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