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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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Friday, 22 June 12
COAL: THE BACKBONE OF MODERN ELECTRICITY - ECOAL
Coal has been described as the "forgotten fuel," perhaps because many aren't aware of the huge role it plays in powering the global econo ...
Thursday, 21 June 12
DRY BULK MARKET ON THE RISE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was on the rise once again yesterday, with the Baltic Dry Index (BDI), the industry’s benchmark, rising by 18 points, or 1 ...
Wednesday, 20 June 12
BDI MOVING HIGHER, PANAMAX AND SUPRAMAX VESSELS STRONGER, CAPESIZE RATES NEAR TO HISTORICAL LOWS OF DECEMBER 2008 - MARIA BERTZELETOU, HELLENIC SHIPPING
The dry market seems to follow the dynamic of the previous week with the Baltic Dry Index showing daily increases since June 8th, but is still stand ...
Tuesday, 19 June 12
SMALLER DRY BULK CARRIERS LIFT UP MARKET, PANAMAXES SET TO FALL SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Another rise for the dry bulk market was evident yesterday, as the industry’s benchmark, the BDI (Baltic Dry Index) was up for a ninth straigh ...
Sunday, 17 June 12
S7 & S8 ROUTES ARE LIKELY TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI gained some increase after continues fall for several weeks.
The BDI increased by 47 points (up by 5.36 pct) closing at 92 ...
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- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Australian Coal Association
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
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