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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, 18 May 12
KOREA EAST WEST POWER LOOKING FOR TOTAL 2.6 MILLION TONS OF 4600 NAR COAL AT FIXED PRICE FOR 5 YEARS
COALspot.com - Korea East West Power Co., Ltd is inviting bids to supply of 520,000 Metric Tons (per annum) of minimum 4,600 kcal/kg coal of N ...
Friday, 18 May 12
NICKEL ORE CARGOES ARE NOT SEEN IN MARKET ANYMORE DUE TO ON-GOING INDONESIAN BAN - FEARNLEYS AS
Handy
The market remained variable.
Fronthaul voyages both from Baltic and Black Sea paid over USD 18k/day. From USG to Cont tonnage would get ...
Thursday, 17 May 12
COAL MINERS OPPOSE EXPORT TAX, SUGGEST OUTPUT QUOTA - THE JAKARTA POST
The Jakarta Post reported that, coal miners have suggested that the government apply a production quota instead of implementing an export tax in ord ...
Thursday, 17 May 12
DRY BULK MARKET STILL LOOKING FOR NEW DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on moving sideways during this week, with the mixed performance across all segments. Yesterday, the industry’s be ...
Tuesday, 15 May 12
POTENTIAL BOOM OF CHINAS COAL IMPORTS COULD PROVIDE FURTHER SUPPORT TO DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been moving sideways during the past week with the industry’s benchmark, the Baltic Dry Index (BDI) losing 0.53% on th ...
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- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
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