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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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Wednesday, 11 April 12
DRY BULK MARKET STILL SUBDUED, RECOVERY NOT YET SEEN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market entered the new week after the past days of easter holidays in western countries in a subdued mood. The industry’s benchma ...
Monday, 09 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first week of April ended with the Baltic Dry Index falling below 950 points, before Catholic Easter, and capesizes showing a modest upturn with ...
Sunday, 08 April 12
CHARTER RATES COULD CONTINUE TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI was almost at same levels closing slightly lower by 0.64 pct at 928 points.
The Cape index was up by 6.73 pct closing at ...
Friday, 06 April 12
INDONESIAN HBA FALL TO LOWEST LEVEL SINCE JANUARY 2011
COALspot.com - Indonesian HBA fall to lowest level since January 2011 this month. The monthly coal reference price for coal sales in April fal ...
Friday, 06 April 12
DRY BULK MARKET SWIFT TO HALT FALL ON RENEWED DEMAND FOR CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk managed to put a stop to the recent falls, which came as a result of a lacklustre demand for smaller vessel sizes. Although this trend ...
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- SMG Consultants - Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Australian Coal Association
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Parliament of New Zealand
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
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