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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, 07 May 12
INDONESIAN HBA FALL AGAIN IN MAY 2012
COALspot.com - Indonesian HBA fall again to lowest level since January 2011 in May 2012. The monthly coal reference price for coal sales in Ma ...
Sunday, 06 May 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA SWAPS SLIGHTLY DROP THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries slightly dropped this week.
According ...
Sunday, 06 May 12
S7 & S8 ROUTES LIKELY TO BE FIRM NEXT WEEK VISTAAR SINGAPORE
COALspot.com - The BDI remained flat this week and was up just by 1 point closing at 1,157 points.
The cape size index was up by 5.14 pct closing ...
Sunday, 06 May 12
EXPORT DUTY ON MINERAL FINALLY TO BECOME EFFECTIVE NEXT WEEK
COALspot.com - Mineral ore exporters of Indonesia ( only IUP holders) are required to obtain recommendation letter from the energy and mineral ...
Friday, 04 May 12
DEMOLITION KEY FOR DRY BULK MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The overflow of newbuilding vessels which “spilled over” into 2012 from 2011 brought the dry bulk market to a near collapse level at the ...
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- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
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- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
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- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- VISA Power Limited - India
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- White Energy Company Limited
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
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