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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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Friday, 01 June 12
ADARO BUYS MAJORITY STAKE IN AFFILIATED BHAKTI ENERGI - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk entered into an option to provide a convertible loan of up to US$500 million for a period of 3 ye ...
Thursday, 31 May 12
DRY BULK MARKET UNABLE TO FIND NEW SUPPORT TO REACH HIGHER LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been unable to find new support and recover to higher levels during these past few days. As a result, the Baltic Dry Index ( ...
Wednesday, 30 May 12
ORPHEUS RAISES $2.24M TO ADVANCE INDONESIAN COAL PRODUCTION ASSETS
• $2.24 million raised from a placement to new and existing institutional and sophisticated investors from Australia and overseas
• Funds ...
Wednesday, 30 May 12
ARPENI SECURES TRANSSHIPMENT CONTRACT FROM BARUNA DIRGA
Insider Stories reported that, shipping operator PT Arpeni Pratama Ocean Line Tbk (APOL) has secured a 1-year coal transhipment contract of 4 millio ...
Monday, 28 May 12
COAL EXPORTS ARE JUMPING HIGHER, BUT PRICES ARE FALLING LOWER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31.86* million tons of coal in April 2012, compared to 30.64* million tons i ...
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- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- The University of Queensland
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
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