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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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Wednesday, 29 August 12
COLOMBIA'S MINING BOOM: PART ONE - JOSEPH KIRSCHKE
COALspot.com - Colombia stands before one of the potentially largest, most diversified mining booms in the world. Untold reserves of gold, coal, cop ...
Wednesday, 29 August 12
SECOND HAND VESSELS IN HIGH DEMAND DESPITE SUMMER SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the slow summer season, ship owners appear to be rather keen in acquiring some modern second hand tonnage at "knock-down" prices. ...
Monday, 27 August 12
BUMI BOOKS $322.1 MILLION NET LOSS IN 1H 2012 IN SPITE OF 8.6 PERCENT INCREASE IN SALES REVENUE
PT Bumi Resources Tbk, the single largest coal producer and exporter in Indonesia announces its first half financial report for the ...
Monday, 27 August 12
OVER 200 FOREIGN COMPANIES AND ENERGY MAJORS EXPECTED AT 2ND MOGP SUMMIT IN YANGON
Singapore based CMT and Machinery & Solutions Co. Ltd (M&S) announce that the 2nd MOGP Summit will be held on 3-6 September at the Sedona ho ...
Sunday, 26 August 12
SOUTH AFRICAN COAL OVERVIEW
South Africa's indigenous energy resource base is dominated by coal.
Internationally, coal is the most widely used primary fuel, accounting for ...
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- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Australian Coal Association
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Planning Commission, India
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- VISA Power Limited - India
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