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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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Saturday, 21 July 12
INDONESIAN COMPANIES ABM INVESTAMA AND AVRA ASIA WORK OUT LONG-TERM CONTRACT - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading English news papaer in Indonesia reported that, ABM Investama, a company with diversified interests in coal mi ...
Friday, 20 July 12
INDONESIA-INDIA SUPRAS BEING FIXED AT $ 10K
Handy
After a stable last week, the Handysize market has experienced softening rates in the Atlantic. Ships are ballasting from India into the Atla ...
Friday, 20 July 12
HANDYSIZES PROVE RATHER ATTRACTIVE AMONG OTHER SHIPS, IN TERMS OF FUTURE RETURNS ON INVESTMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Handysize segment of the dry bulk market appears to offer the best incentive among other ship types, for a ship owners to invest in, says Interm ...
Wednesday, 18 July 12
TAIWAN POWER COMPANY TO IMPORT 0.588 MILLION TONS OF LOW ASH AND EXTRA LOW SULFUR SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 588,000 MT tons of extra low sulfur sub-bituminous coal for Taipower thermal power plant thro ...
Wednesday, 18 July 12
SHIP PRICES HAVE FALLEN RAPIDLY THIS YEAR, FAVORING INVESTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The price for a 5 year old Capesize dry bulk carrier of 172,000 dwt has fallen to about $33,4mil from $42.9 at the end of June 2011, while at end of ...
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- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- The University of Queensland
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
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