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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, 30 June 12
THE FREIGHT RATES ARE EXPECTED TO BE STEADY TO FIRM NEXT WEEK - VISTAAR SINGAPORE
COALspot.com – The BDI was up by 2.66 pct (up by 26 points) closing at 1,004 points crossing the 1000 point barrier this week.
The c ...
Friday, 29 June 12
INDONESIAN PRODUCERS ARE PLANNING TO CUT PRODUCTION IF COAL PRICES FALL FURTHER
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 31.54* million tons of coal in May 2012, compared to 31.86* mill ...
Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order ...
Thursday, 28 June 12
DRY BULK MARKET HIGHER ON CAPESIZE OPTIMISM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher yesterday, as the BDI (Baltic Dry Index) ended up by 0.71% to 988 points. Most ship types were up, with the ...
Wednesday, 27 June 12
DIRECTORATE GENERAL OF MINERAL AND COAL OF INDONESIA INTRODUCES ON-LINE SYSTEM FOR MINING PRODUCTS EXPORT APPROVAL
COALspot.com - Directorate General of Mineral and Coal of Indonesia has released "Clear and Clean" certificate for another 33 coal miners ...
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- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Planning Commission, India
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
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