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