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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, 22 December 12
FALL IN CAPE AND PANAMAX RATES DRAG BDI INDEX - VISTAAR
COALspot.com - The freight market further softened this week closing at 700 points (down by 10.71 pct). The cape index continued to fall and w ...
Saturday, 22 December 12
DELTA DUNIA MAKMUR PRODUCED 3.2 MILLION TONS OF COAL IN NOVEMBER' 12
COALspot.com - PT Delta Dunia Makmur Tbk., has removed 28.1 million bcm* (+1.8% YoY) of Overburden in November 2012 while coal production was at 3.2 ...
Friday, 21 December 12
JORC CODE, 2012 EDITION NOW FINALIZED
COALspot.com - The JORC Committee has announced that, the completion of the review of the JORC Code of 2012 Edition.
The JORC Code, 2012 Ed ...
Thursday, 20 December 12
COAL CLOSING IN ON OIL AS WORLD'S TOP ENERGY SOURCE BY 2017
COALspot.com - Coal’s share of the global energy mix continues to rise, and by 2017 coal will come close to surpassing oil as the world’ ...
Thursday, 20 December 12
CHINA'S IRON ORE AND COAL DEMAND WILL SHAPE THE CAPESIZE DRY BULK TRADE DURING 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the best efforts from ship owners to help alleviate the current tonnage oversupply issue in the dry bulk segment, especially in the larger v ...
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- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Planning Commission, India
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- The University of Queensland
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Australian Coal Association
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
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