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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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Friday, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
Tuesday, 07 February 12
DRY BULK MARKET FINALLY STOPS DECLINE, POSTS FIRST RISE IN MORE THAN A MONTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After falling to near record lows, not seen since the mid-80s the dry bulk market has finally stopped its path to "hell", with the industr ...
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- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
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- Banpu Public Company Limited - Thailand
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- Africa Commodities Group - South Africa
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- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Australian Coal Association
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
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- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- VISA Power Limited - India
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- SMC Global Power, Philippines
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