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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, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
Friday, 18 May 12
EXPORT TAX WILL ERODE PROFITS, INDONESIAN COAL EXEC COMPLAINS - THE JAKARTA GLOBE
The Jakarta Globe reported that, A 20 percent export duty the government has imposed on 14 mineral ore products will not only take a toll on mining ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- White Energy Company Limited
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- MS Steel International - UAE
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- PTC India Limited - India
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- VISA Power Limited - India
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