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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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Sunday, 27 May 12
THE FREIGHT MARKET FROM INDONESIA TO INDIA WAS WEAK - VISTAAR
COALspot.com - The BDI continued to fall for the fourth straight week and the BDI fell by 9.38 pct this week closing at 1,034 points.
The Cape Si ...
Sunday, 27 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS HEADING TO SOUTH DIRECTION
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries have dropped this week by 5.43 percent an ...
Saturday, 26 May 12
DRY BULK SHIP OWNERS LOOKING TO CUT BACK ON TONNAGE SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of dry bulk carriers has been the most prominent problem in the market today, pushing down rates and ‘strangling’ profita ...
Thursday, 24 May 12
DRY BULK MARKET RETREATS ON LACK OF CHINA DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market retreated yesterday on the back of lower Chinese demand for commodities such as coal and iron ore, typically hauled by dry bulk ...
Tuesday, 22 May 12
NEW ONE-YEAR TIME CHARTERS FOR TWO VESSELS OF EXCEL MARITIME CARRIERS LTD.
Excel Maritime Carriers Ltd. (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportat ...
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- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Parliament of New Zealand
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
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