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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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Thursday, 05 April 12
COAL EXPORT TAX: MATTER OF CONCERN FOR INDIA - SUNIL K KUMBHAT
COALspot.com - Since the issuance of Indonesian Mining law in 2009, miners have increased their activities in exploring , ex ...
Thursday, 05 April 12
AKR COAL FIRST EXPORT SHIPMENT OF COAL SEABORNE
PT Anugrah Karya Raya (AKR Coal) subsidiary of PT AKR Corporindo Tbk., Indonesia’s leading integrated supply chain solutions provider and larg ...
Thursday, 05 April 12
DRY BULK MARKET STALLS AS TREND IS REVERSED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has halted its month-long rally, with the BDI (Baltic Dry Index) retreating yesterday for a second consecutive session. Industry ...
Wednesday, 04 April 12
OIL MAY JUMP TO $150PB IF IRAN ATTACKED: EXPERT - KUNA / HELLENIC SHIPPING
Prices of oil will not drop below level of $100 per barrel and may jump to $150 pb in the coming two months, according to the prominent Kuwaiti expe ...
Wednesday, 04 April 12
CHURCHILL MINING TO ACCELERATE INTERNATIONAL ARBITRATION AGAINST INDONESIA
Churchill Mining plc (AIM: CHL), advises that notations on the Indonesian Supreme Court's register of cases shows the Supreme Court has rejected th ...
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- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
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- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
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- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
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- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
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- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
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- Romanian Commodities Exchange
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- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
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- San Jose City I Power Corp, Philippines
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- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
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- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Parliament of New Zealand
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Central Electricity Authority - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Planning Commission, India
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
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