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