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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, 21 July 12
INDONESIAN COMPANIES ABM INVESTAMA AND AVRA ASIA WORK OUT LONG-TERM CONTRACT - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading English news papaer in Indonesia reported that, ABM Investama, a company with diversified interests in coal mi ...
Friday, 20 July 12
INDONESIA-INDIA SUPRAS BEING FIXED AT $ 10K
Handy
After a stable last week, the Handysize market has experienced softening rates in the Atlantic. Ships are ballasting from India into the Atla ...
Friday, 20 July 12
HANDYSIZES PROVE RATHER ATTRACTIVE AMONG OTHER SHIPS, IN TERMS OF FUTURE RETURNS ON INVESTMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Handysize segment of the dry bulk market appears to offer the best incentive among other ship types, for a ship owners to invest in, says Interm ...
Wednesday, 18 July 12
TAIWAN POWER COMPANY TO IMPORT 0.588 MILLION TONS OF LOW ASH AND EXTRA LOW SULFUR SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 588,000 MT tons of extra low sulfur sub-bituminous coal for Taipower thermal power plant thro ...
Wednesday, 18 July 12
SHIP PRICES HAVE FALLEN RAPIDLY THIS YEAR, FAVORING INVESTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The price for a 5 year old Capesize dry bulk carrier of 172,000 dwt has fallen to about $33,4mil from $42.9 at the end of June 2011, while at end of ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
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