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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, 30 June 12
THE FREIGHT RATES ARE EXPECTED TO BE STEADY TO FIRM NEXT WEEK - VISTAAR SINGAPORE
COALspot.com – The BDI was up by 2.66 pct (up by 26 points) closing at 1,004 points crossing the 1000 point barrier this week.
The c ...
Friday, 29 June 12
INDONESIAN PRODUCERS ARE PLANNING TO CUT PRODUCTION IF COAL PRICES FALL FURTHER
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 31.54* million tons of coal in May 2012, compared to 31.86* mill ...
Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order ...
Thursday, 28 June 12
DRY BULK MARKET HIGHER ON CAPESIZE OPTIMISM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher yesterday, as the BDI (Baltic Dry Index) ended up by 0.71% to 988 points. Most ship types were up, with the ...
Wednesday, 27 June 12
DIRECTORATE GENERAL OF MINERAL AND COAL OF INDONESIA INTRODUCES ON-LINE SYSTEM FOR MINING PRODUCTS EXPORT APPROVAL
COALspot.com - Directorate General of Mineral and Coal of Indonesia has released "Clear and Clean" certificate for another 33 coal miners ...
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- Trasteel International SA, Italy
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- The University of Queensland
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
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