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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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Monday, 25 June 12
RIO TINTO MAKES FIRST COAL SHIPMENT FROM MOZAMBIQUE
Rio Tinto has started exporting premium hard coking coal from its Benga Mine in the Moatize Basin in Mozambique. The first shipment of 34,000 tonnes ...
Sunday, 24 June 12
SUPRAMAX FREIGHT MARKET FIRMED UP FROM INDONESIA TO INDIA - VISTAAR
COALspot.com - This week all the segments gained and marked was firm in the Supramax and Handy size sector, where as the Cape and Panamax inde ...
Saturday, 23 June 12
COAL PRICES APPETITE FOR ROLLER-COASTER RIDES
COALspot.com - SGX AsiaClear OTC Coal Swaps have suffered something of a roller-coaster ride in terms of prices during this week. SGX’s Indone ...
Friday, 22 June 12
PRESENT SPOT WEAKNESS IS TEMPORARY, SEASONAL AND RISE AS WINTER APPROACHES - BUMI
COALspot.com - PT Bumi Resources Tbk, the world’s one of the largest coal producer and Indonesia’s largest multi grade coal miner has no ...
Friday, 22 June 12
GLOBAL ACTION NEEDED ON ENERGY POVERTY - WORLD COAL
Eradicating energy poverty is possibly the biggest challenge facing the world today. Like climate change it can only be addressed with a concerted g ...
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- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- The University of Queensland
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- PTC India Limited - India
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
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