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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, 29 April 12
THE FREIGHT MARKET EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The BDI continued to go up with the support of Panamax/Supramax and was up by 8.34 pct closing at 1,156 points.
The cape index was ...
Sunday, 29 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS FOR MAY 2012 DELIVERY WAS STABLE THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps for May deliveries stable this week, according to DSP of SGX AsiaClear OTC Coal Swaps. In the me ...
Friday, 27 April 12
BUKIT ASAMS NET INCOME UP 14% IN 1Q 2012 (UNAUDITED)
Press Release - PT Bukit Asam (Persero) Tbk, announced the Consolidated Financial Statements and Subsidiaries per 31 March 2012 (Unaudited).
Reve ...
Thursday, 26 April 12
AUSTRALIAS COKAL EXPANDS MET COAL POTENTIAL INTO WEST KALIMANTAN
COALspot.com - Global metallurgical coal group Cokal Limited (Cokal) (ASX:CKA) announced today it has completed the acquisition of 75.2% of PT Silan ...
Thursday, 26 April 12
BUKIT ASAMS 1Q OPERATING PROFIT MARGIN HAS INCREASED BY 6% TO RP. 1 TRILLION
COALspot.com - PT. Bukit Asam (Persero), the Indonesia’s state owned coal miner's 1Q, 2012 revenue has increased by 31% to Rp. 3.02 trillion ...
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- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Australian Coal Association
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
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