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