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Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
 Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem facing thermal electricity generators - that the tariff framework is not sustainable in the long term.
The problem centres on China's thermal or coal-fired plants, which in 2011 represented 72.5% of total electricity production of 4,692.8TWh, and are likely to remain the backbone of electricity generation for the foreseeable future. The problem is not with China's national electricity grid, which is well developed, but rather with the non-viability of the pricing mechanism for the coal-fired generators.
The Chinese thermal generators are unwilling to produce excess electricity in peak periods when their marginal generation costs are above the tariffs the government will allow them to charge the grid companies. Tariff adjustments have not been timely or sufficient despite the rising cost of coal, as the government has prioritised the management of inflation - thereby constraining profitability. The weak economics have also discouraged private-sector investment, while the state-linked thermal generators - Huaneng International ('BB+'/Stable), Datang International ('BB'/Stable), China Power International Development ('BB'/Stable), and Huadian International ('BB-'/Stable) - are now struggling with substantially weakened balance sheets.
Coal input prices for the thermal generators have increased dramatically over the past three years to end-2011, rising by an average of 16% pa. Meanwhile, the Chinese government has only allowed nationwide electricity tariffs to rise once in the last two years, by around 5% for non-residential customers in December 2011. Some tariff increases also occurred in selective provinces in April 2011, but the impact on generators' profitability was limited.
A 5% cap on annual coal price increases was introduced along with the December 2011 electricity tariff revision, but this applied only to contracted coal prices. These capped prices only represent around 30%-40% of the total needs of most thermal generators. Accordingly, large amounts of coal have to be bought on the spot market at substantially higher prices, making excess electricity production an uneconomic proposition. The substantial premium - typically 30% - on spot market prices against the capped contract coal price results in coal producers seeking ways to reduce their contracted sales in favour of spot sales, which is steadily eroding any benefit from the coal price caps.
A longer-term problem, and a potential cause of an eventual structural shortfall in generation capacity, is that limited profit - or losses - from thermal operations have since 2008 led to new capex in the industry being diverted away from thermal and into wind, hydro and vertical integration via coal mine acquisitions. A National Energy Administration (NEA) report dated 30 January 30 2012 confirmed that China's investment in thermal power assets fell again in 2011, by 26%, to CNY105.4bn. This trend, which cannot be reversed quickly due to the typical minimum two-year lead time to build new thermal capacity, is a serious concern given China's continued dependence on coal for its power generation.
The Chinese thermal generators are likely to face sustained weak operating cash flows and negative free cash generation under this heavily regulated environment, a situation which Fitch believes to be unsustainable in light of the continued growth in the Chinese economy. The agency believes that China is looking to introduce price reforms across the energy industries, but achieving a truly cost-reflective tariff regime is likely to take several more years, and will require a favourable inflationary climate. In the meantime, demand will continue to outstrip supply, even if - theoretically - the capacity exists within the generation system.
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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 nort ...
Thursday, 02 August 12
OIL & GAS COMPANIES TO MEET IN MYANMAR FOR UPDATES ON NEW ROUND OF BIDDING AND INVESTMENT POTENTIAL IN UPSTREAM OIL, GAS, AND POWER GENERATION
Press Release - 2nd MOGP Summit (Myanmar Oil, Gas & Power) will convene in Yangon from 3 – 6 September 2012, to unveil new round of biddin ...
Thursday, 02 August 12
DRY BULK MARKET RATES CONTINUE SLUMP AMID SLOWER DEMAND NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on its downward path Wednesday, as the BDI (Baltic Dry Index) kept retreating to new lows. The index was down by 2.12 perce ...
Monday, 30 July 12
DRY BULK MARKET TO REMAIN UNDER PRESSURE FOR THE REST OF 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In an interview with Hellenic Shipping News Worldwide, Mr. Yannis Pachoulis, President of the Hellenic Shipbrokers' Association, remains cautiously ...
Sunday, 29 July 12
FREIGHT MARKET MOMENTUM CONTINUES TO WEAK
COALspot.com - The freight market continued to soft this week with all the segments dropped and the BDI fell below 1,000 points and closed at 933 po ...
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Showing 4636 to 4640 news of total 6871 |
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- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
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