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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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Tuesday, 07 August 12
2ND ANNUAL FLOATING TERMINALS
Press Release - After a ground breaking and successful launch in 2011, the 2nd Annual Floating Terminals conferenceis back to address innovation, co ...
Tuesday, 07 August 12
KRISHNAPATNAM PORT HAS DISCHARGED 122,247 MTS OF COAL IN JUST 24 HRS
COALspot.com - Keeping with the tradition of the new records that are set at the Olympic Games 2012, Krishnapatnam Port has also achieved in setting ...
Tuesday, 07 August 12
THE JAKARTA POST EDITORIAL: REVISITING THE MINING LAW
The Jakarta post, one of the leading English news paper in Indonesia writes in its editorial today, what the domestic and foreign investors had drea ...
Tuesday, 07 August 12
BARAMULTI SET TO LIST ON BOURSE IN Q4 - JP
The Jakarta Post reported that, coal miner PT Baramulti Sukses Sarana is preparing to make its shares available to the public in the fourth quarter ...
Tuesday, 07 August 12
REALM RESOURCES COMPLETES STUDY ON ITS KATINGAN RIA COAL PROJECT
COALspot.com - Realm Resources Ltd. has announced that it has completed the Project Study for the Katingan Ria Project in Central Kalimantan, Indone ...
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- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
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