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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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Wednesday, 11 April 12
DRY BULK MARKET STILL SUBDUED, RECOVERY NOT YET SEEN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market entered the new week after the past days of easter holidays in western countries in a subdued mood. The industry’s benchma ...
Monday, 09 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first week of April ended with the Baltic Dry Index falling below 950 points, before Catholic Easter, and capesizes showing a modest upturn with ...
Sunday, 08 April 12
CHARTER RATES COULD CONTINUE TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI was almost at same levels closing slightly lower by 0.64 pct at 928 points.
The Cape index was up by 6.73 pct closing at ...
Friday, 06 April 12
INDONESIAN HBA FALL TO LOWEST LEVEL SINCE JANUARY 2011
COALspot.com - Indonesian HBA fall to lowest level since January 2011 this month. The monthly coal reference price for coal sales in April fal ...
Friday, 06 April 12
DRY BULK MARKET SWIFT TO HALT FALL ON RENEWED DEMAND FOR CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk managed to put a stop to the recent falls, which came as a result of a lacklustre demand for smaller vessel sizes. Although this trend ...
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- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- PTC India Limited - India
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Aditya Birla Group - India
- London Commodity Brokers - England
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Australian Coal Association
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
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