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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, 07 July 12
BALTIC INDEX UP ON STRONG CAPE, PANAMAX RATES - VISTAAR
COALspot.com - This week all the segments were firmed up with BDI up by 15.23 pct (up by 153 points) closing at 1,157 points.
The cape index also ...
Saturday, 07 July 12
DRY BULK MARKET NOT ABLE TO FIND SOLID GROUND SAY EXPERTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the second half of each, traditionally looking the most active one, especially in terms of newbuildings being delivered, it's highly unlikely ...
Thursday, 05 July 12
GOVT GETS READY FOR $1.8B SUIT - THE JAKARTA POST
The Jakarta Post, one of the leading Indonesian English new papers reported that, several ministries and the Attorney General’s Office held a ...
Thursday, 05 July 12
DRY BULK MARKET MOVES FURTHER UP THE HILL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its growth momentum by the middle of the week, as the BDI (Baltic Dry Index) rose by an additional 40 points to 1,103 p ...
Thursday, 05 July 12
BUMI ACHIEVES HIGHER SELLING PRICE IN FIRST QUARTER
COALspot.com - PT Bumi Resources Tbk (BUMI), Indonesia's largest coal producer and exporter, has successfully maintained a higher sales margin, des ...
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- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- London Commodity Brokers - England
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Australian Coal Association
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
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