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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, 08 March 12
INDONESIA'S COAL SECTOR CAN BENEFIT FROM CLEARER REGULATIONS - FITCH RATINGS
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable ...
Thursday, 08 March 12
DRY BULK MARKET ON THE RISE; CHINAS COAL IMPORTS COULD INCREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on rising back to healthier levels yesterday, with the BDI (Baltic Dry Index) the industry’s benchmark, marking its 8 ...
Wednesday, 07 March 12
INDONESIA COAL BENCHMARK PRICE GAINS FOR SECOND MONTH
COALspot.com - Indonesia raised the monthly coal reference price for sales in March by 1.15 percent, the second increase since February.
The Mini ...
Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION
COALspot.com - Foreign holders of mining licenses in Indonesia have to divert 51% of their stakes to Indonesian government or domestic entitie ...
Wednesday, 07 March 12
ASSESS ASIAS POTENTIAL, DEVELOPMENTS AND APPETITE FOR SHALE AT SHALE GAS SUMMIT
Press Release - Assess Asia’s Potential, Developments and Appetite for Shale at Shale Gas Summit on 23-24 Apr, 2012 in Beijing
China is rep ...
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- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- PTC India Limited - India
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Planning Commission, India
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Australian Coal Association
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
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