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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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Saturday, 21 July 12
INDONESIAN COMPANIES ABM INVESTAMA AND AVRA ASIA WORK OUT LONG-TERM CONTRACT - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading English news papaer in Indonesia reported that, ABM Investama, a company with diversified interests in coal mi ...
Friday, 20 July 12
INDONESIA-INDIA SUPRAS BEING FIXED AT $ 10K
Handy
After a stable last week, the Handysize market has experienced softening rates in the Atlantic. Ships are ballasting from India into the Atla ...
Friday, 20 July 12
HANDYSIZES PROVE RATHER ATTRACTIVE AMONG OTHER SHIPS, IN TERMS OF FUTURE RETURNS ON INVESTMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Handysize segment of the dry bulk market appears to offer the best incentive among other ship types, for a ship owners to invest in, says Interm ...
Wednesday, 18 July 12
TAIWAN POWER COMPANY TO IMPORT 0.588 MILLION TONS OF LOW ASH AND EXTRA LOW SULFUR SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 588,000 MT tons of extra low sulfur sub-bituminous coal for Taipower thermal power plant thro ...
Wednesday, 18 July 12
SHIP PRICES HAVE FALLEN RAPIDLY THIS YEAR, FAVORING INVESTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The price for a 5 year old Capesize dry bulk carrier of 172,000 dwt has fallen to about $33,4mil from $42.9 at the end of June 2011, while at end of ...
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- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Australian Coal Association
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
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