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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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Monday, 19 November 12
GOVT PREPARES TO FACE ANOTHER SUIT ON MINING LAW - THE JAKARTA POST
The government is gearing up to face a complaint on the 2009 Mining Law prepared by the same organization that previously brought down upstream oil ...
Monday, 19 November 12
IHS MCCLOSKEY ASIA PACIFIC COAL OUTLOOK CONFERENCE 2012
With the current global oversupply of thermal coal showing no signs of abating and spot prices falling to a two-year low, concerns are growing that ...
Sunday, 18 November 12
INDONESIAN SUB BITUMINOUS COAL SWAPS FOR JANUARY 2013 DELIVERY GAINS 1.29 PERCENT WOW
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for January 2013 delivery gains 1.29 percent WoW and 0.25 percent DoD on Friday, 16 Novembe ...
Saturday, 17 November 12
THE SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA ARE EXPECTED TO BE UP NEXT WEEK - VISTAAR
COALspot.com - This week market sentiments ended positive with all the segments ending higher except for handy size which was almost at same levels ...
Saturday, 17 November 12
RECORD DEMOLITION ACTIVITY SEEKS TO CURB TONNAGE OVERSUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
This year will prove to be another record-breaker in terms of scrapping of older vessels across all shipping segments, as the equally feverish pace ...
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- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
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- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Australian Coal Association
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- PTC India Limited - India
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
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