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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, 12 May 12
THE SHIPPING MARKET IS UNLIKELY TO SEE A REBOUND ANYTIME SOON - VISTAAR SINGAPORE
COALspot.com - The BDI softened this week and it was down by 1.64 pct closing at 1,138 points.
The cape index was up by 2.41 pct closing at 1,61 ...
Friday, 11 May 12
POLITICAL CHANGES COULD LEAD TO TEMPORARY HALT IN SHIPPING INVESTMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The potential of changes of political leadership in many of the world’s leading economies could very well lead to significant shifts in the di ...
Thursday, 10 May 12
DRY BULK ERRATIC ON LACK OF DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept up its erratic behavior as it went down again during yesterday’s session, on a lack of direct guidance in terms o ...
Wednesday, 09 May 12
COAL INDIA SIGNS FSAS WITH 13 POWER UNITS SO FAR - PTI
Press Trust of India has reported that, coal India has so far entered into fuel supply pacts with 13 power units, including Reliance Power's Rosa P ...
Tuesday, 08 May 12
DRY BULK MARKET LOOKING FOR NEW DIRECTION THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) the main benchmark of the dry bulk shipping industry not traded at the start of this week, traders, charterers and s ...
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- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- The University of Queensland
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- MS Steel International - UAE
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
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