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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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Sunday, 15 April 12
THE SPOT FIXTURE RATES FOR SUPRAMAX IN SE ASIA SAW SOME SOFTENING OF CHARTER RATES - VISTAAR
COALspot.com - The market seem to be holding and except for Supramax and handy size index all other index was up with BDI up by 4.74 pct closing at ...
Friday, 13 April 12
MINERS OPPOSE GOVTS EXPORT TAX PLAN - THE JAKARTA POST
The Jakarta Post reported that, Indonesian mining companies have strongly protested the government’s plan to impose a 25 percent export tax on ...
Friday, 13 April 12
S&P CAUTIONS AGAINST NEW INDONESIAN MINING REGULATIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Investors may have expressed concerns about looming new mining regulations, but ratings agency Standard & Poor& ...
Thursday, 12 April 12
FIRST QUARTER OF 2012 SAW AN ADDITIONAL 24.2 MILLION DWT OF DRY BULK CARRIERS ENTERING THE FLEET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The inflow of newbuilt dry bulk vessels was larger than expected in the first quarter of 2012. As much as 24.2 million DWT were added to the fleet. ...
Wednesday, 11 April 12
TWO PERCENT OF IBP CONCESSION CONTAINS 42 MMT OF COAL
COALspot.com - 42.35 million ton of coal found in just 2% of PT Insani Bara Perkasa’s total concession area of 24,477 hectare.
Accord ...
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- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Planning Commission, India
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- PTC India Limited - India
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
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