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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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Saturday, 12 May 12
THE SHIPPING MARKET IS UNLIKELY TO SEE A REBOUND ANYTIME SOON - VISTAAR SINGAPORE
COALspot.com - The BDI softened this week and it was down by 1.64 pct closing at 1,138 points.
The cape index was up by 2.41 pct closing at 1,61 ...
Friday, 11 May 12
POLITICAL CHANGES COULD LEAD TO TEMPORARY HALT IN SHIPPING INVESTMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The potential of changes of political leadership in many of the world’s leading economies could very well lead to significant shifts in the di ...
Thursday, 10 May 12
DRY BULK ERRATIC ON LACK OF DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept up its erratic behavior as it went down again during yesterday’s session, on a lack of direct guidance in terms o ...
Wednesday, 09 May 12
COAL INDIA SIGNS FSAS WITH 13 POWER UNITS SO FAR - PTI
Press Trust of India has reported that, coal India has so far entered into fuel supply pacts with 13 power units, including Reliance Power's Rosa P ...
Tuesday, 08 May 12
DRY BULK MARKET LOOKING FOR NEW DIRECTION THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) the main benchmark of the dry bulk shipping industry not traded at the start of this week, traders, charterers and s ...
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- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
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