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Asia’s large tidal energy potential remains untapped despite high investor interest Korea
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hen Korea pondered on how it could diversify its energy supply, it built a tidal power plant that could not only produce electrical energy but also improve water quality for nearby regions. The Sihwa tidal power plant — completed in 2010 and the largest of its kind globally — has since become a model project that highlights the potential of tidal energy in Asia. Tidal energy development, which includes tidal barrage and tidal current turbines, offers a huge potential for sustainable, clean, and reliable energy in other Asian countries like China, the Philippines, Indonesia, India, and Japan. “These renewable energy sources provide unique advantages compared to well-known conventional solutions, such as wind and solar power,” says Evgenia Kontoleontos, research engineer atAndritz Hydro GmbH, Austria. “In particular, the greatest advantage is the predictability of energy production and the reduction of grid instability granting a more reliable production planning for the operators.” Andritz Hydro was a subcontractor to Daewoo Engineering & Construction Co., Ltd., which was the leader of the Korean joint venture and acted as the main contractor for the installation of the Sihwa Tidal power plant. Kontoleontos reckons technological advancements have enabled tidal current turbines
to be designed in a way that can minimise their environmental impact, while eliminating any visual or audible impact above the surface. Tidal barrages, which harness the hydraulic energy from the head difference between high and low tides, are being optimised to produce more energy in a more efficient manner. At the Swansea Bay tidal power plant in the United Kingdom, for example, Andritz Hydro developed a special annual energy production optimisation software that maximises the use of available tidal energy and optimises power plant operation throughout the year. Tidal energy potential Several Asian countries are starting to step on the pedal in tidal energy development, emboldened by successful projects internationally and stronger support for renewable energy. “The industry is in very strong financial shape,” says Tim Cornelius, CEO at Atlantis Resources, a tidal energy company. “Renewable energy development is booming globally, and tidal power is where wind and solar was 15 years ago.” Cornelius says all the best sites in the world are yet to be built out, and expects billions of pounds of investment to pour into the United Kingdom’s tidal energy sector, which could then catalyse investment in large-scale projects across Asia. The Chinese market has a large untapped potential
The problem with EPC contracts in Japan
If you are a non-Japanese company attempting to enter the Japanese onshore wind market, be ready to face a bevy of challenges relating to engineering, procurement, and construction (EPC) contracts. For one, international EPC contractors are unlikely to be successful operating in Japan unless they have established strong partnership relationships with local Japanese firms, says Korawin Sriniratsai, renewable energy consultant at Mott MacDonald. This means international developers might have to procure an EPC contractor in Japan, and doing so will likely force them to adopt different business practices compared to standard international procurement practice and factor in a longer procurement time frame. Realistic EPC costs Early stages of EPC contract procurement will usually require developers to hold face-to-face meetings to establish relationships, and allow reasonable time to address questions in a cooperative manner, as is customary in Japanese culture. “For an international developer without established local contractor relationships, this is, again, likely to increase competitive procurement time frames compared to a comparable situation for projects internationally,” says Sriniratsai. To better cope with unique EPC contract procedures in Japan, international developers are advised to also budget realistic EPC costs. Costs in Japanese terms can be significantly higher than the European and international cost benchmarks due to factors like higher labour cost and increased man-hours to ensure high construction quality. 10 ASIAN POWER
Marubeni’s EPC contract records
Source: Marubeni
Korawin Sriniratsai
Large potential is still untapped
with 14GW of tidal power resource identified so far, whilst South Korea has plans for tidal stream projects in Incheon, Shina, Jeaonranamdo, and Daebang. He reckons the biggest advances in this sector can be seen in Indonesia. Atlantis recently announced a 150 megawatt (MW) project with partners SBS in Indonesia. The tidal energy company also embarked on a 250MW project with GPCL in the Gulf of Kutch in India, both of which should help provide significant power in the growing Asian nations. To put this scale in perspective, Atlantis’ flagship project in Scotland — MeyGen — is the world’s largest tidal stream project at 398MW that is expected to power 175,000 homes.