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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, 19 January 12
14TH VOGP MEETING IN HO CHI MINH CITY HANDS OUT LATEST UPDATES AND DEVELOPMENTS IN VIETNAM'S ENERGY INDUSTRY
Press Release: At upcoming 14th Vietnam Oil Gas Power on 27-28 Feb in Ho Chi Minh City the industry’s most influential names including Petrovi ...
Thursday, 19 January 12
DELTA DUNIA SEALS US$820 MIO CONTRACT INSIDER STORIES
Insider Stories reported that, PT Delta Dunia Makmur Tbk (DOID) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ( ...
Wednesday, 18 January 12
WARM WINTER ACROSS EUROPE HAS IMPACTED NEGATIVELY COAL DEMAND - BRS
With the Chinese New Year just a week away, all markets are slowing down. The drop in freight rates for all sizes has been significant over the past ...
Wednesday, 18 January 12
DRY BULK MARKET'S DRAMA CONTINUES IN START OF NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of newbuilding deliveries, coupled with a slow start to the new year, a typical trend for the dry bulk market, has led the industry's benc ...
Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
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- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
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