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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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Friday, 12 October 12
INVESTMENT OPPORTUNITIES OCCUR IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although 2012 has by now evolved into one of the most challenging years for global shipping industry, ship owners are scouting the second hand ship ...
Thursday, 11 October 12
SINGAPORE BASED COAL SOURCE AND SHIPPING BAGS 300K MT IMPORTED COAL SUPPLY CONTRACT FROM TNPL
COALspot.com - India-based paper manufacturer Tamil Nadu Newsprint and Papers Limited has awarded a tender for 300,000 mt of imported steam co ...
Thursday, 11 October 12
PANAMAX : SINCE LAST WEEK RATES HAS FIRMED FOR ALL TRADES - FEARNLEYS AS
Handy
The Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Continent to East Med were around USD 14k and B ...
Thursday, 11 October 12
DRY BULK MARKET STEADY AFTER CHINESE HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn't yet staged a solid rebound after last week's holidays in China, as many would have expected. Indeed, many analysts were ...
Wednesday, 10 October 12
NEW BUILDING MARKET ON A QUIET WEEK, DUE TO ASIAN HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The newbuilding ordering activity has been more than quite during the course of the past week, as a result of holidays in both Korea and China. Acco ...
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- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Economic Council, Georgia
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Aditya Birla Group - India
- White Energy Company Limited
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Planning Commission, India
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
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