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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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Monday, 11 June 12
BAHANA FORECASTS THE COAL PRICES WILL FALL FURTHER
COALspot.com - Growing US coal supplies + low shipping costs = Asia as target.
According to Irwan Budiarto analyst at Bahana Securities, US ...
Monday, 11 June 12
ASIAN COAL TRADING COMMUNITY EMBRACES API 5 AND API 8
Press Release - The Asian coal trading community is embracing the API 5 and API 8 indexes for its swap contracts.
The API 5 index represents 5,50 ...
Sunday, 10 June 12
FREIGHT MARKET EXPECTED TO REMAIN WEAK FOR NEXT FEW WEEKS - VISTAAR
COALspot.com - The BDI continued to fall this week and down by 2.99 pct closing at 877 points.
The Cape index also was down by 5.78 pct closing a ...
Friday, 08 June 12
ESSAR ENERGY RECEIVES FINAL APPROVAL FOR INDONESIAN COAL BLOCK
COALspot.com - Essar Energy plc, the India-focused integrated energy company, today announced that it has received final ‘Pinjam Pakai’ ...
Friday, 08 June 12
MINISTER DENIES COAL EXPORT TAX PLAN, ENDORSES RESTRICTIONS - THE JAKARTA POST
The Jakarta post, one of the leading english news paper in Indonesia reported that, Energy and Mineral Resources Minister Jero Wacik has denied that ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- The University of Queensland
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Australian Coal Association
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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