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