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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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Wednesday, 29 August 12
COLOMBIA'S MINING BOOM: PART ONE - JOSEPH KIRSCHKE
COALspot.com - Colombia stands before one of the potentially largest, most diversified mining booms in the world. Untold reserves of gold, coal, cop ...
Wednesday, 29 August 12
SECOND HAND VESSELS IN HIGH DEMAND DESPITE SUMMER SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the slow summer season, ship owners appear to be rather keen in acquiring some modern second hand tonnage at "knock-down" prices. ...
Monday, 27 August 12
BUMI BOOKS $322.1 MILLION NET LOSS IN 1H 2012 IN SPITE OF 8.6 PERCENT INCREASE IN SALES REVENUE
PT Bumi Resources Tbk, the single largest coal producer and exporter in Indonesia announces its first half financial report for the ...
Monday, 27 August 12
OVER 200 FOREIGN COMPANIES AND ENERGY MAJORS EXPECTED AT 2ND MOGP SUMMIT IN YANGON
Singapore based CMT and Machinery & Solutions Co. Ltd (M&S) announce that the 2nd MOGP Summit will be held on 3-6 September at the Sedona ho ...
Sunday, 26 August 12
SOUTH AFRICAN COAL OVERVIEW
South Africa's indigenous energy resource base is dominated by coal.
Internationally, coal is the most widely used primary fuel, accounting for ...
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- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
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- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
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- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
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- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Vedanta Resources Plc - India
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- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
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