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