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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, 08 June 12
NO IMMEDIATE IMPACT ON ADARO'S RATING FROM BEP TRANSACTION - FITCH RATINGS
Fitch Ratings has said that PT Adaro Indonesia's (Adaro, 'BB+'/ Stable) ratings are not immediately affected by its parent PT Adaro Energy Tbk's ...
Thursday, 07 June 12
DRY BULK MARKET FALLS FOR 10 STRAIGHT SESSION ON OVERSUPPLY PROBLEMS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A resurgence of oversupply, coupled with national holidays in various parts of the world has contributed to yet another fall of the dry bulk market ...
Thursday, 07 June 12
COAL EXPORT TAX NOT RATIONAL: MINISTER - THE JAKARTA POST
Trade Minister Gita Wirjawan has criticized as irrational the idea to restrict coal exports by imposing an export tax, According to The Jakarta post ...
Thursday, 07 June 12
BY 2022 PLN IS EXPECTED TO BURN AROUND 125 MILLION TONS OF COAL
COALspot.com - Indonesia's state owned electricity company's (PLN) coal consumption is expected to reach 125.7 million tons by 2012.
Nur Pamudj ...
Wednesday, 06 June 12
INDONESIAN GOVERNMENT'S DECLARED COAL PRICES CONTINUING ITS DECLINE
COALspot.com - Indonesian HBA fell to lowest level since January 2011 in June 2012. The monthly coal reference price for coal sales this month ...
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- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Economic Council, Georgia
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
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