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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, 16 September 12
GLOBAL LOW DEMAND ; INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS DIP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.345 percent W-O-W on Friday, 14 September 2012, closing but gai ...
Sunday, 16 September 12
THE FREIGHT RATES FROM INDONESIA TO INDIA EXPECTED TO BE STEADY - VISTAAR
COALspot.com - The freight market was mixed with most indices closing positive except for the Panamax index.
The main sentiment seems to be ...
Saturday, 15 September 12
FINANCE MINISTRY OPPOSES TAX INCENTIVE PLAN FOR COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry has turned down the idea of providing a fiscal incentive to the country’s coal mining ind ...
Friday, 14 September 12
DRY BULK MARKET LOOKS TOWARDS CHINA FOR SOME POSITIVE NEWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market freight rates submerged underwater for a large part of the year, dry bulk owners are looking for some positive enhancement ...
Friday, 14 September 12
GOVT OFFERS CONDITIONAL TAX HOLIDAY TO AILING COAL MINERS - JP
The Jakarta Post, one of the leading English news paper in Indonesia reported that, acknowledging difficulties encountered by coal miners due to a p ...
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- MS Steel International - UAE
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- The University of Queensland
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Australian Coal Association
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
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