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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, 08 September 12
INDO INDIA ROUTE FREIGHT FOR SUPRAMAX REMAINS STRONG - CAPT. REDDY
COALspot.com - The freight market overall remained weak and except for cape index all other sectors were down. The biggest drop was in the Panamax s ...
Saturday, 08 September 12
RIO TINTO COMPLETES ACQUISITION OF BHP BILLITON'S INTERESTS IN RICHARDS BAY MINERALS
Rio Tinto has doubled its holding in Richards Bay Minerals (RBM) following the completion of its acquisition of BHP Billiton’s entire inte ...
Friday, 07 September 12
HBA GAINS $ 1.56 PER MT IN SEPTEMBER
COALspot.com - The Indonesian government’s declared coal reference price has gained US$ 1.56 per MT M-o-M. This is the first gain ...
Thursday, 06 September 12
SOME ANCHORED PANAMAX VESSELS WAITING FOR CARGOS TO COME
Handy
According to Fearnleys weekly report, in the smaller segments Fearnleys sees little to no changes since last week. There are still entering s ...
Thursday, 06 September 12
DRY BULK CARRIERS STILL IN HIGH DEMAND AMONG SHIP OWNERS, BUT NEWBUILDING ACTIVITY SLIDES IN AUGUST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The slide of the dry bulk market this year hasn't abated ship owners' appetite for dry bulk carriers, as evidenced by the steady interest expresse ...
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- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- PTC India Limited - India
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- VISA Power Limited - India
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
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