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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, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
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- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Eastern Coal Council - USA
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
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