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Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
 Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem facing thermal electricity generators - that the tariff framework is not sustainable in the long term.
The problem centres on China's thermal or coal-fired plants, which in 2011 represented 72.5% of total electricity production of 4,692.8TWh, and are likely to remain the backbone of electricity generation for the foreseeable future. The problem is not with China's national electricity grid, which is well developed, but rather with the non-viability of the pricing mechanism for the coal-fired generators.
The Chinese thermal generators are unwilling to produce excess electricity in peak periods when their marginal generation costs are above the tariffs the government will allow them to charge the grid companies. Tariff adjustments have not been timely or sufficient despite the rising cost of coal, as the government has prioritised the management of inflation - thereby constraining profitability. The weak economics have also discouraged private-sector investment, while the state-linked thermal generators - Huaneng International ('BB+'/Stable), Datang International ('BB'/Stable), China Power International Development ('BB'/Stable), and Huadian International ('BB-'/Stable) - are now struggling with substantially weakened balance sheets.
Coal input prices for the thermal generators have increased dramatically over the past three years to end-2011, rising by an average of 16% pa. Meanwhile, the Chinese government has only allowed nationwide electricity tariffs to rise once in the last two years, by around 5% for non-residential customers in December 2011. Some tariff increases also occurred in selective provinces in April 2011, but the impact on generators' profitability was limited.
A 5% cap on annual coal price increases was introduced along with the December 2011 electricity tariff revision, but this applied only to contracted coal prices. These capped prices only represent around 30%-40% of the total needs of most thermal generators. Accordingly, large amounts of coal have to be bought on the spot market at substantially higher prices, making excess electricity production an uneconomic proposition. The substantial premium - typically 30% - on spot market prices against the capped contract coal price results in coal producers seeking ways to reduce their contracted sales in favour of spot sales, which is steadily eroding any benefit from the coal price caps.
A longer-term problem, and a potential cause of an eventual structural shortfall in generation capacity, is that limited profit - or losses - from thermal operations have since 2008 led to new capex in the industry being diverted away from thermal and into wind, hydro and vertical integration via coal mine acquisitions. A National Energy Administration (NEA) report dated 30 January 30 2012 confirmed that China's investment in thermal power assets fell again in 2011, by 26%, to CNY105.4bn. This trend, which cannot be reversed quickly due to the typical minimum two-year lead time to build new thermal capacity, is a serious concern given China's continued dependence on coal for its power generation.
The Chinese thermal generators are likely to face sustained weak operating cash flows and negative free cash generation under this heavily regulated environment, a situation which Fitch believes to be unsustainable in light of the continued growth in the Chinese economy. The agency believes that China is looking to introduce price reforms across the energy industries, but achieving a truly cost-reflective tariff regime is likely to take several more years, and will require a favourable inflationary climate. In the meantime, demand will continue to outstrip supply, even if - theoretically - the capacity exists within the generation system.
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Monday, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
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