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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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Thursday, 05 April 12
COAL EXPORT TAX: MATTER OF CONCERN FOR INDIA - SUNIL K KUMBHAT
COALspot.com - Since the issuance of Indonesian Mining law in 2009, miners have increased their activities in exploring , ex ...
Thursday, 05 April 12
AKR COAL FIRST EXPORT SHIPMENT OF COAL SEABORNE
PT Anugrah Karya Raya (AKR Coal) subsidiary of PT AKR Corporindo Tbk., Indonesia’s leading integrated supply chain solutions provider and larg ...
Thursday, 05 April 12
DRY BULK MARKET STALLS AS TREND IS REVERSED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has halted its month-long rally, with the BDI (Baltic Dry Index) retreating yesterday for a second consecutive session. Industry ...
Wednesday, 04 April 12
OIL MAY JUMP TO $150PB IF IRAN ATTACKED: EXPERT - KUNA / HELLENIC SHIPPING
Prices of oil will not drop below level of $100 per barrel and may jump to $150 pb in the coming two months, according to the prominent Kuwaiti expe ...
Wednesday, 04 April 12
CHURCHILL MINING TO ACCELERATE INTERNATIONAL ARBITRATION AGAINST INDONESIA
Churchill Mining plc (AIM: CHL), advises that notations on the Indonesian Supreme Court's register of cases shows the Supreme Court has rejected th ...
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- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
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