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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, 02 April 12
BANGLADESH EYEING INDONESIA FOR COAL
COALspot.com - The high level executives of Center for Environmental and Geographic Information Services (CEGIS) of Bangladesh is visiting Ind ...
Monday, 02 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first quarter of the New Year ended with the BDI standing 42% above from the 26 years’ bottom low of 662 points on February 1st, and a pos ...
Saturday, 31 March 12
THE BDI CONTINUED TO MOVE UPWARD - VISTAAR
COALspot.com - The BDI continued to move upward and rose by 2.86 pct closing at 934 points.
The cape index was up by 3.14 pct closing at 1,412 po ...
Saturday, 31 March 12
SRI LANKA IMPORTS 152,555 MT OF INDONESIAN COAL IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, shipped 27.126* million tons of coal in February 2012, compared to 28.21* million to ...
Friday, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
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- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Central Electricity Authority - India
- MS Steel International - UAE
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- The University of Queensland
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Energy Development Corp, Philippines
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