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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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- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
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