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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, 14 July 12
FREIGHT MARKET SEEMS TO BE QUITE VOLATILE - VISTAAR
COALspot.com - The market seems to be quite volatile with the trend changing almost every week. This week all the segments were down except for Pana ...
Friday, 13 July 12
TRANSCOAL MINERGY HAS RECEIVED PMA STATUS IN INDONESIA
COALspot.com - PT Transcoal Minergy (“TCM”) has received official foreign owned company status from the Capital Investment Coordinating ...
Thursday, 12 July 12
LACK OF CAPESIZE DEMAND DRAGS DRY BULK MARKET LOWER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A lack of demand for the larger Capesize dry bulk carriers had as a result the fall of the industry’s benchmark, the BDI (Baltic Dry Index), w ...
Thursday, 12 July 12
RIO TINTO'S SENIOR MANAGEMENT CHANGES
COALspot.com - Rio Tinto is making changes to its senior management team as chief financial officer (CFO) Guy Elliott has decided to retire at the e ...
Thursday, 12 July 12
SOUTHGOBI RESOURCES ANNOUNCES NOTICE OF INVESTMENT DISPUTE FILED AGAINST MONGOLIAN GOVERNMENT
Press Release - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi”) announced today that SGQ Coal Investment Pte. Ltd., a wholly ...
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- Videocon Industries ltd - India
- Xindia Steels Limited - India
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- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
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- Ministry of Mines - Canada
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- Parry Sugars Refinery, India
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- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
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- Mintek Dendrill Indonesia
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- Sindya Power Generating Company Private Ltd
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- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
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- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
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- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Minerals Council of Australia
- Parliament of New Zealand
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- PTC India Limited - India
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Australian Coal Association
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
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