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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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Tuesday, 07 August 12
2ND ANNUAL FLOATING TERMINALS
Press Release - After a ground breaking and successful launch in 2011, the 2nd Annual Floating Terminals conferenceis back to address innovation, co ...
Tuesday, 07 August 12
KRISHNAPATNAM PORT HAS DISCHARGED 122,247 MTS OF COAL IN JUST 24 HRS
COALspot.com - Keeping with the tradition of the new records that are set at the Olympic Games 2012, Krishnapatnam Port has also achieved in setting ...
Tuesday, 07 August 12
THE JAKARTA POST EDITORIAL: REVISITING THE MINING LAW
The Jakarta post, one of the leading English news paper in Indonesia writes in its editorial today, what the domestic and foreign investors had drea ...
Tuesday, 07 August 12
BARAMULTI SET TO LIST ON BOURSE IN Q4 - JP
The Jakarta Post reported that, coal miner PT Baramulti Sukses Sarana is preparing to make its shares available to the public in the fourth quarter ...
Tuesday, 07 August 12
REALM RESOURCES COMPLETES STUDY ON ITS KATINGAN RIA COAL PROJECT
COALspot.com - Realm Resources Ltd. has announced that it has completed the Project Study for the Katingan Ria Project in Central Kalimantan, Indone ...
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- Central Electricity Authority - India
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- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
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- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
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- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
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- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
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