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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, 14 July 12
FREIGHT MARKET SEEMS TO BE QUITE VOLATILE - VISTAAR
COALspot.com - The market seems to be quite volatile with the trend changing almost every week. This week all the segments were down except for Pana ...
Friday, 13 July 12
TRANSCOAL MINERGY HAS RECEIVED PMA STATUS IN INDONESIA
COALspot.com - PT Transcoal Minergy (“TCM”) has received official foreign owned company status from the Capital Investment Coordinating ...
Thursday, 12 July 12
LACK OF CAPESIZE DEMAND DRAGS DRY BULK MARKET LOWER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A lack of demand for the larger Capesize dry bulk carriers had as a result the fall of the industry’s benchmark, the BDI (Baltic Dry Index), w ...
Thursday, 12 July 12
RIO TINTO'S SENIOR MANAGEMENT CHANGES
COALspot.com - Rio Tinto is making changes to its senior management team as chief financial officer (CFO) Guy Elliott has decided to retire at the e ...
Thursday, 12 July 12
SOUTHGOBI RESOURCES ANNOUNCES NOTICE OF INVESTMENT DISPUTE FILED AGAINST MONGOLIAN GOVERNMENT
Press Release - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi”) announced today that SGQ Coal Investment Pte. Ltd., a wholly ...
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- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- White Energy Company Limited
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- The University of Queensland
- Planning Commission, India
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Latin American Coal - Colombia
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