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