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