (12/07/2012) in front of the Indonesian Vice President ...
Sunday, 22 July 12
COAL PRICES IN MIXED TRENDS; STOCKS REMAIN HIGH AT BOTH ENDS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery fell 0.99 percent on last Friday closing (d-o-d) and 1.19 percent com ...
Sunday, 22 July 12
TATA POWER SIGNS A LONG TERM COAL SUPPLY AGREEMENT WITH PT ANTANG GUNUNG MERATUS, INDONESIA
COALspot.com - Tata Power, India’s largest integrated power utility, last Friday announced that it has signed a long term coal suppl ...
Saturday, 21 July 12
THE FREIGHT RATES ARE EXPECTED TO BE FLAT TO SOFT NEXT WEEK - VISTAAR
COALspot.com - The freight market was soft this week as all the segments were down.
The BDI was down by 6.58 pct closing at 1,037 points and the ...
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- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
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- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
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- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
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- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
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- Neyveli Lignite Corporation Ltd, - India
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- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
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- Chamber of Mines of South Africa
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- Miang Besar Coal Terminal - Indonesia
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- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Bangladesh Power Developement Board
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- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
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- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
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- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Economic Council, Georgia
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- The University of Queensland
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
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- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
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- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
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- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
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