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ISSUE 84 | DISPLAY TO 31 DECEMBER 2017 | www.asian-power.com | A Charlton Media Group publication

PLEASE, MIND THE GAS: THAILAND’S DECLINING GAS RESERVES VIETNAM GOES GUNG-HO ON SOLAR DEVELOPMENT

US$360P.A.

MEET THE ENERGY “PROSUMERS” WHY ARE RENEWABLE DEVELOPERS SCRAMBLING FOR IPOs?

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CEO OF THE YEAR YTL POWER INTERNATIONAL BERHAD CEO TAN SRI FRANCIS YEOH SHARES UPDATES ON THE FIRM’S TWO BIG PROJECTS WORTH US$5B


100 years of control technology innovation

#1 ranked DCS in the power generation sector ABB Ability™ Symphony® Plus

— Creating value from digital takes ability. ABB Ability™. ABB has planted its roots to the future.

Access to dependable power is one of the defining attributes of modern society. In today’s digital age, we have the technology to manage the vast amounts of data being produced by power plants - offering insights that lead to valuable customer actions. By making plants more intelligent, and blurring the lines between the physical and digital worlds, ABB is helping generate more reliable power. Creating value from digital insight takes ability. ABB Ability. #RootsToTheFuture, abb.com/power-generation, abb.com/symphonyplus


FROM THE EDITOR The Asian Power Awards just had its 13th year of recognising the best players of the industry. Over a hundred key executives from outstanding companies flocked to “The Oscars” of the power industry and witnessed the awarding ceremony. Flip through this issue’s pages and catch a glimpse of what transpired in Conrad Bangkok during the awards night.

Publisher & EDITOR-IN-CHIEF Tim Charlton production editor Karen Lou Mesina Graphic Artist Elizabeth Indoy

ADVERTISING CONTACT Rochelle Romero rochelle@charltonmediamail.com Brayan Acupan brayan@charltonmediamail.com

ADMINISTRATION Accounts Department accounts@charltonmediamail.com Advertising advertising@charltonmediamail.com Editorial ap@charltonmedia.com

We also sought YTL Power International Berhad’s CEO Tan Sri Dr Francis Yeoh, who was awarded the CEO of the Year 2017, for this issue’s cover feature as he shares updates on two of the company’s biggest projects collectively worth US$5b. Once completed the projects will significantly boost the group’s net effective MW capacity by 1,268 MW. Australia and Vietnam are also in the limelight at this issue’s country reports. Our team sought industry experts’ insights on Australia’s dilemma on meeting environmental commitments and lowering costly power prices, and Vietnam’s aggressive policies on solar projects. Start flipping the pages, and enjoy!

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*If you’re reading the small print you may be missing the big picture    

ASIAN POWER 1


CONTENTs

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CEO INterview YTL Power International Berhad’s Tan Sri Francis Yeoh is 2017’s CEO of the Year

FIRST 16 Meet the energy “prosumers”

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event coverage Find out who emerged as the victors in the Asian Power Awards 2017

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EVENT COVERAGE Asia’s power utilities play catch up on digitalisation

COUNTRY REPORT 30 Vietnam goes gung-ho on solar development

17 Please, mind the gas 18 Scrambling for IPOs in India 20 Southeast Asia’s dim solar potential

SECTOR REPORT 24 Why Southeast Asian countries are left behind in crackdown on coal

COUNTRY REPORT 28 Australia caught in the web of renewable energy

VENDOR VIEW 38 These are the power utility trends to watch out for in 2018

OPINION 40 The place for renewable subsidies in the Philippines 40 Pros and cons of IoT in the power sector 42 Game changers in the power industry 42 3 reasons why PV rooftops should not worry utilities

and coal amidst rising power prices

Published Bi-monthly on the Second week of the Month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533

For the latest news on Asian power and energy, visit the website

www.asian-power.com


Co-published corporate profile

Future power plant

ABB leverages solutions approach to build the plant of the future When big data meets energy, utility companies can fuel topnotch innovations to meet today’s most pressing power generation challenges.

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igitalisation has now become the name of the game, as the world’s growing energy industry faces dwindling power resources and a huge lack of human capacities with rich and deep experience in the field. Not only does digitalisation fill these major gaps, it also presents itself as a means to create economic value estimated to soon reach billions of dollars for the power generation industry alone. From problems in energy pricing to the regulation of carbon emissions to distributed energy, utility companies can count on digitalisation to provide a wide-reaching solution across the value chain. In fact, digitalisation has resulted in new business models and more efficient data management systems that yield benefits and cut costs and downtime not only for clients, but for producers as well. For ABB, digitalisation has enabled them to better understand their clientele, and unlock value from years of data collected and analysed. In fact, ABB prides itself as one of the first industrial companies to fully embrace the digital journey up until the growth of the Internet of Things (IoT). Decades of digitalisation experience Now, ABB brings its two-decade experience in digitalisation to move the company closer to Industry 4.0 and building the plant of the future. ABB leverages its advantage to bear on current plant operations, beginning with power generation units through advanced combustion control and advanced combustion optimisation. Kevin Kosisko, managing director, business unit power generation and water, said that ABB has been deploying these solutions for the past ten years with a move up the chain to provide a collaborative operations solution where their clients can leverage ABB’s deep industry knowledge acquired over five decades of implementing power generation automation

systems. “Our customers are experiencing depletion in the rich knowledge that they have in operating their facilities. Some industries Kevin Kosisko may be more attractive for these kinds of resources overtime, and we’ve gone on a bit we’re deploying at ABB right now. Collaborative of transformation in our industry which has operations is really an opportunity to leverage caused us to lose a lot of talents. If we look at not only our customer’s skills, but ABB’s skills in collaborative operations, we help solve their a collaborative manner to really provide valueproblem by really helping our customer to utilise added solutions real-time to customer’s issues the resources that they have, marrying those as they come up,” Kosisko said. These solutions together with ABB resources to really drive a are part of a larger vision that ABB has been real-time operating solution that we can provide working on and that is focused on innovations for them to solve those problems,” Kosisko such as virtual power plants and integrated added. multiple distributed energy resources. ABB Furthermore, ABB aims to solve not only maintains its collaborative ongoing problems in operating principle as it moves plants, but to speed up “we help solve towards better interaction operations such as plant their problem by of customers with the commissioning and bringing really helping our grid management in their a plant to peak load. ABB customer to utilise the respective countries, has come up with a means to deviate from the normal resources that they optimising resources and platform approach. The have, marrying those squeezing greater value from their assets. “In our firm presents its solutions together with ABB collaborative operations approach which boasts of an resources to really solution, there are a couple open platform technology that drive a real-time of options. One, it could can connect easily to censors operating solution be a real-time connection, and various automation systems in a vertical fashion. that we can provide connected into a secure data facility that we As ABB pushes for enhanced for them to solve have where we have our communication lines and those problems.” resources sitting, isolated better use of data, clients from the rest of our resources. Security of can expect services that will meet them at their customer data is number one and we make sure point of need, especially with many of their that our platform is secure. But in bringing that customers still in the phase of implementing data into this location or having the customer advanced optimisation solutions. “There’s a lot gather the data at their location, we offer of value to be had there, around conventional solutions there, where we can either connect in generation, improving the actual combustion an intermittent fashion to help them with the cycling conventional generation, reducing the data or come down and work with them on-site overall fuel cost, improving availability of those that they have collected,” Kosisko added. assets, reducing emissions, those solutions ASIAN POWER 3


News from asian-power.com Daily news from Asia most read

PROJECT

BlackGold seals deal with China Huadian, PLN for Riau coal project BlackGold Natural Resources announced that it sealed an agreement with various parties to form a new consortium for the development, construction, operation and maintenance of a 2 x 300 MW coal-fired power plant in Riau province, Sumatra, Indonesia. The consortium shall consist of BlackGold, China Huadian Engineering Co., Ltd, PT Samantaka Batubara (PT SB), a subsidiary of the Company, PTPembangkitan JawaBali (PJB), and PT PLN Batubara (PLN BB). PJB and PLN BB are both whollyowned subsidiaries of PT Perusahaan.

PROJECT

India’s first utility scale storage project finally takes off Coal mining firm NLC India won the auction with $46m bid. NLC India Limited, a coal mining company owned by the government, recently completed auction for a 20MW solar project integrated with 28 MWh storage capacity in Andaman & Nicobar Islands. According to Bridge to India, this is the first utility scale storage tender in India to announce results. Mahindra Susten won the auction with a final all-in price of INR 2.99b (US$46m). Replacement of diesel fired power is the most obvious application for solar cum storage plants both commercially and environmentally.

REGULATION

What you should know about Vietnam’s Circular 16 On the 12th of September 2017, the Ministry of Industry and Trade in Vietnam officially released Circular No.16 with the aim to provide guidelines for Decision 11. According to SolarPlaza, the purpose of Circular 16 is to offer regulations on formulation, approval and amendment of Vietnam’s provincial and national power development plans. Furthermore, Circular 16 also provides the solar Power Purchase Agreement (PPA) as an obligatory template for future on-grid and rooftop solar power projects. The PPA is expected to remain as specified under the new government circular.


Co-published corporate profile

What you need to know about Shin Boryeong TPP, Korea’s first 1,000MW-Class USC Coal-Fired Plant

The company is taking the lead in the creation of jobs for local residents, including a total of about 100 regular employees, and a maximum of 570 daily workers on a daily basis.

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n June 29, KOMIPO held a ceremony to commemorate commercial operation of Shin Boryeong TPP #1, the first 1,000MW-class localised power plant, at its Shin Boryeong Construction Site Division with executives and employees of KOMIPO. As a high-efficiency USC power plant, Shin Boryeong TPP is equipped with world-class technologies enabling steam pressure of 265kg/cm2 and steam temperature of over 610°C. As its energy efficiency is about 4% higher than existing domestic standard coal-fired power plants, Shin Boryeong TPP is expected to reduce GHG emissions by about 600,000 tons and save about W30 billion in fuel costs annually.

Starting commercial operation KOMIPO opened the era of commercialising 1,000MW-class large-capacity eco-friendly power plants with genuine domestic technologies. Regarding substances causing fine dust, which has become a hot issue recently, KOMIPO also intends to invest W24 billion at the time of scheduled preventive maintenance in the initial year to improve environmental facility functions further. Through the measures, the company expects to operate the power plant at 20% of the legally permissible emission standards. Shin Boryeong 1 & 2, which is twice the capacity of existing domestic standard power generation facilities (1 million kW level), will be a successful example of localised technology for the first time in Korea. In the coal-fired power market, which accounts for around 80 trillion won of global demand, it is expected to expand the scale of overseas business by tapping the demand for new construction and replacement of old power plants in developing countries. The need for the development of next-generation thermal power generation facilities that can comply with the policy of exporting the thermal power generation equipment following the export of the nuclear power plant (UAE). Therefore, the USC thermal power generation technology of 1 million kW, which is the domestic technology’s next generation power plant developed by the government from 2002 to 2008, is being applied to Shin Boryeong 1 & 2 units. New Boryeong Thermal Power Plant is an ultra-supercritical power plant called Ultra Super Critical (USC), which has the world’s best technology with higher steam pressure (274kg/ cm2) and steam temperature (over 624 °C). Shin-Boryeong Thermal Power Plant is a large-scale project with 2,790.7 billion won invested. The total workforce during the construction period is 2,152,000. 283 6 ASIAN POWER

participating companies contribute to the national and regional economy. It contributes to the creation of future food for Korea, which provides a bridgehead for the advancement of the global thermal power generation market, such as the production of about 900 billion won due to manufacturing of parts and materials for about 1,400 SMEs. Activation of local economy In the area of revitalisation of the local economy, the amount of contracts and purchases in the Boryeong area as of April 2017 totaled 177.1 billion won, steadily expanding opportunities for participation by domestic companies. In particular, the contractor is giving preference to the area when contracting with the company, and encourages the use of Boryeong area companies when using equipment and manpower. The company is taking the lead in the creation of jobs for local residents, including a total of about 100 regular employees, and a maximum of 570 daily workers on a daily basis. As of April of this year, 32.82% of total subcontracting amount of 539.8 billion won was invested in Boryeong area, contributing greatly to the activation of local economy. The increase in population of the largest number of 3,000 field workers and 1,500 residents during the construction period also contributes to an increase in consumption of 13.3 billion won annually. In addition, the social responsibility of the public corporation is also contributing to the revitalisation of the local economy through the support benefits provided by the tax revenue of 56 billion won for the construction of the power plant and 35 billion won for the basic subsidy for 35

years. About 160 including heads of SME’s associations and representatives of SMEs are cheering together at the 2017 KOMIPO joint growth forum. Currently, the Shin Boryeong Thermal Power Plant construction site is undergoing complex construction and commissioning of various processes such as construction work, electric work, etc., as high-risk work such as high-altitude work, heavy equipment work and heavy work are performed simultaneously, and exceptional attention is needed. Therefore, Shin Boryeong Construction Headquarters operates a variety of safety activities such as safety broadcast, daily safety patrol, and special safety inspection at the time of commuting. Every Monday, under joint supervision of headquarters, we are making every effort to manage safety on the spot by disclosing the safety incidents that occur in the field and the safety points of workers to each construction company and taking countermeasures. From the year of 2014 to 2017, a total of six times, with the signing of the Integrity Business Agreement with 256 construction partners, is promoting integrity activities to realize a transparent construction site. The Integrity Business Agreement contains the principle that the construction site should be built in compliance with its own code of conduct, and that it should cooperate with the construction company in order to ensure a sound construction environment by creating a sound organisational climate by performing fair duties and prohibiting unfair benefits. We have been able to prevent the various irregularities that may arise in the company and establish the honorable company of integrity.

“Demand for coal is outstripping supply and this is expected to get worse over the foreseeable future.”

Shin Boryeong 1 & 2 will be a successful example of localised technology for the first time in Korea.


ASIAN POWER 7


Co-published corporate profile

Powering the future of Jordan with oil shale The $1.2b project is expected to meet roughly 15% of Jordan’s annual electricity demand.

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ttarat Power Company (APCO) is constructing the first oil shale mine mouth power plant (the Project) in the Hashimite Kingdom of Jordan. Located at Attarat um Ghudran, c. 110km south-east of Amman, the Project will be the first to commercially utilise Jordan’s abundant oil shale reserves1 and will significantly reduce Jordan’s reliance on imported oil and gas. The power plant will have a capacity of 554 MW (gross) / 470 MW (net) with a design life of 40 years, utilising circulating fluidised bed boilers (CFB) technology. Fuel for the power plant will be supplied from an opencast mine with proven oil shale resource located within the site. SRK Exploration Services Ltd., a leading U.K. based independent mining consultancy has verified and confirmed that the oil shale reserves for the Project is sufficient for the lifetime of the Project in accordance with the JORC code. The Project complies with stringent Environmental Impact Assessment (EIA) guidelines in accordance with World Bank and Jordanian regulations. Largest private sector project At an investment value of USD2.1 billion, the Project is the largest private sector project in Jordan to-date and is expected to meet c. 15% of Jordan’s annual electricity demand. APCO has entered into a 30-year Power Purchase Agreement with the Jordanian national utility and single buyer, National Electric Power Corporation (NEPCO) for the sale of the entire electric capacity and net electrical output following the construction of the power plant. The Project is the first oil shale fired mine mouth power plant in the world funded by limited recourse project financing. The USD1.6 billion project financing benefits from export credit insurance provided by China Export & Credit Insurance Corporation (Sinosure). The debt facility is lead arranged by Industrial and Commercial Bank of China, Bank of China, China Construction Bank and Export-Import Bank of China. This is the largest Chinese project financing for a private infrastructure project outside China supported by Sinosure to-date. APCO has also entered into a fixed costs fixed term Engineering, Procurement & Construction (EPC) Contract with Guangdong Power Engineering Corporation, a subsidiary of China Energy Engineering Group Co. Ltd. Foster Wheeler will be responsible for the design and supply of the circulating fluidised bed boilers whist Siemens will supply the steam turbine generators and the overall plant design will be undertaken by Worley Parson. Affiliates of the shareholders will be responsible for the operations and maintenance of the power station as well as the oil shale mining operation. The Project achieved financial close on 16 March 2017 and Notice to 8 ASIAN POWER

16 March 2017 - Signing of Note on Financial Close in the Prime Ministry between APCO and NEPCO in Amman witinessed by H.E. Mr Hani Mulki, Prime Minister of Jordan

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YTL Power International Berhad team at the Asian Power Awards 2017 in Bangkok

“The project is the first oil shale fired mine mouth power plant in the world funded by limited recourse financing.” Proceed has been issued to the EPC Contractor with commercial operations scheduled for mid2020. The signing of Note on Financial Close in the Prime Ministry office in Jordan between APCO and NEPCO in Amman was witnessed by His Excellency Mr Hani Mulki, Prime Minister of The Hashemite Kingdom of Jordan. Significance of the APCO Project to Jordan It is the largest inward private sector investment into Jordan at c. USD2.1 billion. It is the first solid fuel (oil shale) mine mouth power plant in Jordan. Oil shale is the only local indigenous fuel which Jordan has in abundant supply and the Project will: Reduce Jordan’s dependency on imported oil & gas resource; Reduce Jordan’s fuel import bill and outflow of foreign exchange; Contribute to Jordan’s longterm energy security and independence, and; Kick start Jordan’s nascent oil shale industry. It offers a competitive tariff with minimum linkage to oil price. It also creates c. 5,500 job opportunities during construction and c. 1,000

permanent jobs during operations for at least 30 years. Background of Sponsors YTL Power International Berhad (YTLPI) is listed on Bursa Malaysia. YTLPI owns and operates some 5,500MW of gas, oil and coalfired power generation plants in Malaysia, Singapore and Indonesia and is an active trader of oil products in the Singapore market where it has approximately 850,000m3 of storage capacity. Yudean Group is a Chinese stateowned utility which owns and operates over 27,000 MW of power generation capacity with ca. 13,000 employees. Yudean is owned by Guangdong Province (76%) and China Huaneng Group (24%). Enefit is the world´s largest oil shale energy company. Its sole shareholder is the Republic of Estonia. Enefit owns and operates some 2,000MW of direct oil shale fired mine-mouth power generation capacity and supplies electricity to some 450,000 customers.


Coal Power Project of the Year (Silver Award) 2 0 1 7

Innovative Power Technology of the Year

Powering the Future of Jordan with Oil Shale

Contact Information: Jason Pok Hooi Loong, Chief Executive Officer Attarat Power Company PSC 342 Wasfi Al Tal Street, 2nd Floor Khalda, Amman 11822 The Hashemite Kingdom of Jordan ASIAN POWER 9 Telephone : + 962 - 6556 – 3056 Fax : + 962 - 6556 - 0022


Co-published corporate profile

Sri Lankan power giant LTL Holdings reached the pinnacle again

Subsidiary of LTL Holdings, Lakdhanavi Limited was awarded with Power Utility of the Year & Innovative Power Technology of the Year Sri Lanka at the Asian Power Awards 2017.

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ommencing with an investment of LKR 8.5 million to manufacture Transformers, in the beginning, LTL Holdings has become the premier engineering company in Sri Lanka and now has extended its operations overseas, relishing wide international recognition in its achievements. Being the leading Engineering Company of the Power Sector in Sri Lanka, LTL Holdings has diversified into power generation, electricity infrastructure development, hot dip galvanizing whilst modernising and improving the transformer manufacturing activity, thus covering the entire value chain of the power sector. Transformer manufacturing facility has a very strong commitment to excellence which is showcased in their superior product range. Catering to over 20 countries globally, it is this attention to detail and quality that has allowed the company to become a major player in the international engineering arena. Over 50% of the products are exported, after meeting the entire domestic requirements. Dynamic engineering Lakdhanavi Limited is a subsidiary of LTL Holdings which is the power generating arm of the company, a dynamic engineering enterprise engaged in manufacturing, construction & service industries spanning across electrical, mechanical and civil engineering fields in Sri Lanka and Overseas. Lakdhanavi is renowned as Engineering, Procurement & Construction [EPC] contractor and O & M contractor for major Power projects, including combined cycle power plants, diesel engines based power plants, mini hydro power plants and wind power plants. Such is the steady growth of the company that LTL has also pioneered Independent Power Production (IPP) in Sri Lanka. Lakdhanavi Limited, is the first independent power producer in Sri Lanka to build a 24MW diesel engine power plant, which operated on HFO at Sapugaskanda, Sri Lanka since 1997. Lakdhanavi Limited has also successfully completed the EPC contract of 100MW Heladhanavi power plant at Puttalam, Sri Lanka in 2004 and was the Operation & Maintenances contractor for this plant. Lakdhanavi Limited also has, sometime back, built and operated a number of emergency power plants to help meet the power shortages in the national system. This was done at the request of the State Power Utility. As a power plant operation & maintenance contractor, Lakdhanavi limited is accredited with ISO 9001: 2008 (Quality), ISO 14001: 2004 (Environmental management) , and 10 ASIAN POWER

OHAS 18001: 2007 (Occupational health & safety) standards. The trademark project, the Lakdhanavi undertook in 2007, was to build and operate a multi fuel capable Yugadanavi 300MW Combined Cycle Power Plant which was the largest power plant project in Sri Lanka at that time. Phase one of the plant was commissioned in November 2008 with 200MW in open cycle mode in a record 10 months’ time and the 100MW second phase of the combined cycle plant was commissioned in February 2010. Legacy of successful operation Gas turbines of this Yugadhanavi plant are operated on heavy fuel oil and turbines have completed 65,000 fired hours already. The power plant is continuing its 8th year of commercial operation being one of the crucial power plants to the Sri Lankan grid by playing an anchor role in reliability. Every year it saves tremendous amount of money for the country by operating with cheap HFO instead of diesel. Past few years Yugadanavi Power Plant was honoured by locally and internationally. In 2016 Yugadanavi Power Plant was awarded the Best Utility of the Country for the year by Asian Power Awards and also the silver award for National Occupational Health and Safety Excellence by competing with many sectors within Sri Lanka. In 2017, again it was awarded with the British Safety Council Merit Winner Award for Occupational Health and Safety Management. With the complexity of HFO operation, Yugadanavi has closely worked with OEM,

General Electric (GE) by sharing information regarding the HFO operation to improve the fuel flexibility, efficiency and reliability as well as reduction of emissions. In this regard several R & D projects were carried out and results were presented in several forums, in ASME Turbo Expo and Power Gen Asia etc., etc. Sri Lanka’s largest IPP Lakdhanavi constructed its first power station in 1997 and over the last two decades has grown to be the premier EPC contractor & the largest independent power producer within the power sector of Sri Lanka with an impressive array of achievements. This includes receiving the prestigious Gold Award for the Best Independent Power Producer (IPP) at the Asian Power Awards 2008, and also being adjudicated as the Best Engineering Organization in the Infrastructure Development Sector of Sri-Lanka, at the 2008 engineering excellence awards ceremony organized by the Institute of Engineers Sri Lanka. LTL is committed to serve its clients to reap the best from its engineering innovations and believes in empowering the local engineering talent to achieve this objective and in the process to develop its own engineering culture and expand its operations globally to provide customized solutions that deliver excellent results to clients in any part of the world. Being the Sri Lanka’s premier power engineering company, LTL Holdings, together with its group of companies will continue to grow, commanding a dominant position at the forefront of global engineering arena.

“The trademark project Undertaken by Lakdhanavi, YUGADHANAVI 300MW combined cycle power plant.”

Yugadanavi 300 MW Combined Cycle Power Plant


Leading Developer, Owner and Operator Power (Including Renewable Energy) and Desalinated Water

22+ GW of Power 2.5 Million m3/day of Desalinated Water 15% of Portfolio in Renewables

Reliably delivering power and desalinated water at the lowest possible cost KSA • UAE • China • Egypt • Jordan • Morocco • Oman • South Africa • Spain • Oman • Turkey • Vietnam

www.acwapower.com


RefReshing Life with gReen eneRgy China Resources Power Holdings Co.,Ltd. (CR Power) was founded in August 2001. The Company is among the most efficient and profitable integrated energy companies in China. It also acts as a flagship company listed in Hong Kong for China Resources Holdings Co.,Ltd.(CRC),which is a Fortune 500 company. Its business primarily covers thermal power, wind power, hydropower, photovoltaic power generation and distributed energy.

CR Power was listed on the Main Board of the Hong Kong Stock Exchange on November 12,2003 (stock code: 0836.HK). In March 2004, CR Power was added to the Hang Seng Composite Industry Index (Utilities) and the Hang Seng China-Affiliated Corporations Index. In May 2005, CR Power was included into the Morgan Stanley Capital International (MSCI) China Index. On June 8, 2009, the Company formally became one of the constituent stocks of the Hang Seng Index (Blue-chip stock).

As at 30 June 2017, CR Power’s total assets amounted to HK$210.5 billion and its attributable operational generation capacity amounted to approximately 37GW. It covers 27 provinces, municipalities and autonomous regions. For the ninth consecutive year, CR Power was named in the Platt’s Top 250 Global Energy Companies and listed in Forbes Global 2,000, ranking 75th and 646th respectively. Since its establishment, CR Power has been a strategy-driven enterprise, and saw a fast and solid development in the past decade due to its clear strategy and efficient execution. In the next five years, CR Power is going to focus on green energy development, greatly enhance the mix of clean energy, develop highquality thermal power, optimize coal assets, and actively tap into the electricity retail business. CR Power is also searching for opportunities in overseas energy markets and cultivating new profit growth opportunities by extending its value chain. CR Power looks forward to working with stakeholders hand-in-hand and implementing the responsibility, as well as pursuing of “Refreshing Life with Green Energy”, so as to establish CR Power as an excellent and sustainable international energy company.

Website: www.cr-power.com


CO-PUBLISHED CORPORATE PROFILE

Sumitomo breaks ground in circulating fluidized bed market with launch of Sumitomo SHI FW

Sumitomo’s SHI buys Amec Foster Wheeler’s CFB technology to create a new force in fuel flexible CFB technology.

The Samcheok Green Power Plant in South Korea features 2,200MWe of our advanced ultra supercritical CFB technology.

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SHI’s acquisition of Amec Foster Wheeler’s hen coal mines began to mature and fluidized bed business, is a strategic move for power plant owners started to move growing CFB technology in the large utility to lower quality coal seams, Sumitomo power sector. Eiji Kojima, chairman of SFW Heavy Industries (SHI) saw a huge opportunity said that while their business has boomed in to hasten the growth of the low quality solid Japan, the acquisition allowed them to tap into fuel market. SHI leveraged on the increasing the wider global market where there are more value of fuel flexibility to innovate the use opportunities that need their unparalleled of circulating fluidized bed (CFB) plants and experience. provide plant designs catering to all kinds of Harju-Jeanty said that the new team is a wider generation needs. To further boost their power and stronger organisation with a higher ability in the CFB market, SHI acquired Amec Foster to come up with new technologies, new designs, Wheeler’s (AFW) fluidized bed technology to and new power solutions to meet the needs form Sumitomo SHI FW (SFW) a new global of their growing client leader in providing reliable “The new team is a base. Harju-Jeanty added and sustainable energy wider and stronger that with the combined solutions. expertise of the two Tomas Harju-Jeanty, chief organisation with a executive officer of SFW, higher ability to come up companies, what they have is the world’s leading said that the world’s boiler with new technologies, now and most experienced CFB market remains dominated new designs, and new organisation with the most by conventional pulverized power solutions to up-to-date and innovative coal (PC) technology, especially for large coal meet the needs of their technology possible. utility projects. With the growing client base. “ The benefits of CFB growth of large utility coal Robert Giglio, senior vice-president at SFW, CFBs in the past ten years, utilities, IPPs, and said that fuel flexibility, where buyers and developers are turning to CFB boiler technology sellers are willing to trade quality for price, to make their new power plants more reliable, enabled more large-scale CFB plants to go cost competitive and sustainable. In fact, SFW online for the past ten years. CFB plants, unlike was the first company providing large super PC plant designs, allow plant owners to explore critical CFBs from 460 to 550 MW of generation the growing fuels market and take advantage capacity.

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of price discounts for lower rank coals, even for ultra-supercritical plant designs. At present, there is a growing supply of discounted coals, domestic lignites, and waste coals, providing an economic advantage for fuel-flexible plants capable of burning lower rank, less expensive fuels. “The cost of fuel is the largest operating cost line item on the balance sheet for any power plant so the economic advantage often goes to the plant that can operate reliably with lower rank, and therefore lower cost, fuels. The magnitude of the fuel cost savings for a 600 MWe coal plant can be demonstrated by using $70/tonne (5,500 kcal/kg) coal as a base. Reducing the cost of fuel by $10/tonne will add $7 million to the plant’s bottom lineevery year, which is worth $102 million in today’s money over the life of the plant, ” Giglio added. The global coal market is currently dominated by Indonesian coal, with about 50% of its exports being high-moisture, sub-bituminous coals with gross-as-received higher heating value (HHV) ranging between 3,900-4,200 kcal/ kg. This is in contrast to the traditional 6,000 kcal/kg which has been the norm for the past 50 years. In fact, Giglio added that the best quality Indonesian coal reserves are expected to produce coals with average HHVs not greater than 5,200 kcal/kg (with economical washing levels) in the future.


CO-PUBLISHED CORPORATE PROFILE

Mixed Wood & Agro

Mixed Wood & Agro

Mixed Wood & Peat

Mixed Wood & Peat

Demolition Wood

Demolition Wood

CleanWood

Clean Wood

Petcoke

Mixed Wood & Agro

Mixed Wood & Peat

Demolition Wood

CleanWood

Mixed Wood & Agro

Mixed Wood & Peat

Demolition Wood

Clean Wood

Petcoke

Petcoke

Petcoke

goes beyond just being able to burn various SO3, HCl, and HF, thus preventing corrosion coals or coal and biomass mixes. He said that and fouling. According to Giglio, most projects, Average Annual Plant Availability fuel flexibility also means that plant reliability, adding limestone to the CFB can achieve the Average Annual Plant Availability* (% (% of 8760 hours) (% of 8760 hours) Average Annual Plant Availability* of 8760 hours) maintenance, ease of operation, and stack required SO2 stack emission without the 93.3% 92.9% 91.5% 91.6% 93.3% 92.9% SFW - CFB emissions must be largely unaffected by need for a downstream FGD. “Finally, unlike 90.8% 91.5% 91.6% 92% 90.0% 90.8% 91% NERC - All Boilers 92% changing fuel quality and fuel mixes. The PC boilers, the fuel doesn’t have to be finely 89.1% 90.8% 90.0% 88.7% 88.6% 88.4% 90% 91% VGB - All Boilers longest operating supercritical CFB power plant ground, or dispersed into the furnace by 88.7% 89.1%dried 89% 88.6% 88.4% 87.0% 90% 88% WEC - All Boilers in the world was supplied by SFW over 8 years burners avoiding the cost and maintenance of 85.6% 89% 87% 87.0%85.3% ago. fuel dryers, mills, coal pipes and burners. For the 87.0% 88% 86% 85.6% 85.3%85.6% 85% Located in Bedzin, Poland and in operation CFB, the fuel is coarsely ground and dropped 87% 85.3% 84% 86% since 2009, the Lagisza CFB powerplant has into fuel chutes using gravity to get the fuel into 83% 85% 82% a 460 MWe supercritical SFW CFB that has the boiler,” Giglio said. Average Annual Plant Availability* (% of 8760 hours) Bituminous 84% BituminousCoal coal Brown coal and lignite Other fuels 93.3% 92.9% unique and pioneering design features with an At the same time, CFB technology addresses 91.5% 91.6% *Note: Plant Availability 83% means total time plant is available to run accounting f or both planned and unplanned dow ntime. SFW CFB plant reliability values based on client supplied data reported over 2000-2015 period f or CFB plants mainly located in Europe. NERC (North America Reliability Corp), VGB and WEC (World Energy Council) availability data based on thermal steam pow er plant (PC impressive net plant efficiency of 43.3% (LHV) the issue of steam generator outages and 90.0% and CFB) data reported82% over 2000-2015 period. Since most of the large thermal plants globally are PC type plants they are a good representation f or PC plant availability. Chart created on 22Jun17 91.6% 89.1% 88.7% Bituminous coal Brown and on lignite Other and fuels 88.6% 88.4% on bituminous coal. “Perhaps most importantly, theircoal effect bottom line economics *Note: Plant Availability means and unplanned dow ntime. SFW CFB plant reliability based on client supplied data over 89.1%total time plant is available to run accounting for both planned thereported plant meets its permitted stack emissions 87.0% consequently, on the operating lifevalues of a plant. 2000-2015 period for CFB plants 88.6% mainly located 88.4%in Europe. NERC (North America Reliability Corp), VGB and WEC (World Energy Council) availability data based on thermal steam pow er plant (PC 85.6% without SCR or FGD equipment, thereby saving demonstrates superior globallytechnology are PC type plants they are a good representation for PC plant availability. Chart created on 22Jun17 85.3% and CFB) data reported over 2000-2015 period. Since most of the large thermal plantsCFB Tauron over $100 million in its construction life-cycle economics, with up to an average cost and millions more 5.5 percentage point year in avoided O&M superiority in plant “Finally, unlike PC boilers, each ilability* hours) Coal minous coal (% of 8760Brown Brown coal and and Lignite lignite Other fuels costs,” said Gigilio. availability. 93.3% 92.9% unplanned dow ntime. SFW CFB plant reliability values based on client supplied data reported over plant is available to run accounting f or both planned and 91.5% Specifically, for pow er plant (PC the fuel doesn’t have located in Europe. NERC (North America Reliability Corp), VGB and WEC (World Energy Council) availability data based on thermal steam period. Since most of the large thermal plants globally are PC type plants they are a good representation f or PC plant availability. Chart created on 22Jun17 to be finely ground, 93.3% 92.9% 90.0% Door to affordable and bituminous coal and 90.0% 91.5% % 88.6% 88.7% 88.7% brown coal and lignite, 88.4% dried or dispersed into secure power CFB plants have the furnace by burners For countries with domestic low rank coals, higher long-term plant avoiding the cost and lignites, waste coals or availability against all maintenance of fuel hard-to-burn fuels, like boilers of competing dryers, mills, coal pipes anthracite and petcoke, companies across the and burners. ” the CFB opens the door globe. Other Fuels l and lignite Other fuels to affordable and secure unplanned dow ntime. SFW CFB plant reliability values based on client supplied data reported over VGB and WEC (World “PC Energyboilers Council) availability data based on thermal steam powquality er plant (PC power over the long More than just various have trouble burning low PC type plants they are a good representation f or PC plant availability. Chart created on 22Jun17 term while lessening the risk of future carbon mixes fuels due to their narrow fuel specification regulation due to the CFB’s ability to utilize Despite the rapid increase of solar and wind that typically demands 5,500 kcal/kg (23 biomass and other carbon neutral fuels. projects, coal remains an important part MJ/kg) HHV or higher energy content, fuel An even more impressive example of the of a balanced portfolio strategy. In fact, as moisture below 30%-35%, and volatility above benefits of using CFB is demonstrated by the fuel flexibility enables increasing CFB plant 20%. However, this is not the case for CFB 2,200 MWe Green Power Plant in Samcheok, commissions, fuel agnostic plant owners are technology. South Korea. The Samcheok plant has four provided a market advantage. For instance, Modern CFBs can reliably burn both low rank larger 550 MWe SFW CFBs utilizing ultraCLECO’s Brame Energy Center, located in Boyce, coals and petroleum cokes with heating values supercritical steam conditions (257 barg, Louisiana and in commercial service since 2010, ranging from 1,000 to 8,500 kcal/kg (4 to 35 603/603°C). has the ability to burn a wide range of market MJ/kg), fuel ash and moisture levels as high as The Samcheok plant began operation in 2016 fuels, including 100% petroleum coke, 100% 60%, and volatiles down to 5%,” Giglio added. and meets very low SOx and NOx emissions Illinois No. 6, 100% sub-bituminous Powder at 50 ppm without any FGD scrubber, saving River Basin coal, and can co-fire up to 92% What makes CFB technology so special? Korea’s Southern Power Company (KOSPO) over lignite or co-fire up to 5% paper sludge or wood According to Giglio, plants can fully rely on CFB $100m in construction cost. These CFBs are the waste. to burn low rank coals because of its unique most advanced units in the world. However, Giglio said that fuel flexibility flameless, low-temperature combustion process. PC boilers rely on an open flame, but the CFB’s circulating solids can achieve high combustion and heat transfer efficiency, in turn allowing fuel to circulate until completely burned. “The ash in the fuel does not melt or soften at low bed temperatures which allows the CFB to avoid the fouling and corrosion problems encountered in conventional boilers,” Giglio said. Moreover, the CFB’s key design criteria is that the combustion temperature is well below the fuel ash’s melting temperature. Giglio added that since the ash doesn’t melt, fouling and corrosion is minimised throughout the entire boiler, thus allowing the CFB to be reliable on levels that the PC boilers cannot. Lower combustion temperatures also also minimise NOx, thus avoiding the expense of selective The 460 MWe Lagisza Power Plant in Poland utilizes our CFB technology catalytic reduction (SCR). Limestone can also and is the longest running supercritical CFB plant in the world. be added right into the furnace to capture SO2, ASIAN POWER 15


FIRST to develop this market further.

vietnam’s decision 11 VIETNAM

David Harrison

Van Hai Nguyen

Asian Power talked to Mayer Brown JSM partner David Harrison and associate Van Hai Nguyen to find out what Vietnam’s Decision 11 is and how it will affect power projects in the future, particularly solar. What exactly is Vietnam’s Decision 11? Decision 11 is groundbreaking in that it is the first Vietnamese legal instrument that specifically governs the development of the country’s solar power sector. Decision 11 sets out the general legal framework for developing solar power projects and provides for a feed-in-tariff under which the single offtaker (i.e. Electricity of Vietnam (EVN), a 100% state-owned entity) will purchase solar power from generating companies. The tariff is set at US$0.0935 per kWH. Prior to Decision 11, there was no regulatory guidance on how to invest in, and operate, a solar power project in Vietnam. Prior to its issuance, a few projects were developed on an ad hoc basis. Overall, Decision 11 is a positive development as it sets out a roadmap with expectations and understandings on the tariff, investment incentives, and the regulatory process that will guide sponsors, financiers, and government agencies. How will investors be affected by this? The introduction of a general framework for solar power projects is a welcome – and, in the minds of some investors, an overdue legal development. The focus should now be on improving the draft template power purchase agreement (PPA) circulated by the Ministry of Industry and Trade (MOIT) in June. Do you have any worries about Decision 11? Decision 11 still has certain limitations, some of which pertain to the Vietnamese power market in general, and others that result from gaps in the legal framework governing this industry. For example, Decision 11 does not provide for a direct PPA which would have allowed large corporate customers such as industrial parks or manufacturing facilities to purchase solar power directly from independent power producing sellers (IPPs). This structure was once considered in the context of wind power, but all power sales must flow through EVN. Two significant and inter-related hurdles for solar power in Vietnam are: 1) lack of clarity about the ability of investors to benefit from a government guarantee of EVN’s obligations as the sole offtaker, and 2) the quality of the draft template PPA. Decision 11 requires that the purchase of all grid-connected power must be based on a standard PPA template.

16 ASIAN POWER

Will prosumers opt to disconnect from the grid?

Meet the energy “prosumers”

W

THAiland

hen Japan’s largest utility Tokyo Electric Power Company Holdings, Inc. announced a US$660,592.50 equity investment in Moixa Energy Holdings earlier this year, it took under its wing one of the companies that could soon create a new generation of people who both produce and consume energy, or simply “prosumers.” In Southeast Asia, where solar PV has strong potential, the prosumer trend could be an inevitability, according to analysts. But they stressed that policy support will be crucial to develop this emerging cohort. Energy markets around the world will also need to figure how to cope with this major shift in power consumption patterns, and maybe even prepare for a mass defection from the grid. Moixa said residential customers that use smart batteries can cut down on electricity costs by storing spare solar or cheap tariff electricity, and a proprietary platform makes it easy to manage the whole affair. Similarly, in Southeast Asia, especially in major cities, prosumers could become a critical cog in meeting growing electricity needs, said Badariah Yosiyana, manager of ASEAN-German Energy Programme, at ASEAN Centre for Energy. Malaysia, Indonesia, the Philippines and Singapore have enabled net metering measures to support this trend, but stronger policy measures are required

Prajit Ghosh

Need for policies “This can include regulations or guidelines to connect and sell power to the grid. This can also include more structural reforms, such as creating new regulatory frameworks that allow utilities to develop new business models and new grid technology as prosumers scale-up,” she added. But the rise of prosumers can also bring about a new generation of consumers that choose to completely disconnect from the grid. “If this trend takes off, the remaining customers would need to pay a higher percentage of the fixed costs, setting off a spiral where consumers increasingly defect from the grid, adversely affecting commodity demand,” said Prajit Ghosh, head of Americas power and renewables research at Wood Mackenzie. He explained that with the advent of distributed rooftop solar, a typical solar home now displays a consumption profile that is starkly different from a non-solar home. This can be seen when comparing a prosumer’s and typical consumer’s load duration curve, which showed the percent of time consumption is above a given electrical demand level. “A prosumer consumption pattern changes radically as the prosumer produces their own energy about 40% of the time and sometimes sells back surplus energy to the power grid, and consumes the other 60% of the time,” said Ghosh. “With a combination of solar and storage, the prosumer could theoretically completely disconnect from the grid.” Still, this scenario of mass defection from the grid could be a long way off. Whilst recent advances in solar and storage technologies have helped pushed the prosumer trend, the viability of becoming one remains “extremely complicated” and highly dependent on factors like local net metering laws, said Ghosh.

Load duration for a typical consumer and a “prosumer”

Source: Wood Mackenzie Southern California Edison, NREL PVWatts


FIRST

Jack Kneeland

Thailand is about to hit the bottom of the well

Please, mind the gas

W

THAiland

hen Thailand looks to the future of its natural gas supply, the next two decades will be marked with a rapid increase of imported liquefied natural gas or LNG. Analysts warn this major shift will likely expose the country to a panoply of price and supply risks, but also bring a big basket of new energy investments. “Thailand will no longer be able to rely on piped natural gas as a cornerstone fuel, this will create unprecedented dependency on imported LNG,” said Jack Kneeland, senior advisor, new energy at AWR Lloyd. “Drastically increased LNG exposure combined with technology, global energy dynamics, and regulations bring unprecedented threats and opportunities to the Thai power

sector and its participants,” he added. Less gas, higher cost Kneeland’s observation came amidst an assertion that the government forecasts for LNG imports may be underestimated, based on his company’s gas supply and demand model. “Reserves are not being replaced,” he said, pointing out that Thailand’s 1P reserve life index stood at just 6.6 years and has declined by half over the last decade. “Peak production occurred in 2014; Thailand’s 2P reserve life is collapsing.” Thailand also increased by 55% the number of development wells drilled between 2013 to 2015 to maintain production volumes, which Kneeland said has pushed Thailand into a corner of

producing less gas at a higher cost. He reckoned all these factors will lead to Thailand becoming more reliant on imported LNG compared to piped natural gas, which will have far-reaching effects on the Thai power sector and its participants, such as potential consumer price shocks and an LNG infrastructure boom. “As Thailand’s LNG weighting increases, the government will lose its ability to manage natural gas pricing exposing consumers for the first time directly to international market prices,” said Kneeland. “The Thai power industry has benefitted greatly from the stability provided by piped gas with price buffers – increased reliance on LNG shakes this up.” The government has begun to prepare for this inevitability by starting and expanding market liberalisation efforts, said Kneeland, which is expected to increase competition for imported gas at more reasonable prices. “Competition is mounting for billions of dollars worth of investments for LNG infrastructure,” said Kneeland. “A battle between major players is already underway. New entrants continue to explore gas and LNG related opportunities.”

Thailand natural gas reserves vs production

Source: DMF

the chartist: Southeast Asia to spend $500b on power projects in the next five years Over the next five years, over 32,700 active projects are scheduled for construction start-up, amounting to a potential investment of more than $4.1t, according to Industrial Info Resources. East and Southeast Asia, with an investment value of $1.27t, represent more than half of the whole continent’s activity in power generation spending. In SEA, Industrial Info is tracking 3,300+ active projects that are scheduled for construction start-up, reflecting potential spending of more than $505b. Indonesia leads in project activity with almost 30% of the region’s total investment value. The Philippines is second, although it has the highest number of projects, with 18.6%. Vietnam ranked third with 19.5%. Coal is still a major fuel source at 29.9% in power generation spending in the region.

Representing 7,803 projects valued at over $1.27t

Source: Industrial Info Resources

5-year (2018-22) spending analysis by project type status

Source: Industrial Info Resources

ASIAN POWER 17


FIRST

Scrambling for IPOs in India

Solar power capacity addition and tender issuance

SIngapore

W

INdia

hen Indian solar and storage developer Acme Solar announced plans to raise US$335m (Rs2,200 crore) through an initial public offering or IPO, it was a logical strategic move after the company won an auction bidding earlier this year for the lowestpriced solar power project in the country’s history. Acme Solar secured the rights to develop a 200MW solar power project in Rajasthan-based Bhadia solar power park at a record tariff of Rs 2.44/kWh (3.7UScents/ kWh), and analysts note that as more renewable developers pursue their next stage of growth and investors look to cash in, IPOs will become a more common occurrence. But finalising deals might be trickier for less established firms. Mismatch in expectations “Financial investors looking for exits and developers looking to raise capital for new projects is creating urgency in equity market activity,” said Vinay Rustagi, managing director of Bridge to India. He described the current environment where deals are held up because of mismatch in pricing expectations and portfolio performance, even as developers rush to raise capital to sustain business plant WATCH

Yu Tat Ming, PacificLight

Source: Bridge to India

growth. In the past two years, significant capacity addition and allocations in the Indian solar sector has pushed developers to explore the IPO path. Rustagi noted that nine private developers, as of September, have rapidly built up solar portfolios exceeding 500MW, including Acme. These developers are Adani (2,038MW), Acme (1,713MW) and Renew (1,659MW), Greenko (1,407MW), Tata Power Renewable (1,382MW), Azure Power (1,102MW), Essel Infra (710MW), Engie (694MW), and Hero Future Energies (540MW). “Financial investors, in particular, are looking for exits and that is creating urgency in primary and secondary equity market activity,” said Rustagi. “Adani, Greenko and Tata Power Renewable, because of their large portfolio size, are the other potential candidates for an IPO in the near future.”

Singapore-based power generator and electricity retailer PacificLight takes pride in starting up the first power plant in the country to be fired entirely by liquefied natural gas. Asian Power spoke to PacificLight’s CEO Yu Tat Ming to discuss his upcoming plans for the power plant that provides an estimated 9% of Singapore’s total electricity needs.

Vinay Rustagi

Azure Power wins 260MW solar bid

AGL won’t extend Liddell beyond 2022

TEPCO to build 1,300MW gas plant

INDIA

AUSTRALIA

JAPAN

Azure Power announced that it has won a 260MW solar project in an auction conducted by Gujarat Urja Vikas Nigam Ltd (GUVNL). The 260MW allocation is the largest allocation by GUVNL to a solar power developer, 52% of the total allocated capacity of 500 MW announced. Azure Power will provide power for 25 years to GUVNL which has been rated AA- by ICRA, a Moody’s company, at a tariff of INR 2.67 (~US$ 0.04) per kWh. The project will be developed by Azure Power outside a solar park and is likely to be commissioned in 2019. 18 ASIAN POWER

PACIFICLIGHT ZEROING IN ON 800MW PLANT’S EFFICIENCY

AGL confirmed it will not extend the operating life of the ageing Liddell coal-fired power plant beyond its scheduled decommissioning in 2022. According to Enerdata, this decision was taken in April 2015 already but the company confirmed it again, thus ending the ongoing discussions about the plant’s future and comes at a time when Delta Electricity was considering to acquire the asset. The 2,000 MW facility is located near Muswellbrook at Lake Liddell. It generates about 8 TWh of power per year.

TEPCO and JXTG Holdings have agreed to jointly build a 1,300MW gas-fired power plant in the Japanese city of Kawasaki. According to Enerdata, a 50-50 joint venture will be set up for this purpose in October 2017. The whole project is expected to amount roughly US$1.08b. The power plant should be commissioned around 2024. JXTG already operates an 850MW gas-fired power plant along with Tokyo Gas in Kawasaki through Kawasaki Natural Gas Power. The two companies submitted an extension plan back in 2015.

What is PacificLight’s biggest plan to date? Singapore is currently brimming with generation capacity, hence our focus is to position ourselves well for the recovery of the market by ensuring that our 800MW plant continues to set the industry benchmark in efficiency and availability, and by fostering close collaboration with business partners beyond the traditional business dealings that leverage each other’s strength. We have implemented a number of initiatives that have established our plant as a benchmark for other plants in terms of both efficiency and availability. These measures included improving the hydrogen purity of the generator, the installation of a variable speed drive for the feedwater pumps and implementation of a gas compressor bypass. We have worked closely with Siemens, our OEM, such that we have extended the interval between major overhaul of the gas turbine. We have been focussing on projects that increase the plant’s efficiency and reduce our carbon footprint. One key project has resulted in a sizable reduction of 2x850 kW auxiliary power consumption of our feedwater pumps, thereby improving the net generation output and efficiency of each unit. The project was completed last year. What do you think is Singapore’s biggest energy problem at the moment and how should this be addressed? The biggest energy challenge facing the world, not just Singapore, is climate change. It is a challenge that demands collective action. As part of international efforts, Singapore has committed to reducing its emissions intensity by 36% from 2005 levels by 2030, and stabilise emissions with the aim of peaking around 2030. The formation of a Singapore Chapter of World Energy Council in November 2016, of which PacificLight is one of six founding members, allows Singapore to draw on the wealth of research and international best practices that WEC provides to its members from almost 100 countries around the globe. At a corporate level, sustainability forms one of PacificLight five core values and we believe that every individual and business needs to play a part in building a more energy-efficient world.


Co-published corporate profile

Siemens’ new HL-class turbines push boundaries in power plant efficiency The growing power generation industry provides a massive opportunity for new technologies.

P

ressure looms as the power generating industry continues to grow, with investments of up to USD10t expected to be invested in the industry until 2040. With the word decarbonisation making rounds in the industry and with the global drive towards more renewables in the energy mix, 70% of these investments are expected to go to hydropower, biomass, solar and wind energy, among others. At the same time, Asia is fast becoming the world’s major market for power consumption, with 50% of CO2 emissions expected to come from the region’s growing economies without strong climate policies . These trends, coupled with digitalisation, have been spurring a wave of innovation in the arena of power generation and have at the same time posed a tremendous challenge for Asian countries to devise plans towards greater efficiency and reliability in their power industries. Siemens brings its electrification heritage, collaborative experience, and technology-driven expertise to the forefront of this innovation wave with its HL-class, the firm’s latest breakthrough in the efficiency arena. Willi Meixner, CEO of Power and Gas Division at Siemens, said that at the foundational principle for energy efficiency is to avoid consuming energy at all. To be able to apply this principle, Siemens works to link the value chains

Willi Meixner (CEO Power and Gas Division, Siemens)

layer coatings, super-efficient internal cooling features as well as an optimized water-steam cycle,” he said. Furthermore, optimised sealings minimise cooling and air leakage. At the same time, evolutionary 3D-blading is enabling higher aero-efficiency for the compressor. Meixner added that the ongoing discussion about CO2 reduction in power generation Backing renewables and the diesel engine debate will both have “Bringing renewables online and backing them up a significant impact conventional fossil with storage and conventional, predominantly energy consumption. gas-fired power “Bringing renewables online Decarbonisation will generation is and backing them up with remain a buzzword as gas what we see the storage and conventional, will mix with renewables challenge our in playing the dominant industry is in and predominantly gas-fired role in reducing carbon our industry will power generation is what emissions. In fact, Meixner have to master,” we see the challenge our said that in 2020, gas said Meixner. industry is in.” will overtake coal and in Picking up from 2030, gas will overtake oil as the primary energy its well-known H- and F-class units, Siemens source across all industries. addresses this challenge with its advanced Meixner said that due to the growth of HL-class gas turbines, the latest of which boasts power generation in the region, there is a trend of a 817MW power output and more than 63% to larger, utility size, central applications, a efficiency, more than 200MW in output than need that has so far been well-addressed by what has traditionally been supplied with the the H- class and F-class units. Siemens has H-class. The HL-class is also targeted to be the also seen over the last decade an evolving complement to renewable energy with 85MW decentral market, Thailand being one of the single cycle ramp ups per minute, considered to leading markets, with combined cogeneration be unprecedented in the industry. units, 100-150MW where its SGT-800 is most The speed with which efficiency levels has needed. Lastly, Siemens observes how the increased over the past 16 years is also evidence entire oil and gas industry continues to require of the rapid development of technology in the mechanical prime speed for offshore, onshore, power generation scene. According to Mexiner, oil, and gas production and processing. it took 10 years to increase the efficiency of Siemens’ new HL-class consists of three combined cycle power plants from 58 to 60%, engines SGT5-9000HL, SGT6-9000HL and six years to increase it further to reach 61.5%, SGT5-8000HL, all of which reach more than and now, with the HL-class, Siemens aims to 63% combined cycle efficiency. The air-cooled reach efficiency levels beyond 63% with a SGT-9000HL series is expected to provide a mid-term goal of 65%. According to Meixner, capacity of 545MW for the 50Hz market and HL-class turbines operate at high combustion 374MW in the 60Hz version. Meanwhile, the temperatures to achieve top performance. SGT 5-8000HL provides 453MW in simple-cycle “Siemens’ specialists have developed advanced operation. combustion technologies, innovative multitogether, where their colleagues from building technology and energy management partner with them in the generation department to work together going into industrial complexes and working with customers in reducing utility bills and energy consumption.

Siemens HL-Class gas turbines ASIAN POWER 19


FIRST

Southeast Asia’s dim solar potential

SOLAR BOOM OR BUST?

SOUTHEAST ASIA

W

hen solar industry observers look at Southeast Asia’s industry report card, many shake their heads, thinking of only one thing: the region’s performance was a letdown. Southeast Asia is not reaching its full potential, looking great only on paper and wasting its excellent fundamentals due to inadequate regulatory framework and policy support, according to Stefan Robertsson, principal at The Lantau Group. Southeast Asia, a region hailed with relatively favorable economics and attracted interest from investors and developers, only built 1.7GW of solar power in 2016. This is in stark contrast to China’s 34.5GW of annual installed capacity which brought to 78.1GW its total installed capacity. The US also pressed on the pedal, adding 14.7GW of installed capacity in 2016, bringing its total to 40.3GW. “Support for solar and renewables are often weak, designed poorly, or keep changing in Southeast Asia,” said Robertsson. “It is not just about the feed-in tariffs,” he added. “General industry regulation, and a lack of deregulation, often frustrates progress.” Low retail tariffs, Robertsson argued, already make it difficult to get solar capacity built. But another aspect that compounds the problem is the low cost of power that is charged by the various utilities around the region, which have eroded their financial position to a point where

they can do little to support solar projects. “The weak financial profile of these utilities have made it harder to finance projects,” he said, citing the state-owned Vietnam Electricity(EVN). “In markets like Indonesia it is no longer an issue - but it’s one of the key roadblocks for Vietnam where EVN at this time is viewed as not being able to back up a power purchase agreement (PPA), even if the PPA itself will be financed.” The uneven state of development within the region is evident in the lopsided distribution of additional installed capacity in 2016: Of the 1.7GW built in Southeast Asia, the bulk went to Thailand (940MW) and Philippines (613MW), with sprinkles in Indonesia (79MW), Singapore (51MW) and Malaysia (35MW). Notably, solar also accounts for a mere 1.5% of Southeast Asia’s total generation capacity in 2016, and is dwarfed by hydro (22.1%), coal (31.5%) and natural gas (36.9%). Other renewables count for just 3.3% of the energy mix. Pointing fingers Robertsson laid the blame for this slow growth in solar to the lack of effective policies and regulations for solar across Southeast Asia. Indonesia does not have a structured solar programme, the Philippines has seen developers without quotas sitting on so-called “stranded” development projects, and even regional solar leader Thailand is going through a change in regulations that slowed progress. He said the exception is Malaysia, where the FiT program has been phased out, replaced by bidding and net metering. “Deregulation and electricity market reform can be the most effective form of support for renewable energy,” said Robertsson. “In a deregulated electricity pool market, the price for electricity is higher when demand is higher. In Southeast Asia, demand is high in the middle of the day when solar generation is high.”

PHILIPPINES

Tony Segadelli

Tony Segadelli, managing director of OWL Energy, shares his forecast on the Asian solar power industry. How do you think will the year end for the solar industry? Are there signs that the boom is dying down? Quite the opposite, it’s still taking off. The Philippines obviously had a complete mad rush to build 900MW, and now there’s a more sustainable basis coming through. OWL Energy for one is doing detailed design and engineering, procurement, and construction management projects in the Philippines. We are doing the same in Thailand. There is a plan to build another 500MW of solar power in Thailand alone. In Vietnam, the government has finally decided that they want to build more solar and a lot of wind and we’re acting on some of the movers in that. Malaysia’s finally decided it wants to get into solar, and if you get into Indonesia, a lot of the outlying islands with smaller grids are looking into solar as well. Where are the energy investment hotspots in ASEAN and why should firms invest? For Indonesia and Vietnam, both countries have huge power demands going forward. In terms of percentage growth, you have Cambodia and Myanmar, where there’s a lot of coal issues to go through because no contracts are being signed currently.

Is Indonesia’s tighter policy on power utilities doing more harm than good? When the Ministry of Energy and Mineral Resources (MEMR) issued a new regulation in July that would tighten control over how power and geothermal companies transfer shares and change board members, analysts were quick to warn of its possibly strong deterrent effect on investors. Daniel Ginting, partner at Allen & Overy in Jakarta, explained that Reg. 42/2017 provides that most transfers of shares or participating interests in energy and mining companies and changes to the boards of directors and commissioners of such companies require prior approval from MEMR. “Whilst similar forms of governmental control already existed in the upstream oil & gas and the mining sectors, Reg. 42/2017 now extends these to the downstream oil & gas and power sectors, including geothermal,” he said. Ginting added there are workarounds to the regulation, but they will involve more work. Investments may now have to be structured or restructured further up the corporate chain or through the issuance of new shares in the 20 ASIAN POWER

relevant energy or mining company. “Whilst such structuring may be possible, it is often cumbersome and time consuming to put in place and is unlikely to be attractive to new foreign investors,” he said. A more cautious stance “All such additional requirements also come at a cost for investors, increasing risk and lowering rates of return and making the Indonesian market less attractive by comparison to alternative markets in the region,” Ginting added. Luke Devine from Baker McKenzie said the regulation, which came out of left field, will put project lenders in a more cautionary stance when engaging independent power producers. Many will likely insist on a twotiered shareholding structure in all IPPs so they can enforce share security at the holding company level without having to transfer any shares in the IPP itself if a default occurs. “Lenders particularly will have to look closely at the corporate structures of IPPs to ensure that they can continue to enjoy effective security over the project,” he said.

Daniel Ginting

Luke Devine


Once completed, the US$5b projects will significantly boost the group’s net effective MW capacity by 1,268MW. The projects will contribute significantly to the group’s profitability when the power plants enter into commercial operations.

Tan Sri (Dr.) Francis Yeoh CEO YTL Power International Berhad


CEO INTERVIEW

YTL Power International Berhad’s Tan Sri Francis Yeoh is 2017’s CEO of the Year CEO Tan Sri Francis Yeoh reveals the company’s two big projects for the year worth US$5b — the first oil shale mine mouth power plant and the 2x660MW ultra super critical coal-fired power plant.

T

an Sri Francis Yeoh is the managing director of YTL Group of Companies. He took over the running of his family company in 1988 and grew it into a multidisciplinary conglomerate comprising five listed entities: YTL Corporation Berhad, YTL Power International Berhad, YTL Land & Development Berhad, Starhill Global REIT and YTL Hospitality REIT. They have a combined market capitalisation of approximately RM35.5b (US$8.3b) as at 31 May 2017 and total assets of over RM70.1b (US$16.3b) as at 31 December 2016. He has recently been awarded as the CEO of the Year in the Asian Power Awards 2017, and we interviewed him to know more about his plans as YTL Power International Berhad’s leader. What are your top three priorities for YTL Power’s generation side? My top priorities right now are to successfully execute the two big projects we have on hand which total almost US$5 billion. Beyond that I am quite happy with YTL Power’s geographical footprint which stretches all the way from the UK, Middle East, ASEAN and Australia. We hope we can build on this and achieve more scale with more acquisitions and investments. At the same time, we also need to balance out shareholder satisfaction and maintain a certain level of dividends. Last but not least in whatever we do and consider in the future, sustainability is a very important factor. We have an entire sustainability team in our organisation vetting our businesses to make sure we are operating at the highest standards. Can you expound more on these two big projects? What are these and where are they located? At present, we are constructing the first oil shale mine mouth power plant with a capacity of 2 x 235 MW (net) utilising the circulating fluidised bed boilers (CFB) technology in the Hashemite Kingdom of Jordan. The project is located at Attarat um Guhdran which is 110 km south-east of Amman. At a total investment of USD 2.1 billion, it is the largest private sector project in Jordan to-date and is expected to meet 15% of Jordan’s annual electricity demand. Attarat Power Company (APCO) which is the project company has entered into a 30-year Power Purchase Agreement (PPA) with the Jordanian national utility and single buyer, NEPCO for the sale of the entire electric capacity and net electrical output. The other project we are currently developing is in Cirebon Regency, West Java, Indonesia. The 2 x 660 MW (net) coal fired power plant will utilise state-of-the-art ultra-supercritical technology. The project company, PT Tanjung Jati Power Company has executed a Power Purchase Agreement (PPA) with PT PLN (Persero) in December 2015. When do you expect completion? The project in Jordan achieved financial close on 16 March 2017 and Notice to Proceed has been issued to the EPC Contractor with commercial operations scheduled for mid-2020. On the other hand, in Indonesia, we are currently arranging financing for the project and the project is expected to achieve financial close in 2018. Once commissioned, how will these two big projects boost the company with regard to capacity and profitability? Once completed the projects will significantly boost the group’s net effective MW capacity by 1,268 MW. The projects will contribute

significantly to the group’s profitability when the power plants enter into commercial operations. What are the biggest industry challenges YTL Power is currently facing in generation? I have always talked about the need for a Transparent Coherent Regulatory Framework (TCRF) across the industry and unfortunately the evolution of TCRF is very patchy even in places like Europe which explains why they haven’t had a significant amount of reinvestment in infrastructure for some time. In the backdrop of all this you have private equity money flush with cheap capital crowding out the market, which means genuine power companies like us find it hard to grow and secure new projects. However, we are patient, we have a strong balance sheet and at some point, there should be a change in the credit cycle and significant opportunities should emerge. What is YTL Power’s biggest plan to date on the generation side? We are always on the lookout for new opportunities in generation whether it is bidding for existing assets or investing in new projects. As mentioned earlier one of our key objectives is to build on our existing footprint. Our track record of executing, owning and operating assets is arguably amongst the best in the business whether it is YTL PowerSeraya in Singapore or PT Jawa Power in Indonesia. If we can execute our oil shale IPP project in Jordan and our coal fired project in Indonesia simultaneously and on time, I think YTL Power will have a very strong standing in the industry and give us good currency to bid for new opportunities around the world. What are the newest generation projects that you have as of the moment and what are those that are upcoming? Our ongoing greenfield projects are our 470MW oil shale IPP project in Jordan and our 1,320MW coal-fired Tanjung Jati A project in Indonesia. We will look to focus on and grow our footprint in areas where we have both the technical expertise and local understanding. What do you think is Malaysia’s biggest energy problem at the moment and how should this be addressed? YTL Power pioneered the financing of the very first Independent Power Producer in Malaysia using ringgit denominated currency and also by issuing the first long term 15-year bond issued by the Employee Provident Fund. Since then all the IPPs have followed suit using local financing and an Energy Commission has been established to ensure competition in generation so there are no major problems in the Malaysian power industry. I would go on and add that with this, the Malaysian power sector is in very strong stead. YTL Power’s 4Q profit dropped by almost 50% yoy. What caused the drop and how will you bounce back? The headline fall in profit was due to a big exceptional item the year before where we had a deferred tax credit on PT Jawa Power. On top of that the 21-year PPA of our Malaysian Paka and Pasir Gudang IPPs came to an end. On the bright side, we have tendered for and won a 3 year 10 month extension to the previous concession in Paka so we look forward to implanting that contract successfully. ASIAN POWER 23


sector report: COAL

Chinese coal-fired power plants are leading the race to change

Why Southeast Asian countries are left behind in crackdown on coal China is making the rest of the region eat dust with its progress on kicking its coal addiction as it eyes shutting down existing old plants, whilst Southeast Asia continues to cling on to coal for power.

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hen energy experts from the Centre for American Progress visited China late last year, they arrived deeply curious about the steep decline of coal investment in a country with the largest coal generation capacity in the world. What they uncovered was that, despite recent trends, China’s energy strategy still hinges on coal-fired plants, but newer, more efficient ones that few in the world can rival. This array of ultra-supercritical power plants should help pave the way for strong economic growth, cleaner cities, and affordable electricity to its 1.3 billion population, at least until China ramps up on renewables in the next decade. It would be tempting to think that coal is losing momentum in China as investment in new coal-fired capacity plummeted to less than 20 GW in 2016 from 50 GW annually five years prior. But this is merely a transition phase as the government scraps its inefficient coal plants in favor of a new greener coal fleet, said Melanie Hart, senior fellow and director, China policy at the Centre for American Progress. “The nation’s coal sector is undergoing a massive transformation that extends from the mines to the power plants, from Ordos to Shanghai. China is indeed going green,” she said. “The nation is on track to overdeliver on the emissions reduction commitments it put forward under the Paris climate agreement, and making coal cleaner is an integral part of the process.” China has committed to install 800 to 1,000GW of new renewable capacity by 2030, but it cannot immediately replace coal for renewables due to the large energy requirements involved. So whilst the government spends the next decade building new solar, wind, hydro and nuclear plants to power a 24 ASIAN POWER

Beijing’s solution is to move full speed ahead with renewables whilst investing in what may become the most efficient, least polluting coal fleet the world has ever seen.

large portion of the nation, it is also rolling out new technologies for coal plants designed to cut down local air pollution and climate emissions. “Its humongous population and energy needs means coal remains indispensable,” said Hart. “Beijing’s solution is to move full speed ahead with renewables whilst simultaneously investing in what may become the most efficient, least polluting coal fleet the world has ever seen.” She said China is already shutting down older, lower-efficiency and high-emissions plants to replace them with new, lower-emitting coal plants can be considered some of the most efficient in the world, even beating those operating in the United States. Coal wars When the Centre of American Progress compared the top 100 most efficient coal-fired power units in China with the top 100 in the US, “the difference is astounding,” said Hart. “Compared with the Chinese coal fleet, even the best U.S. plants are running older, less efficient technologies.” She noted the US only has one ultra-supercritical power plant, the most efficient of the three types because they produce more energy with less coal and generate less emissions. The rest of the US fleet is either subcritical or supercritical. In contrast, China is retiring older plants and adding ultra-supercritical facilities replete with advanced technology; out of China’s top 100 units, 90 are ultra-supercritical plants. It is not surprising then that China’s top 100 units showed superior efficiency and emissions performance: Their total nameplate capacity reached 82.6 GW (higher than the 80.1 GW


sector report: COAL Capacity additions by country

Capacity additions by technology

Source: National power development plans

Source: National power development plans

for US equivalents), cumulative annual carbon emissions were at an estimated 342 million metric tons (lower than the roughly 362 million metric tons for the US), and only 286.42 grams of coal equivalent or gce consumed per kilowatt-hour of power produced in China (compared to 374.96 gce consumed per kilowatt hour produced at lower heating value in the US). As China becomes more committed to coal efficiency, the desire to build more conventional coal-fired power plants is waning, and many of the existing ones in operations “are actually white elephants that Chinese leaders are already targeting in a wave of forced plant closures,” said Hart. S&P Global Platts research showed that out of the 920GW of total operating coal-fired power capacity in China, roughly 19% uses ultra-supercritical technology, 25% uses supercritical technology, and 56% uses subcritical technology. “However, the new builds are increasingly ultra-supercritical plants, and Beijing is steadily ratcheting up the emissions requirements and efficiency standards for those older plants as well,” said Hart. “As China’s power plants are becoming more efficient in their energy consumption and emissions, they are also becoming more efficient in terms of labor.” She recounted a tour of the Shanghai Waigaoqiao No. 3 power station which runs two 1,000MW ultra-supercritical units and supports 250 employees. By comparison, it takes 600 people to run the nearby Waigaoqiao No. 1 power station which runs four 300MW subcritical units. Guided by its clean energy policy, the Chinese government has recently cracked down on the coal-fired power construction that exploded after local officials were given the authority to approve such projects. “Beijing recognised that local incentive structures did not match national priorities and cracked the whip. Now thermal capacity growth is dropping, and that drop is likely to accelerate going forward.” Laszlo Varro, chief economist of the International Energy Agency, said the Chinese administration introduced a so-called ‘traffic light’ policy last year to prevent overinvestment in coal capacity, and to increase investment interest in energy efficiency as well as low-carbon electricity supply and networks. “A year after, we can see that this traffic light policy is proving to be effective,” he said. “This century so far was the century of coal, especially in China and India. This age of coal investment is now coming to an end--or at the very least, it is coming to a pause.” India’s ‘ultra’ aspirations Varro observed a similar decline in coal power generation investment in India driven by two factors: Financial difficulties of the Indian electricity sector and the increasing competitiveness of the solar power industry in India. “Questions are increasingly being raised about the economic necessity of new coal-fired power plants,” he said. Rather than

Yulanda Chung

Melanie Hart

Laszlo Varro

Lars Schernikau

building more conventional coal-fired plants, India is looking into constructing more efficient ones like those in China. In June, the Indian government announced the mounting of a National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation with a budget of US$238m. The country will also set up two Centres of Excellence on clean coal technology to the tune of US$5m each. India’s largest power producer NTPC is also spearheading the completion of the counrty’s first ultra-supercritical thermal power plant which will produce 1,000 MW in the first phase. Energy officials reportedly expect the plant to reach full operation by 2020 with four 1,000 MW units, and will complement the country’s line-up of supercritical power plants already in operation. Southeast Asia’s coal hunger As China and India both look to reduce their new coal capacity additions, the bustling region of Southeast Asia is expected to the opposite. Governments in the region are keen to build more coal power plants to take advantage of high resource availability and its relative cheapness compared to other available energy sources. But coal efficiency will increasingly become part of the conversation in Southeast Asia, according to energy experts, as renewables become more competitive and the emissions concerns grow louder. Soaring energy demand from growing population, rapid urbanisation and desire to widen electricity access will drive coal growth, said Dr Lars Schernikau, president of HMS Bergbau Group, Singapore and Germany. “Coal will be the fuel of choice, he said. “The material is easily available, the cheapest source of power and also the safest. All major Southeast Asian countries are constructing coal-fired power plants at a breath-taking pace,” he said. Schernikau forecasts the majority of the 400GW in power generation capacity to be added in Southeast Asia by 2040 will be coal-fired, and will raise coal’s share of the Southeast Asian power market to 50% from about 32% currently. “The availability of coal in the region, and its lower cost than competing fuels, has made coal the preferred option to fuel rising power demand,” concurred Sylvie Cornot-Gandolphe, research associate at The Oxford Institute for Energy Studies in a paper discussing the role of coal in Southeast Asia’s power sector and its implications for coal trade. She noted that Southeast Asia added 25GW of coal capacity from 2012 to 2016, accounting for 42% of total additional generation capacity, notably in a region with more diverse energy options. “Even the gas-producing countries in the region have introduced more coal in their electricity mix as gas shortages pushed them to diversify their mix. In the short to medium term, this trend is going to continue,” said Cornot-Gandolphe, citing that 29GW of coal-based capacity under construction in the region with most looking to finish by 2020. But even as Southeast ASIAN POWER 25


sector report: COAL financing for clean coal technologies for emerging Asia; and international cooperation framework to ensure the deployment of clean coal technologies, which are crucially important for abating greenhouse gas emissions. Han said in Southeast Asia, Thailand has shown success in clean coal technologies by retiring their old conventional coal power plants and replacing them with ultra-supercritical coal power plants. But community protests continue to rail against coal-fired power plants, and it will be a challenge for countries in the region to convince the public on the merits of using clean coal technologies instead of other options. “Seeking public acceptance on the cleaner use of coal through clean coal technologies will be crucial,” he said. “People are skeptical of the new technologies as they associate any use of coal with strong pollution.” “Experiences in developed nations, such as Japan, could provide good examples for achieving public consensus on coal use by showing that clean coal technologies uses coal more efficiently, that they are much cleaner than conventional plants, and that the emissions of plants using clean coal technologies are very close to those of gas-fired power plants.”

Existing coal capacity additions in Southeast Asia

Source: National power development plans

Asia ramps up its coal capacity, governments are still cognisant of their commitments to reduce greenhouse gas (GHG) emissions under the Paris Agreement. This has pushed nations to increase their renewables investment and incorporate coal efficiency initiatives in their energy plans. “The planned large increase in renewables (including hydro), together with the adoption of clean coal technologies, allow Southeast Asian nations to reconcile a growing coal consumption with national commitments to reduce their carbon intensity compared with a business-as-usual scenario,” she said. Enabling clean coal in ASEAN Clean coal technology will be a critical tool for Southeast Asia if it is determined to hit its emissions targets but there are obvious barriers to adoption such as investment cost and technology availability, said Han Phoumin, energy economist at Economic Research Institute for ASEAN and East Asia (ERIA), in a commentary for the Asian Development Bank Institute blog. “Policy approaches must be reviewed, therefore, so that emerging Asia can afford clean coal technologies and to allow for more sustainable green growth across ASEAN and emerging Asia,” he said. Citing an ERIA study he co-wrote last year on the strategic use of coal in ASEAN, Han said the application of inefficient technologies and ineffective environmental standards and regulations would lead to a waste of valuable coal resources. But the problem is that most ASEAN countries still cannot afford the most efficient technologies, such as ultra-supercritical. “The use of highly efficient technologies, such as ultrasupercritical, would provide better economic returns in any coal price scenario - $60/ton, $80/ton, and $100/ton - and that the electricity produced by ultra-supercritical plants was more affordable than the electricity produced with supercritical or other conventional technologies,” he said. “Although USC technology is one of the best options for raising plant efficiency and reducing carbon dioxide and local pollution, such as nitrogen oxides and sulfur oxides, many developing Asian countries still cannot afford the technology because the upfront investment costs are higher than those of supercritical and conventional technologies.” The likely scenario is Southeast Asia countries like Myanmar and Cambodia will likely build low-efficiency subcritical plants if they do not get access to ultra-supercritical technology or receive poor financial support from developed countries. “The higher upfront costs of clean coal techologies have been an issue for developers and investors,” said Han. “Failure to reduce these costs will mean falling public financial support for clean coal technologies in emerging Asia.” Lower costs are needed, according to ERIA’s Han, and these can be achieved through policy framework, such as attractive finance/loan schemes for ultra-supercritical power plants or through strong political institutions that can provide public 26 ASIAN POWER

Policy approaches must be reviewed, therefore, so that emerging Asia can afford clean coal technologies.

Higher efficiency plant isn’t the answer But Yulanda Chung, energy finance consultant, Institute for Energy Economics and Financial Analysis warned that in the case of Indonesia, investing in higher efficiency plants may not necessarily be the best way forward. She explained that given the current capacity payments to coal-fired power plants in Indonesia, further commitments to coal-fired power plants will only saddle the state utility PLN with costly 25-year power purchase agreements and payment for potentially unneeded power from underutilised plants. “If a coal-fired plant does not operate at a high capacity factor, the cost of generating each unit of electricity increases. Investments in these plants, especially ones with higher efficiency boilers, are commercially viable only when the plant is optimised at full load with high capacity factor,” said Chung. Whilst capacity payments are important to woo investors, “the more entrenched these commitments are and the farther they stretch into the future, the likelier they will serve the interest of aging and under-utilised thermal power plants at the expense of better investments,” she said. “An economical alternative to national energy security exists through the development of renewable energy and the diversification of energy sources in Indonesia’s power generation portfolio.” In recent years, China has been imposing increasingly tight emissions regulations on existing plants to rein in the country’s coal-fired power bubble, said Hart from the Centre for American Progress. Unable to meet the stringent standards - which have become stricter than the comparable US standards - many older Chinese coal-fired power plants are being steadily shut down. “One of the levers that Beijing is pulling to move China’s coalfired power fleet toward the cleanest, most efficient technologies on the market is steadily tightening pollution emissions standards,” said Hart. In November 2016, China issued a target to reduce sulfur oxide and nitrogen oxide emissions from coal-fired power plants more than 300 MW in size by at least 50% by 2020, and reducing carbon dioxide emissions to no more than 865 grams per kilowatt-hour. Low emissions have become such an important factor in the Chinese regulatory regime that cleaner plants are advertising their technical superiority. “Some coal-fired power facilities display real-time emission levels for key local air pollutants on large billboards outside the main gate,” said Hart, citing a visit late last year by the Centre for American Progress in Chinese plants. “Beijing is primarily concerned with tightening emissions standards for conventional air pollution, since that is the primary concern of the Chinese public. The next round of regulatory tightening will target carbon dioxide,” she added.


CO-PUBLISHED CORPORATE PROFILE

Long term presence in Vietnam

OWL Energy to fuel solar and wind growth in Vietnam Developers tap into wind speeds of up to 8mps and irradiance levels of over 1700 kWh/m2/yr.

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ietnam’s energy demand continues to grow at an astounding pace of 11-13% per year, inducing worries that the country’s renewable energy resources and its limited deployment capacity might not meet growing demands. The government had already cancelled up to 500 hydro projects in the last three years, with only 3GW remaining theoretical opportunity for small scale hydro With hydropower in Vietnam almost fully utilised, the government is looking to wind and solar energy for opportunities to fill in the gaps. They have implemented a solar feed-in tariff of USC9.35/kWh and wind tariff of USC7.8/kWh amidst very ambitious developers entering the market. Tony Segadelli, managing director, OWL Energy, said that both tariffs are sufficient for projects with good energy yields to be commercially viable. OWL Energy is banking on solar and wind opportunities in Vietnam and has embarked on a partnership with a Vietnamese developer supported by the International Finance Corporation (IFC) and a strong solar technology partner to develop up to 1GW solar power in the country. Segadelli added that they are also supporting an international investor planning to build up to 700MW of wind and solar. RE dominates Vietnam’s fast growth rate is due to a rapidly growing economy predicted to grow even more at 6% per year due to the presence of large industries. Despite a power development plan that shows growth based on coal and nuclear power constructions, the government’s recent total ban on nuclear and less emphasis on coal indicates that renewable energy needs to come in fast. “China is supplying electricity across Vietnam’s northern border. However as

Vietnam is a long, thin country, supply disruptions and power line losses mean that this doesn’t resolve power shortages. In terms of raw fossil fuels, demand for coal is outstripping supply and this is expected to get worse over the foreseeable future because the anthracite deposits are being depleted whilst the subbituminous reserves are expensive to extract,” Segadelli said. However, Segadelli said that he has never been more optimistic about Vietnam’s power sector. “There have been many false dawns in the Vietnamese power sector, however assuming that this one comes through it is likely that we would establish a long term presence in the country focusing on all forms of RE but able to take advantage of the fossil opportunities that arise,” Segadelli said. Vietnam’s recently released Decision 11 concretised the government’s decision to encourage more renewable energy projects. The document, which provides a regulatory framework for owning and contracting solar projects, sets clear guidelines for developers, owners, lenders, and for state-owned utility Vietnam Electricity (EVN). Present bottlenecks Vietnam has seen a significant rise in the number of developers attracted to the Vietnamese market. In fact, interest has also come from domestic companies with no solar experience, signifying the potential gains from the country’s energy landscape. Segadelli added that this trend is expected to increase over the next 3-5 years and beyond, adding hundreds of installed MW to the existing capacity.

Maximising Vietnam’s average wind speeds

The anticipated benefits of growth in the RE sector are not without their counterpart risks and challenges. Vietnam has good average wind speeds at 6-8 m/s with the southeast coastal areas and northern highlands being the highest wind speed areas. However, Vietnam’s mountainous topography limits its solar potential as building utility scale projects have proven challenging. A further one-third of the available land has an irradiance level of over 1700 kWh/m2/yr, potentially equivalent to 18 TWh/yr. “In order to build 45GW of solar PV at current module efficiencies requires 500-1000 km2 of land to be converted into solar farms, which sounds overly optimistic given the population density and limitation of building on nonmountainous land. In addition, to put this number into perspective, as of 2014 there was only 34GW installed using all technologies,” Segadelli said. Moreover, Segadelli said that the main issue at present relates to the bankability of the Vietnamese PPA, whether wind or solar. Major challenges abound, such as unlimited curtailment risk, arbitration in Vietnam, lack of political force majeure, changes to commercial operation date, lack of lenders’ step in rights, and lack of payment guarantees and conversion to USD. “The market hope is that because the IFC is directly investing in wind and solar projects that they have the ability to arrange more equitable PPA terms for all investors,” Segadelli said. Segadelli added that there is currently no

“Demand for coal is outstripping supply and this is expected to get worse over the foreseeable future.” ASIAN POWER 27


COUNTRY REPORT 1: AUSTRALIA

Broken Hill Solar Farm in Australia

Australia caught in the web of renewable energy and coal amidst rising power prices Australia, a country with deep concerns on climate change, is torn between choosing coal for lower power prices and reliability, or choosing renewables for environmental and emissions commitments.

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ast June, Australia’s chief scientist Dr. Alan Finkel presented a blueprint to optimise the National Electricity Market (NEM) and it put forward a Clean Energy Target (CET), amongst other recommendations, as the mechanism to guide the electricity sector towards reduced emissions, stronger energy security, and increased reliability. But the Turnbull government has signaled hesitation to adopt the recommendation as it prepares to unveil an energy policy overhaul. This has spurred a heated

Clean coal proponents argue that high-efficiency coal-fired power plants should not be ruled out.

There is sufficient capacity across the NEM but supply is tight for some regions if islanded

Source: Grattan analysis of registered generation capacity by region

28 ASIAN POWER

debate on Australia’s energy options and what will work best for a country with deep concerns about climate change and rising electricity prices. Environmental advocates have insisted renewables can be made more reliable with advanced battery storage technology, and stand as the smartest option if Australia wants to meet global emissions commitments and protect communities from toxic substances. On the other hand, clean coal proponents argue that high-efficiency low-emissions coal-fired power plants should not be ruled out of Australia’s future energy mix due to their reliable generation and less pollutant potential. At the centre of Australia’s policy conundrum is an ageing fleet of coalfired electricity generators, the majority of which will need to be refurbished, replaced, or retired by 2030, according to Andrew Nance, energy specialist at The Energy Project. The government has a range of energy and climate policy options available to take, but Nance explained that it is becoming clear to most experts that Australia will have to reduce its reliance on coal.

“All options deliver a shift away from coal as the dominant energy source for electricity generation in Australia to various combinations of gas and renewable energy sources – particularly wind and solar,” said Nance. “Assumptions about the future price of gas and the technology costs of renewables are therefore key variables in the forecasting of future prices.” What about lower costs? He explained that the uncertainty of technology costs and gas prices is contributing to a muddled forecast on future electricity prices. It also does not help, he said, that the prevailing uncertainty in electricity system investment due to the absence of clear climate policy is driving up prices. Should the government choose to pursue policy options that require lower overall economic costs, then it will likely focus on market mechanisms such as direct carbon price or electricity sectorspecific emissions intensity scheme, which Nance said showed consistently lower costs. Environmental advocates have thrown


COUNTRY REPORT 1: AUSTRALIA Wholesale electricity prices are now rising

Tony Wood

Andrew Nance Source: AER (2017c), AEMC (2013) and AEMC (2014)

their support behind policy options that support renewables, and shoot down extending the life of Australia’s ageing coal-fired power stations due to their negative health and environmental impact on communities. Nicola Rivers, director of advocacy and research at Environmental Justice Australia, cited the National Pollutant Inventory, which found Australia’s coalfired power stations emit more than 30 toxic substances. Under the Paris Agreement, Australia needs to clean up its act and reduce its emissions by 2628% below 2005 levels by 2030, with the electricity sector viewed as the primary sector to drive this reduction. Seeking to reduce electricity bills for its constituents and emissions, the Victoria State government is introducing a new renewable energy target into its legislation. The new policy sets a target of increasing to 25% the share of renewables in its power generation mix by 2020 and 40% by 2025, according to Enerdata, an energy consulting firm. It is also estimated to reduce household electricity bills by A$30 (US$23.6) annually over the life of the scheme and drive a 16% reduction in greenhouse gas emissions by 2034. This month, expressions of interest will also begin for a 650MW competitive reverse auction for renewable energy sources, one of the largest of its kind in Australia. It is expected to attract around A$1.3b (US$1.02b) in renewable projects, including wind and solar farms. “Looking to the longer term, market forces and climate goals are likely to make conventional coal and, eventually, gas power unviable, and bring on lots of renewables But renewables remain variable and intermittent,” said Peter Burn, head of influence and policy at the Australian Industry Group. “Low-cost ways must be found to turn an intermittent abundance of energy into a dependable resource when we need it. And the underlying cost of generating electricity needs to be pushed as low as

possible if we are to be competitive.” He said that whilst technology costs for solar, wind and batteries are being driven down every year, there is still room to improve finance costs and construction productivity, which can be explored once Australia determines if it has structurally higher costs to build new energy than other economies. Amidst criticisms on renewables, the Minerals Council of Australia, the industry association representing most of mining firms in the country, insisted that the policy path forward should still include coal but in the form of new highefficiency, low-emission coal plants. “The claim that having coal-fired electricity as part of our energy mix means that Australia cannot meet its emissions reduction targets under the Paris climate change agreement is wrong,” said Brendan Pearson, chief executive of the Minerals Council of Australia. He argued for replacing ageing coalfired power stations with new HELE plants, and that doing so could deliver annual emissions reductions of 24 million tonnes of carbon dioxide-equivalent greenhouse gases (MtCO2-e) by 2030, based on the council’s analysis. Upgrading several other coal-fired power stations with new technologies which improve efficiency and reduce emissions-intensity could deliver an additional 9 Mt of annual emissions reductions in 2030. On the issue of rising electricity prices, he further said that the clean coal option can take advantage of Australia’s rich reservoir of high quality affordable coal and can provide the lowest-cost form of generation. ‘Crisis point’ It will not be a surprise if the new government policy will be geared towards lowering electricity prices, which have ballooned in the past decade. Between 2006 and 2013, the average Australian household power bill increased by more than 85%, according to Tony Wood,

Mark Stewart

Nicola RIver

energy program director at Grattan Institute. “Australia’s National Electricity Market (NEM) is at crisis point,” said Wood.“Increasing prices for electricity have coincided with increasing concerns over whether the grid will break and whether there will be enough generation in future.” He recommended that policy should focus on stabilising a physical system with increasing levels of wind and solar. South Australia has provided a glimpse of the impact of inaction in this area - the region’s high share of wind and solar power and subsequent closure of coal generators has pushed up prices due to an increase in expensive gas generation in the mix. “New markets are already being developed to ensure the stability of the NEM. Rule changes are needed to ensure there can be quick and efficient responses if there are shortages in generation,” added Wood on how Australia’s policy should be shaped. “Power generators should be rewarded for being flexible and responding quickly. And more consumers should be offered a financial incentive to reduce their demand at peak times, thereby reducing pressure on the system.” Burn likewise suggested multiple reforms that “encourage and reward” flexibility of Australia’s electricity system. He also cited measures targeting demandside response, particularly in reducing demand at critical periods, as well as energy storage that should help stabilise a system that incorporates an increasing share of renewables. “If Australia is to reach its emission reduction targets, the future of energy generation will be spearheaded by new low carbon technologies, and new energy storage and distribution models coinciding with advancements in information and data analytics,” said Mark Stewart, director of the centre for infrastructure performance and reliability at The University of Newcastle in Australia.

Invested pipeline is dominated by wind and solar

Source: AEMO (2017i)) ASIAN POWER 29


COUNTRY REPORT 2: VIETNAM

Is Vietnam going in blind in its solar venture?

Vietnam goes gung-ho on solar development Small Vietnam just went big on improving its policies on solar projects, but analysts are skeptical if the regulatory changes are bringing more harm than good into the country’s solar industry.

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hen Vietnam released Circular 16 in September, it outlined the official template for the power purchase agreements (PPA) on solar projects effective until mid-2019, but alongside praise that the PPA will finally put an investment structure in the highpotential solar sector are criticisms that the risk burden has been tipped too much to the side of investors. The perceived inadequacies of the PPA template - that it has no take-or pay obligation is one of several grievous shortcomings cited by analysts - come not from a lack of advice. The Vietnamese government has been bombarded by suggestions on how

The PPA can be considered an attempt to test the waters – asking how much risk investors are willing to bear in return for a piece of the action.

Vietnam’s total intalled capacity by source (in MW)

Source: Solarplaza webinar

30 ASIAN POWER

to improve the PPA rules since April when a draft version was released, but officials were unwilling to yield ground. This raises questions on how the current PPA provisions viewed as deterrent to investment will test the patience of interested sponsors and hinder long-term solar development. “Having largely ignored recommendations provided, the final text does little to inspire confidence,” said Giles T. Cooper, partner at Duane Morris Vietnam, LLC. “The final PPA does not improve upon the main critical issues highlighted in April. Issues include a lack of measures to compensate producers for interruption in the ability to receive power, force majeure conditions, contract suspension, and settlement of disputes.” In recent months, Cooper was one of many experts that warned the Vietnamese government that its draft PPA, if not revised, would be considered unbankable by investors, many of whom are otherwise keen to start financing solar projects in the fast-growing, power-hungry nation. Vietnam is targeting to raise its share of renewable energy to around 10% of total energy production - and a third of that share from solar energy alone - but the resistance to PPA revisions sends mixed

signals to investors that the country that needs their funding will be playing hard ball. “The PPA can be considered an attempt to test the waters – asking how much risk investors are willing to bear in return for a piece of the action,” said Cooper. Significant investor risk As it stands, the investor risk remains significant. The PPA presents major concerns that investors will find hard to swallow: It has no take-or-pay obligation, no offshore arbitration, no sovereign guarantee or coverage of credit risk, and no provision addressing the risks of changes in applicable laws, said Rik Teeuwen, project manager of Solarplaza, a Netherlands-based firm that organises exploratory trade missions in Vietnam and other emerging markets. Of these concerns, the lack of take-orpay obligation is considered one of the most worrisome for investors. The PPA relieves Electricity of Vietnam Group (EVN), named as the sole purchaser of energy generated from solar power projects, from payment obligations even where it is unable to take power due to a breakdown of the transmission or distribution grid.


COUNTRY REPORT 2: VIETNAM Installed power capacity - current and projected

Oliver Massmann

Source: GIZ Energy Support Programme VN, PDP VII revised, March 2016

“Particularly problematic is the fact that the purchaser has the right to stop purchasing electricity in circumstances that are outside of the control of the seller, and without having to provide any compensation,” said Cooper. “This lack of payment protection in instances of force majeure shifts a large portion of risk onto investors. In general, and as per comparable agreements worldwide, the power producer is rarely required to take on such risks,” he warned. “Too much risk, and producers will look elsewhere.” A fair rate? David Harrison, partner at Mayer Brown JSM, reckoned that in an ideal PPA scenario for investors, if the purchaser cannot take power due to a breakdown of the transmission or distribution grid, minimum take-or-pay obligations should remain in place as long as the plant exists. For Harrison, the draft PPA template - which was unaltered to a great extent when the Vietnamese government released the final PPA template - resembles that of Vietnamese independent power producer wind power projects, as opposed to the more international standard, seller-friendly PPAs that are generally used on larger build-operate-transfer projects. “Whilst local onshore banks may be comfortable with this form of PPA, it will likely raise significant concerns on bankability with offshore financiers as well as international sponsors,” he said. Analysts were also disappointed that the final PPA kept the approved Feed-inTariff (FiT) rate of VND2,086 per kWh (US$0.0935 per kWh) for grid-connected projects, based on the VND/USD exchange rate. “Although this is a reasonable rate for the region, the proposal means that significant risk is shouldered by investors,” said Cooper. “Lacking an escalation clause, the PPA proposes no indexation

of the rate according to Consumer Price Index or inflation.”The omission of a security clause for potential cost increases will lower the confidence of investors to secure profits over the course of the solar projects. There was market expectation that the revisions to the draft solar PPA would address key concerns, but Fred Burke, partner at Baker & McKenzie (Vietnam) Ltd., said that in light of only “minor” improvements to the draft as well as the removal of specific provisions on lender’s step-in rights, investors might worry about the bankability of Vietnam solar projects. “Compared to the previous draft of this solar PPA, released in April 2017, Circular 16 removes specific provisions on lenders’ step-in-rights. In addition, most of the Ministry of Industry and Trade (MOIT) improvements to the previous draft are minor, leaving certain major issues unresolved, which may have an impact on the bankability of large utility-scale solar power plants on a ‘project finance’ basis.” He highlighted that the current version of model PPA does not specifically provide for offshore arbitration, which can further discourage international investors to enter Vietnam’s solar power sector. PPA workarounds Another red flag to bankability in the model PPA is its silence on lenders’ step-in-rights, specifically in relation to receiving notice of any default and additional period in which to cure such default by the seller in case of the seller’s failure to comply with the terms of the PPA or the financing arrangements. Burke said that the model PPA removes some of the basic provisions in relation to the these rights of lenders which were previously included in the draft PPA. In addition, the model PPA fails to include any provision on separate PPA direct agreements between EVN,

Giles T. Cooper

David Harrison

Van Hai Nguyen

Rainer Brohm

Rik Teeuwen

or the government, and the lenders. For investors that find the Vietnamese solar market irresistible, there are workarounds to the PPA, but these will entail a lot of effort and coordination. “Ultimately, although the PPA is ‘final’ on paper, the real trick is for investors to work hard and smart to agree adjustments on a projectto-project basis that re-align specific risks in acceptable ways,” said Cooper. Investors that can find a way forward despite the risk-heavy environment will find a country that is brimming with large development potential driven by a large demand for power, abundant solar resources and a predisposition to pursue solar power plants. Power development plan Rainer Brohm, an independent consultant on renewable energy in Vietnam, said electricity demand in the country increases annually by 10-11% and persistent droughts in certain times of the year have made it hard for coal power plants to sate the growing power demand. The government, in response, has put forward a power development plan that will quickly expand solar and other renewables in the coming decades. The plan targets the growth of renewable energy to 6.5% of total electricity production by 2020 (0.5% of which will be solar), to 6.9% by 2025 (1.6% solar), and to 10.7% by 2030 (3.3% solar). “To maintain its high rate of growth Vietnam will be looking for huge investment over the coming years. In order to do this, and keep to its international greenhouse gas commitments, the government has set its sights on some ambitious targets for solar power generation,” said Cooper. “Vietnam appears to be betting on gung ho enthusiasm to kick start solar power development rather than taking bold steps to deliver a stable backbone to the industry,” said Cooper. “It’s a gamble that may pay off in the short term but might also saddle the country with poorlyconceived and under-performing projects in the long term.

Solar PV: from <10MW (2015) to 12,000MW (2030)

Source: GIZ Energy Support Programme VN, Power Development PLan VII (March 2016)

ASIAN POWER 31


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Find out which companies emerged as the victors in the Asian Power Awards 2017

Certificates at the awards night in Conrad Bangkok

O

ver a hundred senior executives and prime industry figures flocked to the Conrad Bangkok on September 20 for the awards night in Thailand. The gala night featured 64 awards this year as nominations jumped to a record figure. The awards were judged by John Yeap, partner, head of energy – Asia at Pinsent Masons, and Mark Hutchinson, vice president, head of APAC gas & power consulting at Wood Mackenzie, Mike Thomas, partner at The Lantau Group, and John Goss, managing director of Ceejay AOD. Asian Power publisher Tim Charlton congratulated the awardees, saying “On behalf of the Asian Power team, we are humbled and again grateful for spending your time with us tonight. We are honored to turn the spotlight on 2017’s key players who bested others in a drive for efficiency, sustainability, and productivity in the power sector.” YTL Power International Berhad’s CEO Tan Sri Dr Francis Yeoh, who won 2017’s CEO of the Year award, said, “We are truly honoured to be here because we represent all the unsung heroes of the power industry: junior engineers, senior civil engineers, mechanical engineers, administrators, finance. Being in the power industry is not easy. To bring light to the nation is not easy. But we do it year after year, bringing light to every nation without any big noise, and these unsung heroes continue to make our lives improve. On behalf of all the people who help run the power industry, God bless them because they are wonderful unsung heroes.” ABB, whose solutions also received awards during the night, is proud to have received the recognitions. “These recognitions are proof of our commitment to provide cutting-edge solutions and services, combined with over 100 years of control technology innovation and deep domain expertise, underlined by our continued selection and on-time delivery for major power projects around the world,” said Kevin Kosisko, managing director of ABB’s Power Generation & Water business unit. In the first winning category – Fast Track Power Plant of the Year – ABB won for its retrofit of the excitation systems at the 630 MW PLTU Pacitan coal-fired power plant in Pacitan, East Java province in Indonesia. This plant is part of the 10,000 MW fast-track program launched by the Government of Indonesia a few years ago. Its 648MW Adani solar photovoltaic power plant in Kamuthi, Southern India, also won titles. 32 ASIAN POWER

YTL Power International Bhd Team and Attarat Power Company Team

Nurlistyo Hadi, Abdul Haris Tatang and Mochamad Ichsan of PT. PP (Persero) Tbk.

PetroWind Energy Inc. Team


2 0 1 7 Biomass Power Project of the Year

Hydro Power Project of the Year

• Gold - Pokhara Municipality Waste Project by Gold Rush Pvt. Ltd • Silver - Asia’s biggest biomass fuel change project of Yeongdong #1 by Korea South-East Power Co.

• Gold - On-Line Inflow and Water Level Forecasting Study for Techi Reservoir by Taiwan Power Company • Silver - Radhi Small Hydropower Project by Radhi Bidyut Company Limited Independent Power Producer of the Year

Coal Power Project of the Year • Gold - Hassyan Clean Coal Project (2400MW, Dubai, UAE) by ACWA Power • Silver - 2 x 277 MW Oil Shale Mine-Mouth Power Project at Attarat Um Ghudran, Hashemite Kingdom of Jordan by Attarat Power Company PSC, Jordan • Bronze - LinKou Power Plant Renewal Project by Taiwan Power Company Dual Fuel Power Plant of the Year • Gold - Paluan Hybrid Solar Farm by Solar Philippines​ • Silver - Ghorasal 450 MW Unit 7 in Bangladesh “automated by ABB Ability™ Symphony® Plus a solution by ABB Power Generation & Water” Environmental Upgrade of the Year • China - Central Heating Extension Project of Guangzhou China Resources Thermal Power Plant by China Resources Power Holdings Company Limited • India - Minimization of loss in calorific value of Coal during the process of storage and handling by Odisha Power Generation Corporation Ltd. • Indonesia - Controlling the Spread of Water Hyacinth Based on Energy Utilization and Economic Empowerment of Local Communities in the Cirata Reservoir Area by PT Pembangkitan Jawa-Bali • Mongolia - Tsetsii Wind Farm Project by Clean Energy Asia LLC • Nepal - Pokhara Municipality Waste Project by Gold Rush Pvt. Ltd • Philippines - 36 MW Nabas -1 Wind Power Project by PetroWind Energy Inc. • Korea - Hadong Thermal Power Plant, Korea Southern Power Co., Ltd (KOSPO) by Emerson Fast-Track Power Plant of the Year • Gold - PT. PLN (Persero) PLTU 1 Jatim-Pacitan (2x315MW) Coal Fired Power Plant in Indonesia retrofit project a solution by ABB Power Generation & Water • Silver - Multiple Site Mobile Power Plant 500 MW by PT. PP (Persero) Tbk. • Bronze - Acceleration of Paiton Generation Unit Operator Excellent (OPEXC) by PT Pembangkitan Jawa-Bali Gas Power Project of the Year • Gold - Shenhua-Guohua (Beijing) GasFired Cogeneration Co., Ltd by Emerson • Silver - Musandam Independent Power Plant by WÄRTSILÄ • Bronze - Zarqa IPP (485MW, CCGT, Jordan) by ACWA Power

• China - China resources Power Holdings Company United • India - 2 x 700 MW Rajpura Thermal Power Plant by Nabha Power Limited • Indonesia - Cirebon Coal Fired Power Plant 1x660MW Super-critical Technology by PT Cirebon Electric Power • Mongolia -Tsetsii Wind Farm Project by Clean Energy Asia LLC • Philippines - Solar Philippines • Saudi Arabia - ACWA Power • Sri Lanka - Sojitz Kelanitissa (Pvt) Ltd, Sri Lanka Information Technology Project of the Year • Gold - Inventory Optimization through Electronic Supply Chain (E-SCM) Management by AES Philippines • SILVER - Technology adoption in Power Distribution Business for maintenance optimisation by Reliance Infrastructure Limited • BRONZE - The Development of Taipower’s Real-Time, Black Start Decision Support System by Taiwan Power Company Innovative Power Technology of the Year • China – SDIC Qinzhou Power Generation Co., Ltd. 1000MW Coal-Fired UltraSupercritical Units’ APS by Emerson • India - Reduction of energy consumption of Budge Budge Generating Station’s boiler feed pumps by CESC Limited • Korea - Shinincheon Combined Cycle Power Plant by KOSPO • Malaysia - 2 x 277 MW Oil Shale MineMouth Power Project at Attarat Um Ghudran, Hashemite Kingdom of Jordan by Attarat Power Company PSC, Jordan • Philippines - Masinloc Battery Energy Storage (BES) by AES Philippines • Mongolia - Tsetsii Wind Farm Project by Clean Energy Asia LLC • Sri Lanka - Yugadanavi 300 MW Combined Cycle Power Plant by Lakdhanavi Limited Nuclear Power Project of the Year • gold - The Modification of Kuosheng Nuclear Power Plant’s (KSNPP) Cask Loading Pool (CLP) for the Storing of Spent Fuel” by Taiwan Power Company

the GT10 MAO in 2016 by Zhengzhou Gas Power Generation Co., Ltd • bronze - Comprehensive Reconstruction Project of China Resources Power (Tongshan) Co., Ltd. by China Resources Power Holdings Company Limited Power Utility of the Year • China - China Resources Power Holdings Company Limited • India - GMR Chhattisgarh • Indonesia - PT Pembangkitan Jawa-Bali • Jordan - ACWA Power • Korea - Shin Boryeong TPP #1 - Korea’s 1st 1,000MW-Class USC Coal-Fired Power Plant by Korea Midland Power CO.,LTD • Sri Lanka - Yugadanavi 300 MW Combined Cycle Power Plant by Lakdhanavi Limited • UAE - Abu Dhabi Transmission and Dispatch Company Smart Grid Project of the Year • gold - Meralco Prepaid Electricity Service by MERALCO • silver - Tsetsii Wind Farm Project by Clean Energy Asia LLC • Bronze - Raja Ampat Solar Power Smart Grid by PT Selaras Daya Utama and PT INTI (Persero) Solar Power Project of the Year • gold - 150​ ​MW ​Concepcion ​Solar Farm​ by Solar Philippines • silver - 648 MW Kamuthi Solar PV Power Plant in India “automated by ABB Ability™ Symphony® Plus a solution by ABB Power Generation & Water” • Bronze - 132.5‐megawatt (MW) Solar Cadiz Project by Equis Transmission & Distribution Project of the Year • Gold - Hong Kong-Zhuhai- Macao Bridge Substation by CLP Power Hong Kong Limited • Silver - New Thoughts on the Restructuring of Taipower’s LungChi E/S by Taiwan Power Company Wind Power Project of the Year • Gold - Ningxia Haiyuan Xihua Mountain Wind Power Project by China Resources Power Holdings Company Limited • Silver - Aspari Wind Farm by Mytrah Energy • Bronze - Phu Lac Wind Farm Project - Phase 1 by Thuan Binh Wind Power Joint Stock Company CEO of the Year • Tan Sri Dr Francis Yeoh Sock Ping of YTL Power International Berhad

Power Plant Upgrade of the Year • gold - Six Sigma Process Optimization Project of Masinloc Power Plant by AES Philippines • silver - Magnificent upgrades during

ASIAN POWER 33


2 0 1 7

Representatives from China Resources Power Holdings Company Limited

Mangesh Nawarange from ABB

DoHee Won and Winyu Wongsangiem of Emerson with ByeongWoo So of KOSPO

Mater AL-Enazy, Tau Nguyen and Ali Ayub of ACWA Power

Tan Sri (Dr) Francis Yeoh Sock Ping of YTL Power International Bhd

Kim Woo Gon of KOSPO

Kaushik Chaudhuri of CESC Limited

Representatives from Thuan Binh Wind Power Joint Stock Company

Ryan Relato, Leandro Antonio Leviste, Anthony Watanabe of Solar Philippines 34 ASIAN POWER

Hyun Ho Kil of Korea South-East Power Co.

PT Selaras Daya UtamaTeam


2 0 1 7

Joseph Tan of Attarat Power

Zhao Xiaohong of Zhengzhou Gas Power Generation Co., Ltd

Sudhakar Swain and Ramesh Chandra Panda of Odisha Power Generation Corporation

Dishan Samarasinghe and Kithsiri Egodawatta of Lakdhanavi Limited

Representatives from KOMIPO

Arras Yuk Yin Yeung, Chi Leung Mak and Chitkrongtam Natthidet of CLP Power Hong

Zain Alabdeen Al Jefri, Dr. Salem Al Harthi and Ehtisham-Ud-Din Iftikhar-Ud-Din of Abu Dhabi Transmission and Dispatch Company

Representatives from PT Pembangkitan Jawa-Bali

AES Philippines Team

Yu-Chun Tseng and Hsin-Pin Tseng of Taiwan Power Company

Representatives from WÄRTSILÄ ASIAN POWER 35


EVENT COVERAGE: POWER-GEN ASIA 2017 of the international power generation industry players. The official launch of Asia Power Week 2017 took place at the Opening Keynote session, enjoyed by more than 400 attendees. Speeches and presentations were provided by General Surasak Srisak, Vice Minister for Energy, Ministry of Energy; Mr. Saharath Boonpotipukdee, Deputy Governor, Renewable and New Energy, Electricity Generating Authority of Thailand; Mr. Kenji Ando, President and CEO, Mitsubishi Hitachi Power Systems, Ltd.; and Mr. Heru Dewanto, President Director, PT. Cirebon Energi Prasarana, Indonesia.

Asia Power Week beat attendance record

Asia’s power utilities play catch up on digitalisation Industry players say that the Asian energy sector is undergoing revolution, but will they be able to keep pace with rapid digitalisation amongst utilities?

D

igitalisation is amongst the buzz words in the power generation industry today, and a lot of companies still have a lot to catch up on. 75% of power generation companies are looking into investing in the Internet of Things, according to LNS Research. In fact, big data analytics has surpassed the smart grid in planned investments. Two thirds of the industry have moved from traditional hierarchical systems and whilst there are a number of companies who still embrace that architecture, most of them are already looking into making the shift. According to Matthew Littlefield, president and principal analyst, LNS Research, 60% of industrial companies will have a digital transformation initiative in place by the end of 2017. He explained in a briefing at the Asia Power Week that much of the hype comes from the concept of the Fourth Industrial Revolution. “We have had three previous revolutions, none of them was completed in a year, or five years even. They took many decades to complete,” he said. But what is the stage of digital adoption in the power generation today? Longer term, new data architecture and advanced analytics—artificial intelligence and machine learning—will provide opportunities for new business models. Littlefield said that the biggest challenge to date facing digital transformation in the power generation industry is not technical, it is business-related. “Much of this comes from the fact that the 36 ASIAN POWER

We have had three previous revolutions, none of them was completed in a year, or five years even. They took many decades to complete.

promise of digital transformation lies in the unknown. It is built on the idea that with more data and better analytics, companies will find previously unknown relationships--driving better business performance, all of which is very hard to quantify.” This was just amongst the numerous hot industry topics discussed at the Asia Power Week Conference and Exhibition, comprising of POWER‐GEN Asia and Renewable Energy World Asia. The event took place on 19‐21 September 2017 at BITEC, Bangkok and attracted over 8,500 industry professionals from more than 75 countries. For the 3rd year in succession, Asia Power Week beat its registered attendance record, a clear indication that Asia continues to attract the attention

Over 8,500 industry professionals locked to the event

Hitting ambitious goals General Surasak Srisak, vice minister for Energy, Ministry of Energy in his keynote speech said, “Ministry of Energy Thailand leads the Alternative Energy Development Plan 2015‐2036 which aims to reduce the country’s dependence on imported energy, double the renewable energy production capacity or increase it to 30% of total energy production in 2036 and cut the greenhouse gas emission by 25%. The achievement of these ambitious goals means the related parties have to double their capacities. It is significantly necessary for all sectors to join force in order to make this national effort a success. Heather Johnstone, event director for Asia, PennWell Corporation concluded, “We are very proud of the great succeeded that Asia Power Week has successed in for our 25th anniversary edition, where we once again attracted more than 8,000 attendees from all over the world over 3 busy days. What’s more delighting is the continuation of our long‐established cooperation with Thailand’s Ministry of Energy, and the valuable and appreciated support from Thai authorities and leading private companies.” The next Asia Power Week will take place on 18‐20 September 2018, at ICE, BSD City, Jakarta, Indonesia.


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vendor view: INDUSTRY TRENDS AFFECTING UTILITIES tapping on technology. They will need to tap on innovations like 3D modelling and simulation to better plan projects to cut down on costly outages and shutdowns,” he said. Konno added that utility companies should take advantage of modern connectivity to share business critical information in real-time across their multi-disciplinary teams, which then enables them to make better informed decisions.

Connectivity and digitalisation are now taking over the industry

These are the power utility trends to watch out for in 2018 Electricity trading via the Internet, 3D modeling, and utility-scale solar-plus-storage solutions are about to disrupt the industry.

W

hen Conergy built the Lakeland Solar and Storage project in Australia, one of the largest grid-connected utility-scale solar and storage plants in Asia Pacific, it served as a showcase to the world how utilities can make the big shift towards a reliable clean energy business model. Industry-disruptive technologies like solar storage, as well as electricity trading and 3D modeling, are transforming the value chains of power utilities that for a long time have been structured around the traditional commodity-based model. “With the availability of utility-scale solar-plus-storage solutions, energy can be stored and used at a later time, intermittency is smoothened out, providing a dependable and stable power supply that is capable of dispatching energy 24/7. The implications of this concept, of solar as a baseload solution are tremendous and even disruptive,” said Alexander Lenz, CEO of Conergy. “Not only can solar now replace some traditional baseload technologies but with the supply of more predictable and dependable energy blocks during the day and night, solar energy has now become an even more tradeable asset, allowing solar investors to achieve a premium in energy markets for their power output and increasing their returns,” he added. Lenz recounted that storage systems have come a long way. Previously, these were limited to small households in undeveloped areas, where batteries served to increase the reliability of small 38 ASIAN POWER

The most important trend that we find impact our business today is Internet of Energy which will greatly change the way the world consumes energy.

solar systems. But recent advances in solar-plus-storage systems are bringing exciting new options for utilities, especially in making solar energy more reliable and accessible in a region where energy demand is expected to climb 2.1% annually. “Innovations in power-sector technology, such as new storage battery options and smart-phone based thermostat apps, are advancing at a pace that has surprised developers and adopters alike,” said Tom Flaherty, advisor at Strategy&, PwC’s strategy consulting group. Stiffening competition, rising environmental regulations, and ballooning operational and resource costs have been instrumental in pushing power utilities towards diversification of their technology choices, reckoned Masaki Sox Konno, managing director, Asia Pacific at South Dassault Systemes. “Utility companies will need to operate efficiently and run on lean resources

Connectivity in energy The importance of connectivity in shaping the energy sector cannot be underestimated, said Bundit Sapianchai, president of BPCG Public Company Limited, which is developing a pilot online trading platform to be used in a rooftop solar-powered community. “The most important trend that we find impact our business today is Internet of Energy which will greatly change the way the world consumes energy. The increasing interconnectivity and possibility to generate electricity from renewable energy at a small scale means that anybody can become a producer,” he said. “We recognise that electricity trading via the Internet trading system will certainly happen,” he added. “It’s just a matter of time that electricity will become a branded product - when it will be part of a daily lifestyle of consumers with online sales platforms.” Strategy&’s Flaherty said amidst this torrent of emerging technologies and shifting customer attitudes towards smarter energy consumption, utilities will need to move beyond the old commodity-based model that focused on cost-effective supply acquisition, modernisation of industrial process equipment and total bill reduction. “Cost management and basic service will still be important, but they will no longer be central,” he said. “Power utilities will now need to provide alternative generation sources, energy storage, equipment replacement, sensorbased energy monitoring systems, facilities management services, and the infrastructure to back it all up.”

Asia Pacific advanced metering infrastructure market size (USD million)

Source: Frost and Sullivan


OPINION

Edward McCartin The place for renewable subsidies in the Philippines

A

few months ago, I was on a panel in Manila. There were two experienced local developers and two regional advisory types. The question was how the Philippines’ fuel mix would develop. The local developers, who were keen on renewables, were adamant that the government tell us what to build and where, and even more how much the government would pay for renewable energy, or development would be stuck. The advisory types asked why the government would give such direction or tariffs where the idea was for the market to set the prices and give the incentives to proceed based on logical market pricing and reliable supply. FIT arrangements Each side looked at the other like lobsters were crawling from their ears. The reason was the Philippines had, in the 10 years since the WESM kicked off, developed into two disparate markets: big base load generators selling at market; and

renewables projects dependent on government subsidies for viability. The FIT arrangements in the Philippines followed the seeming success in Thailand. Both nations are light on domestic fossil resources so moving into renewables made sense in long term planning. High tariffs, more investors? High tariffs lured investors to build the first projects so that concept was proven and then prices could come down to a market price. Except that solar and wind power don’t work like coal. You get them when they are there. Solar availability of 20% in the Philippines is awesome which means there needs to be massive amounts of other power resources to fill the gap when the sun is down. A 200MW solar power plant generates about 865MWh net per day. A 200MW coal-fired power plant would generate about 3900MW net per day. Capital cost for both is $1.2-$1.5MM/

Pramod jain & ARUN RAMAMURTHY

Pros and cons of IoT in the power sector

I

nternet of Things (IoT) is billed as the next industrialrevolution,Industry4.0.Theconcept of IoT can be encapsulated as the capability to sense the environment with multitude of sensors, process all the data, make intelligent decisions and act in real time. At a high level there are three use-cases of IoT in the power sector: a) operational optimisation resulting in improved economics and reduced carbon emissions, b) asset performance management (APM) for higher reliability and lower cost of maintenance, and c) customer engagement with the objective of lowering cost, and supporting local production, storage and usage of electricity. Thus far, it has been a paradigm of internet of people (IoP)—the internet has been primarily used by people to exchange information, and then to take action and make decisions. What if the internet were used by machines and devices to exchange information and then take action and make decisions, without direct 40 ASIAN POWER

supervision of people? This internet of things (IoT) paradigm promises to take network of machines and devices along with smart algorithms to create the next industrial revolution, akin to the business revolution that was created by IoP. In its simplest form, IoT has three components: digitisation of assets, collection of data about the assets, and computational algorithms to control the system formed by the interconnected assets. Although there is a lot of hype around IoT, the power sector has been the beneficiary of two recognisable early consumer-oriented applications of IoT: Smart meters and smart thermostats. Smart is the new in In Asia, several pilots of smart meters, smart buildings and smart city are ongoing. Smart thermostats and smart meters in conjunction with other IoT solutions have the potential to spur a variety of smart buildings and smart city applications. More recently, IoT solutions are entering the domain of industrial operations. In

MW of installed capacity; O&M advantage goes to solar; but land cost advantage goes to coal. At the same 5PHP/kWh tariff, solar makes $86,500 of gross revenue a day and coal $390,000 a day. The delta is fuel, profit and a bit of tax. So, at what time does the fuel price make the cost to generate the same? Electrons are the same. So what justifies charging the Philippine people 9PHP for solar power electrons if we can get coal electrons for half that cost. Solar’s value So back to the panel. The view on the renewables side was that there is an inherent value to solar. The constant din reverberates that capital costs will come down because they have to date, but how much more? Panels, brackets and inverters are being manufactured at a loss in numerous factories in China that themselves are tanking. So why assume the costs must keep coming down when in the rest of the world costs go up. But more, what’s the point of having a competitive market to get prices to reflect the economic cost of power generation where we are just going to throw that to the four winds because the sun is free? Edward McCartin has been working in the power generation space for the last 20 years working on every continent other than Antarctica, but focusing on SE Asia. He has worked on renewables projects for most of that 20 years including geothermal, solar, waste to energy and hydro, as well as on coal and gas projects. the power sector, the most popular application in this category is APM—condition monitoring and predictive maintenance of a wide variety of assets. The IoT-based approach transitions from traditional reactive and periodic maintenance strategies to proactive strategies. Applications in generation plants The applications are focused on the highest value assets in generation plants, and in the transmission and distribution grid. In this application, assets are continuously monitored with sensors, the collected data is sent to the cloud where a variety of machine learning and artificial intelligence algorithms are used to a) predict the health and impending failure of the assets, and b) determine the optimal time to perform maintenance. In Asia many grids are plagued with unreliable service. This is primarily because of aging equipment and poor maintenance. Investment in IoT for both existing and new equipment has the potential to significantly reduce unscheduled downtime by identifying problems before they occur, thereby improving reliability and reducing costs. Another application of IoT is optimal use of generation assets to increase the efficiency of production. In new gas and coal power plants, GE claims its digital technologies can increase fuel efficiency by 3%, power output by 2%, and reduce unplanned downtime by 5%, O&M costs by 25% and fuel consumption during starts by 20%. In Asia, these strategies may be used to reduce cost and emissions.


2018

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OPINION

W

ecertainlynowcoverthewaterfront. The Independent Power Producers Forum (IPPF)’s “63” Functional Committees and Focus Groups include every possible aspect of the exponentially expanding diversitites of the constantly evolving energy and power game. This is the first of a series of essays, editorials and industry updates drawn from the experience and expertise of the IPPFs’ over 350 individual members within the organisation’s forty member firms. We list below five game changing subjects most of which will be dealt with in future articles from our IPPF members and colleagues in greater detail what follows is a sampler. Inquiries and comments are very much desired and must be sent to info@ ippfpowerasia.com IoT / AI / Blockchain / Cloud Energy and beyond First on the list is the tidal wave of I.T. convergence with energy and power. IBM makes a big deal about “managing complexities” via the Internet of Things. This of course begs the question of where are all the I.T. informed new energy people going to come from? Finding the right people at the right time Traditional headhunters really have no clue as to what they should be looking for on behalf of energy/power clients struggling to stay ahead of the game. The IPPF has just added a new Focus Group/Committee ( “HR / Recruiting”) that would focus on this subject.

I

decided to stop my recipes on PV projects this month. We all seem to enjoy seeing more and more of programmes about cooking on TV, but we should also have some change to it. I would like to go back to a topic that I have addressed in one of my earlier articles: PV rooftops. Utilities are particularly worried with the rooftops and specially when no subsidies are involved as it is the case right now in most countries. Utilities fear the cannibalisation of their revenues and in particular for most of the Asian countries (and not only in Asia) that the slice of the paying consumers better-off will be the ones interested in installing PV rooftops due to expensive electricity bills. This happens mostly due to cross subsidies and without actually removing them, the problem is not on PV rooftops, but on the structure of subsidies. Let us look at 3 reasons why PV rooftops are a good opportunity for utilities. On-grid support Reason 1: PV rooftops only work with on-grid support as off-grid or fully autonomous systems are much more expensive. That means that the legacy of the transmission and the grid has a value and so any household will need grid support and that has a value. Customers will not go away. The legacy network in the utilities is one that will also not go away or be replaced by optical fibers as it was the case of the telecommunication, where the ubiquitous copper wire bode farewell when the optical fibres penetrated the last mile or even wireless came up. Electricity will be on cables and 42 ASIAN POWER

Joel Laykin

Game changers in the power industry Keep up with the changes Once the right people are in the right slot the next big challenge is to be sure that they remain “up to snuff”. Constant re-education, training and technical updates have to be produced, then distributed in a manner to make maximum impact with targeted executives and operational staff. An IPPF member, Fintrade-Mercer, has a solution in partnership with the Mobie Group (Finland). They offer “next generation training software for energy and power and related sectors with just-in-time training and operating manuals in a media-rich interactive format. Follow the Yellow Brick Road So much has been written and yammered on about OBOE (AKA-BRI), its reasons, impact and objectives. At the recent, PGA 2017 in Bangkok (September 19th – 21st), Colin Tam (IPPF Chairman) led a panel of six experts on the subject. One such expert, Prof. William Hickey, has just published a book on the subject. “Energy and

HDR in Developing Countries: Towards Effective Localization” (or “All you want to know but have been afraid to ask on how to get big bucks out of China”. It is “new kind of multilateralism” by Xi Jin Ping, a cornucopia of investments into infrastructure, ports, energy, power and its distribution, airports, schools, whatever. BRI will further cement China’s global leadership position. Read Hickey’s book. https://www.amazon.com/ Energy-Resource-Development-DevelopingCountries/dp/1137576308 More on this with a subheading “be careful what you wish for” in a future article from the IPPF. The resurrection of carbon About half a decade ago, China’s National Development and Reform Commission began rumbling about “carbon” as a way of “producing alternate revenue streams for its emerging renewable energy players, many of whom were having a very tough time.

Agostinho Miguel Garcia

3 reasons why PV rooftops should not worry utilities

having it without cables is a nightmare of radiation and health issues that obliterate the discussion on mobile 4G effects. So, bank on your legacy for the service that makes a solar rooftop work. Investing into new transmission lines Reason 2: PV rooftops will avoid utilities having to invest into new transmission lines or even upgrade your network. If you have generation at the end of your distribution network, why should you be bothered to increase the capacity of your backbone? That saves you money, trouble and time also. Rights of way (ROW) in cities are a nightmare for anyone who has been involved in doing it. Now imagine going for larger towers, lower sagging of lines when the previous setup was already an issue! So, maintain the grid, let the consumers do the generation and make sure that you provide them with the service they are looking for: grid, reliability and back-up power supply. Reason 3: PV rooftops may be cheaper than your grid based electricity. The utilities must understand

the opportunity of buying cheaper power and reselling it to other customers. That can be done through solar or green tariffs, which can even go for a premium. If solar is more expensive than the grid, no PV rooftops will work unless subsidies are provided. That covers the utilities in the first instance, but is usually followed by the downside effect leading to a stagnation in the market. It is also the point where utilities must also embrace the age of the platforms. Consumers will buy and sell power through the utility platform (and if utilities do not get this, another UBER will surface). An owner of a flat in the centre of a city will have no chance of having a PV rooftop enough for its consumption, so that is where bigger rooftop owners come into the picture, more likely not in the centre of the city, but around it. The same person in an office may be selling power to the building where that same person is working. For that you need a platform and the wiring. Utilities have the latter and usually all paid for already.


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