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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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- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
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