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