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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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Friday, 27 July 12
PACIFIC MARKET REMAINED FLAT - FEARNLEYS AS
Handy
The Atlantic market continued its downward trend from last week with what appears to be a summer lull across the board. A trip from the USG t ...
Wednesday, 25 July 12
BUKIT ASAMS H1 REVENUE JUMPED BY 13 PERCENT
COALspot.com - PT Bukit Asam (Persero), Tbk., the state owned coal miner's revenue in H1 2012, has jumped 13 percent to IDR 5.79 trillion (approxim ...
Wednesday, 25 July 12
BUMI RESOURCES MINERALS SECURED PINJAM PAKAI FOR ITS ZINC AND LEAD PROJECT
COALspot.com - PT Bumi Resources Minerals Tbk. ("BRMS" or "the Company") today reported that its 80% owned subsidiary, PT Dairi ...
Tuesday, 24 July 12
SHIP OWNERS WAITING FOR SHIP PRICES TO FALL FURTHER BEFORE MOVING IN MORE AGGRESSIVELY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the summer season already well under way and many ship owners getting ready for the autumn, the sale & purchasing activity of second hand v ...
Monday, 23 July 12
NTPC INVITES BIDS FOR 2.6 MILLION TONS OF LOW MOISTURE IMPORTED COAL
COALspot.com - India’s largest electricity generator, NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government ...
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- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- The University of Queensland
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- PTC India Limited - India
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
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