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