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