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