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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, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, alth ...
Tuesday, 12 June 12
ITACHA RESOURCES BUYS SARANA MARINE - INSIDER STORIES
Insider Stories reported that, coal mining company PT Itacha Resources, a joint venture between Anthoni Salim and Glenn Yusuf, announced that Itacha ...
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- Minerals Council of Australia
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
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