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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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Thursday, 20 September 12
DRY BULK INCHES FORWARD AFTER WEEKS OF BELOW PAR PERFORMANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has started to revive from its ashed, as the past couple of days, traders have reported an increased activity from China, result ...
Wednesday, 19 September 12
CHURCHILL STRENGTHENS LITIGATION TEAM WITH APPOINTMENT OF NICHOLAS SMITH AS MANAGING DIRECTOR
COALspot.com - Churchill Mining PLC (AIM: CHL) has announced that, Mr Nicholas Smith has joined the board of the Company and has been appointed as t ...
Wednesday, 19 September 12
DRY BULK TERMINALS SINGAPORE
Press Release - Dry bulk terminals are used all around the world to handle large quantities of bulk materials, like minerals, grains, etc. In today& ...
Tuesday, 18 September 12
JORC CODE REVISION - EXPOSURE DRAFT RELEASED FOR COMMENT
COALspot.com - The Australasian Joint Ore Reserves Committee (JORC) has today released for public comment the exposure draft of the JORC Code (2012) ...
Monday, 17 September 12
YEAR TO DATE, BUMA PRODUCED 231.1 MILLION BCM OF OVERBURDEN
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 31.5 million bcm (+6.0 percent YoY) overburden in August 2012 totaled 31.5 million bcm ( ...
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- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Australian Coal Association
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Romanian Commodities Exchange
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- MS Steel International - UAE
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
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