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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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Saturday, 23 March 13
WORLD COAL TRADE FIRST PASSES 1 BILLION TONS IN 2012 - VEREIN DER KOHLENIMPORTEURE E.V
Press Release: Hard coal imports to Germany on the previous year's level in spite of regenerative energies. Imports for power plants at an all-time ...
Thursday, 21 March 13
HANDY : RBCT ROUNDS FIXED AT $ 9000 + 300K BB - FEARNRESEARCH
Handy
The Atlantic market remains firm with cargoes seen to support healthy rates as per last week. The USG-Feast was at USD 25k and Black Sea-Feas ...
Wednesday, 20 March 13
NTPC TO IMPORT SEVEN MILLION TONS COAL FOR FOUR MONTHS
COALspot.com : NTPC Limited (formerly National Thermal Power Corporation) is the largest Indian state-owned electric utilities company has awarded&n ...
Tuesday, 19 March 13
CHINA GAS PRICE REFORMS AND APAC GAS PRICING - FITCH STREET VIEW
Fitch Ratings says pricing reform in the Chinese gas sector is unlikely to materially impact gas distributors' margins, and low gas prices in the U ...
Tuesday, 19 March 13
NEWCASTLE COAL EXPORTS FALL BY 4.27 PERCENT ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,365,561 MT of thermal and coking coal for week ended 0700 hours 18 March 2013, Newcast ...
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- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- PTC India Limited - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
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