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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, 03 July 12
DRY BULK MARKET INCHED FORWARD AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched forward at the beginning of the new week, prior to the US holidays regarding the celebration of the 4th of July, which is ...
Monday, 02 July 12
ORPHEUS STRENGTHENS REVENUE STREAM WITH NEW ROYALTY AGREEMENT AT THE B2 COAL PROJECT
Orpheus Energy (ASX:OEG) is pleased to advise that it has executed a life of mine Royalty Agreement with Indonesian mining contractor PT Debbia Mini ...
Monday, 02 July 12
DRY BULK DEMAND TO RISE TO 3.6 BILLION TONNES IN 2012, BUT NEW BUILDING DELIVERIES ARE
In its latest analysis on the dry bulk market fundamentals, DVB Bank said that dry bulk cargo demand is forecast to rise to approximately 3.6 billio ...
Sunday, 01 July 12
AUSTRALIAS CARBON TAX - SUNIL K KUMBHAT
COALspot.com - Climate Change
Climate change and global warming have now become buzzwords the world over. The disastrous consequences for global ...
Sunday, 01 July 12
DSP OF SGX ASIACLEAR OTC COAL SWAP'S THIS WEEKS MOVEMENTS SLIGHTLY POSITIVE
COALspot.com - SGX AsiaClear OTC Coal Swaps have recovered slightly this week and Q4 deliveries are also showing positive direction.
SGX’s ...
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- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- The University of Queensland
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- White Energy Company Limited
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