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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, 30 June 12
THE FREIGHT RATES ARE EXPECTED TO BE STEADY TO FIRM NEXT WEEK - VISTAAR SINGAPORE
COALspot.com – The BDI was up by 2.66 pct (up by 26 points) closing at 1,004 points crossing the 1000 point barrier this week.
The c ...
Friday, 29 June 12
INDONESIAN PRODUCERS ARE PLANNING TO CUT PRODUCTION IF COAL PRICES FALL FURTHER
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 31.54* million tons of coal in May 2012, compared to 31.86* mill ...
Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order ...
Thursday, 28 June 12
DRY BULK MARKET HIGHER ON CAPESIZE OPTIMISM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher yesterday, as the BDI (Baltic Dry Index) ended up by 0.71% to 988 points. Most ship types were up, with the ...
Wednesday, 27 June 12
DIRECTORATE GENERAL OF MINERAL AND COAL OF INDONESIA INTRODUCES ON-LINE SYSTEM FOR MINING PRODUCTS EXPORT APPROVAL
COALspot.com - Directorate General of Mineral and Coal of Indonesia has released "Clear and Clean" certificate for another 33 coal miners ...
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- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- The Treasury - Australian Government
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