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ISSUE 87 | DISPLAY TO 30 JUNE 2018 | www.asian-power.com | A Charlton Media Group publication

US$360P.A.

POSCO ENERGY TURNS TO FLOATING PV PRESIDENT & CEO PARK KI-HONG REVEALS THE UTILITY’S REALIGNED FOCUS ON DEVELOPING REGIONAL FLOATING AND UTILITY-SCALE PV PROJECTS

THE BIG CHASE FOR INCENTIVES WHEN PRIVATISATION CALLS, SHOULD UTILITIES LISTEN? THAILAND SOLAR’S SUNNY PROSPECTS AND HAZY RISKS THERMAL PROJECTS FIND HOT SPOT IN MALAYSIA


FROM THE EDITOR The first half of the year is about to close, and the Asian Power team has been busy talking to industry experts and gathering them in the Asian Power Utility Forums held in Jakarta and Kuala Lumpur.

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

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Almost nine million families in Indonesia still lurk in the dark with no access to electricity, despite rapid economic and population growth in the world’s largest archipelago. In fact, the country has already lagged behind its 35GW target of new installations for 2019, pushing back hopes that 4,000 islands will soon be rescued from a widespread electricity crisis. Find out what our speakers revealed on page 22. Over to Kuala Lumpur, the country’s increasingly complex power sector and growing power demands combined with a robust economy have made it difficult for energy providers and stakeholders to come to an agreement on the right steps forward. Learn more about the discussion on page 26. We are also proud to bring you an exclusive interview with the newly appointed CEO of South Korea’s largest private energy provider, POSCO Energy. Find out what CEO Park Ki-Hong revealed in the interview at page 13. Start flipping the pages and enjoy!

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ASIAN POWER 1


CONTENTs

INterview 12 CEO POSCO Energy turns to floating PV projects

07 Is Asia ready for energy storage?

18 Sharply falling costs sweep the Asian wind power industry

08 Pushing the nuclear dream 10 Should utilities turn to blockchain?

26

ASIAN POWER UTILITY FORUM: Kuala Lumpur High time to rethink Malaysia’s energy mix

SECTOR REPORT

FIRST 06 Chasing renewable project incentives

22

ASIAN POWER UTILITY FORUM: Jakarta Indonesia struggles to address power woes

off its feet

OPINION 30 A guide to Singapore’s recently announced Carbon Tax 30 What is the future of power sector, renewables,

COUNTRY REPORT 14 The sunny prospects and hazy risks of Thailand’s next

stage of solar growth

energy storage, and IoT?

32 Solar power development in Southeast Asia 32 Back to the future? – A shakeup in industrial solar

16 Is the Philippines ripe for energy storage?

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

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

Why Indonesia is popping the champagne on less headwinds for renewables

POWER UTILITY

ReNew Power targets buying 5 renewable power companies The companies have a combined capacity of around 680MW. ReNew Power, the largest independent power producer, is set to acquire five companies in the renewable power space — solar and wind — that have a combined capacity of about 680 MW for about Rs 6,000 crore, said two people familiar with the development.

POWER UTILITY

Thailand’s BCPG eyes US$300m expansion to hit over 700MW capacity CEO Bundit Sapianchai revealed that the company targets to expand its generating capacity above 700MW. It expects to reach this figure by end-2018 as it new wind, solar, and geothermal projects will be coming online in Thailand and Japan.

4 ASIAN POWER

REGULATION

India unveils wind-solar hybrid policy India’s Ministry of New & Renewable Energy has released its National Wind-Solar Hybrid Policy that seeks to encourage hybridisation of projects. The first draft was issued in June 2016 and after consultation with stakeholders, the policy was made public. The policy stipulates that for a project to be classified as hybrid, the rated power capacity of one source must be at least 25% of the other.

POWER UTILITY

Falling costs push solar’s lead in India’s electricity transition India installed a record 10GW of solar electricity capacity in fiscal year 20172018, twice the rate logged in the previous year, and nearly double the country’s entire solar base. The gains put India at 22GW of total cumulative capacity, and the trend is continuing.

POWER UTILITY

Tata Power eyes $5b investment in renewables It is targeting to inject as much as $5b to push its renewable energy capacity four-fold to 12,000MW by 2028. According to CEO Praveer Sinha, this would entail an investment of as much as $594,000 per MW. He added that the bulk of their targeted increase will come from solar: both utility-level large-scale projects and residential and commercial rooftops.

POWER UTILITY

Australia’s power capacity predicted to hit 88.5GW by 2027 Power capacity in Australia will register stable growth throughout the 10-year forecast period, reaching 88.5GW by 2027, driven primarily by the country’s renewables expansion. The relatively subdued growth is due to the mature nature of the industry.


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FIRST x UNRIPE REGULATIONS SOUTHEAST ASIA

Bree Miechel, Reed Smith Dr Bikal Kumarpartner, Pokharel, Wood Mackenzie

Asx., the region’s energy needs continue to rise at great pace (ASEAN nations are projected to see their energy needs grow 80% to 2040), several nations are gearing up for increased solar investment. However, they are each taking a unique path. Whilst the region has the support of ASEAN, there is a clear need for alignment of regulation across the nations for a successful future of solar in Southeast Asia. Asian Power caught up with Bree Miechel, partner at Reed Smith, who specialises in advising sponsors, lenders, government authorities, and contractors on conventional and renewable power. What is the current status of regulations across Southeast Asia when it comes to solar power projects? Regulatory developments have generally been disappointing for foreign investors relying on international commercial banks for funding. Bankability concerns with the form of Vietnamese PPA have held back investment. The Philippines FIT programme providing no certainty as to tariff prior to an investment decision held back foreign investment. Regulatory change in Indonesia has held back investment and the restricted tariff (to the level of the average national tariff or 85% of the regional tariff, if lower) will continue to do so. Which countries must improve regulations? Thailand and Malaysia have had successful regulatory/procurement programmes for developing solar at scale. Cambodia’s regulatory environment is also conducive to investment but this is a smaller market. Notwithstanding my comments in above, Vietnam is seeing quite an inflow of investment ahead of the June 2019 deadline for its 9.35 US cents/kilowatt hour solar PV Feed-in-Tariff. This investment is coming from parties with access to funds not constrained by the bankability concerns. InfraCo Asia and Sunseap International are developing one of Vietnam’s first utility scale solar PV projects, a 168MW plant in Ninh Thuan province. InfraCo has a special mandate to make marginally viable projects commercial and encourage private sector development. Another investor I am in touch with out of New York is developing a 40MW solar PV project but looking to local lenders for debt. Similarly regional investors (Thai and Indian groups) without the same bankability constraints of other international investors are developing solar projects in Vietnam. Due to the challenging regulatory environment in South East Asia the markets my clients are focused on for new opportunities at present are Taiwan and Australia.

6 ASIAN POWER

Are incentives working their charm?

Chasing renewable project incentives

W

ASEAN

hen ASEAN countries ask which single renewable energy, or RE, incentive will prove most beneficial to their development plans, the question itself could be flawed as the region has seen the most effective results not from a single bullet solution but from a basket of measures. Countries with a combination of incentives have experienced the greatest growth in renewable power, said Supawan Saelim, renewable energy policy specialist at USAID Clean Power Asia. “FiT have been the key incentive, usually combined with soft loans and tax incentives,” said Saelim, but so far, only three ASEAN countries — Indonesia, Malaysia and Thailand — offer this optimal trio of incentives for grid-connected RE power. The Philippines and Vietnam have FiT and tax incentives in place, but do not provide lower-interest-rate loans. Myanmar, Singapore, Cambodia and Lao PDR only provide tax incentives. Meanwhile, Brunei has none of the three. Is combination the key? Whilst a combination of incentives can significantly accelerate RE development, Melati Wulandari, technical officer, ASEAN-German energy programme at ASEAN Centre for Energy noted that policy measures that target the

Supawan Saelim

reduction of capital and operating costs can lead to lower RE costs, which then creates a similar enabling effect for the sector. Wulandari said the two policies that lead to the lowest RE cost, citing the levelised cost of electricity of selected renewable technologies in ASEAN. First, reducing ROE at 12% brings the RE cost to US$0.1626/kWh from the current US$0.187/kWh with baseline parameters. The second is lowering the interest rate at 3%, which brings the RE cost down to US$0.1637/kWh. Two other policies that bring down the RE cost are increasing the debt share to 80%, which results in a US$0.1671/ kWh cost, and removing duties and taxes, which reduces it to US$0.17/kWh. Meanwhile, policies such as 5-year income tax holidays and longer 10-year loan terms will not lower the RE cost. Finally, a lower corporate tax of 18% actually raises the RE cost to US$0.1909/ kWh. With incentives and policies showing a palpable positive effect in RE development, ASEAN countries are striking a balance between finetuning existing initiatives and new ones. The Philippines, for example, is in the process of rolling out Renewable Portfolio Standards, the Green Energy Option Program, and net metering alongside FiTs and fiscal incentives, said Marissa P. Cerezo, assistant director at the Renewable Energy Management Bureau. The country is looking to finalise the implementing rules on Renewable Portfolio Standards, or RPS, that creates a mandated minimum percentage of RE generation. Regional public consultations were completed in 2017, and a draft has been endorsed to the Department of Energy for consideration. Another key policy in the pipeline is the Green Energy Option Program, which creates open access enabling end users to choose to purchase electricity from RE facilities. This, too, has finished nationwide public consultations and has been endorsed to the energy department.

Where are the incentives?

Source: ADB


FIRST clear exactly where storage fits. If it can be considered as a generator, then that has different implications. “And that is important for storage because the inherent technology provides benefits both to generators and to network operators,” Gardner added. Paul Gardner

Funding and site availability drag development

Is Asia ready for energy storage?

I

asia

f the energy transition outlook by DNV GL proves true, then almost three-fourths of the electricity demand increase by 2050 will be generated by renewables. But with this expected jump in renewables generation comes a dilemma: How will power grids deal with the variability and intermittency of sources such as wind and PV? Advanced storage technologies should be able to offer substantial solutions, but will not provide the full remedy, said Paul Gardner, segment director - Storage at DNV GL. “Storage is useful for that but it is not essential,” he said. “And on its own it is probably not sufficient to deal with the issues of high variability of, particularly wind and PV.”

Where storage technologies shine is addressing niche needs based on how long power wants to be stored. Thermal storage, in particular, is a very economical solution for situations when the end use is also heat, said Gardner, and will prove attractive to power grids that want, to a more convincing reason, to build expensive storage facilities. Aside from the cost hurdles, regulatory impediments are also slowing down adoption of storage technologies and, in effect, hamper renewables integration. Gardner pointed out that in some countries, there have been “significant” delays in the ability to implement storage because of a lack of a common definition of what storage actually is. In licenced environments, it is not

No clear-cut lines Factoring in the current high costs and regulatory roadblocks that energy storage still has to overcome, Gardner reckoned that the issue of renewables integration will likely be best addressed by other solutions. The limitations of storage in this regard is put fully on display when one considers creating larger-scale energy systems supplied completely by wind and PV in northern latitudes where there is greater seasonality. “If you wanted to have a 100% renewable system to supply that, you would end up building capacity that you would only use once in a blue moon, once every ten years in a really unfortunate set of situations. Now, you could do it, but it is a bit silly to build something very expensive that you are only going to use rarely,” said Gardner.

PV energy storage installation by application

Source: IHS

the chartist: Why JAPAN’S thermal SOLAR projects INDUSTRY are IS DIMMER getting WITH hotJUST in Malaysia’s 20GW PROJECTED powerTO pipeline COME ONLINE The Japan’ vast s solar majority power of Malaysia’ sector will s ongoing expand at and robust planned ratespower-sector through to 2020 investments as a largeare Share of gas in total energy-related emissions x inbacklog conventional of projects thermal supported sourcesby . This feedis of air pollutants and Co2 perhaps in tariffsunsurprising come online.given Afterthat 2020, theBMI country has Research substantial said that oil and thenatural transition gas to reserves, a according reverse auctions to BMI Research. system will slow growth, as the BMI Japanese Research government reports that,78% looks toof regulate the capacity 12,300MW additions of capacity in orderintoplanning reduce subsidy or construction costs and support stagesgrid arestability. conventional thermal power “Weplants; expecttogether, Japan to these register projects robust solar account capacityfor growth more through than a whoppingUS$8.2b to 2020 as a result inofvalue. the implementation of a substantial pipeline Despiteofthe projects rapidlythat falling benefit costsfrom of a renewables generous feed-in technologies tariff support and Malaysia’ scheme. s growing Our forecast role as isathat manufacturer out of a 50GW of solar backlog panels, of suchwe projects, and ouronly Power 20GW Team will forecasts actually that the come domestic online, electricity as most will market not bewill ableremain to dominated take advantage by thermal of thesources; FiT subsidies we expect amid that stringent the Malaysia’s government energy requirements mix will notand change Source: IEA BMI Research significantly delays in development, between 2018 ” BMIand Research 2027. added.

Natural gas ensures electric demands x throughout the day

Source: BMI Sources: NREL, Research NYISO, Pace Global

ASIAN POWER 7


FIRST

Pushing the nuclear dream

need for gas heats up

Nuclear energy worldwide

INdonesia

H

Asia

alf of ASEAN is predicted to operate their first nuclear power plants and reaping the benefits of cheaper electricity to augment their soaring consumption. It is projected to begin nuclear energy operations in 2035 and reach up to a capacity of 2,000 to 5,000 MW by 2040, said Dr. Ing Kusnanto, manager of ACE-Canada nuclear & radiological programme administrative support, citing projections from the 5th ASEAN Energy Outlook. Indonesia, Malaysia, Philippines, Thailand and Vietnam have put interest to pursue nuclear energy in their plans and are in their first phase of preparations to build a nuclear power plant. Kusnanto noted that whilst these five nations are in different stages of preparation in pursuing their first nuclear power plant, they have established or are in the process of creating a Nuclear Energy Program Implementing Organization, or NEPIO, which coordinates related stakeholders and develops the roadmap of the national nuclear power programme. Furthermore, the Integrated Nuclear Infrastructure Review mission has been done in the five countries. Stronger cooperation will also assist the region to build up the plant WATCH

Source: IAEA

necessary expertise, safeguards, and stakeholder support to roll out their nuclear power programmes, said Kusnanto. Some of the region’s key strategies until 2020 include setting up regulatory frameworks, bolstering civilian nuclear safety and emergency response. Acceptance will be key “I think the public acceptance, capacity building and human resource development are still in the critical first phase,” said Kusnanto. “A very strong policymaker is very important to realise the nuclear power programme in ASEAN, as are the nuclear business aspect, industry improvement and national capacity building.” “Nuclear energy in ASEAN is very important to achieve the energy security, accessibility, affordability and sustainability in the future,” said Kusnanto. This can be seen in the case of Indonesia, a country facing rising demand for electricity.

Heru Dewanto, CEO, Cirebon Power

2

5 years of being in the energy industry has shaped Heru Dewanto into the leader and expert that he is today. He has managed a wide range of infrastructure projects including power plants, toll roads, waste and water management, and housing amongst others. Currently, Dewanto is the president director of Cirebon Power, an energy utility operating 1x660MW clean coal power plant using supercritical technology and 1x1000MW ultra supercritical power plant in Cirebon West Java. What are your top three priorities for Cirebon Power’s generation side? To complete the project at the highest quality, ahead of time, within the budget and with zero accident; To operate the power generating asset at the highest reliability and the lowest emission reliability and at lowest emission; To cause the project to impact and empower the life of the people of Cirebon and Indonesia at large

Taswanda Taryo

Lumut Balai plant’s PPA deal still stuck

Sarulla geothermal plant opens 3rd unit

AGL Energy gets offer for Liddell plant

INDONESIA

INDONESIA

AUSTRALIA

Pertamina Geothermal Energy and PLN continue to lock horns over an adapted price for power from the 55MW Lumut Balai geothermal power plant. The facility is expected to go online later this year, but both parties have not settled for a power purchase agreement. The price of electricity that was previously agreed upon is US$0.116/kWh, but PLN requested a review as it deemed the price too high.The government has asked PLN and Pertamina to immediately discuss the price of electricity sold from geothermal power plants.

PT Medco Energi Internasional Tbk announced the commercial operation of the third and final unit in the phase one development of the Sarulla Geothermal Power Project. Commercial operation of the project’s first and second units began on 18 March 2017 and 2 October 2017 respectively. The project is the world’s largest single-contract geothermal power plant and is located in Pahae Jae and Pahae Julu Districts, North Tapanuli Regency, North Sumatra Province, Indonesia. The U$1.7b project generates approximately 330MW.

AGL Energy Limited received a non-binding, highly conditional indicative offer from Chow Tai Fook Enterprises (CTFE) and Alinta Energy Pty Limited (Alinta) to acquire the Liddell Power Station, associated assets, and the related site for cash consideration payable to AGL of $250m. AGL is assessing the proposal. No assurance can be given that any transaction will result from the offer. It has not sought to sell the Liddell Power Station, as it requires Liddell to provide energy to its customers until 2022 and for repurposing.

8 ASIAN POWER

What do you think is Indonesia’s biggest energy problem at the moment? The primary energy supply in Indonesia is mainly based on fossil fuels like oil and gas. In 2015, 41% of Indonesian energy consumption was based on oil, 24% on natural gas and, 29% on coal. Renewable energy, particularly hydro and geothermal, has a share of 6%. Transportation sector is the biggest contributor to this. As such, government programmes for mass transport and electric cars need to be supported. The prolonged price subsidies and availability of oil resulted in low oil prices in Indonesia. Currently, the gasoline market has been opened for private players and gasoline price for transportation is fluctuating, adapting to changes in oil prices. Additionally, Indonesia has a hard time to produce 1 million barrels per month to meet the demand of 1.6 million barrels per month. Indonesia has once been member of OPEC and now is a net importer of oil. On the other hand, Indonesia is still a net exporter of natural gas. That is why the national utility PLN is switching power generation from expensive oil to gas and coal of which Indonesia has large reserves.


CO-PUBLISHED CORPORATE PROFILE

Toshiba ESS steps up digital game in energy domain Digital technology and data analytics take a whole new spin in the utilities space.

W

hen power demand surged after Tokyo experienced heavy snowfall in January, Tokyo Electric Power Company (TEPCO) decided to request for negawatt for the first time. Toshiba Energy Systems & Solutions Corporation (Toshiba ESS) provided it, mediating between the TEPCO and commercial scale utility customers. According to Takashi Sasaki, Chief Technology Executive of Toshiba ESS, the company’s substantial advantage in supply demand control system is a major element that differentiates them in the energy management area. Japan’s lowest power outage rate in the world is owed to the sustained effort of utilities in Japan, and Toshiba has long supported them with its equipment and systems. In fact, 70% of power system control centres in Japan is delivered by Toshiba. Toshiba ESS and Japan’s Tohoku Electric Power Co., Inc. announced a collaborative digital effort last year with an ambitious goal to analyse operational data for the prediction of anomalies and potential troubles in thermal generating equipment. Developments in IoT solutions and big data analytics have made the initiative possible, further allowing the analysis and improvement of heat efficiency once the system will be installed in 2019. Sasaki said that Toshiba offers its digital solutions to utilities as a way to make savings by helping them better maintain equipment, increase production, avoid outages, and manage assets and control the grid more effectively. In this way, utilities can operate more efficiently and be more eco-friendly. Furthermore, Toshiba ESS’s solutions provide utilities with means to accelerate the management of renewables flowing into the grid, joining the concerted effort to decarbonise the energy system. Sasaki said that whilst renewables are clean, they cause output fluctuations and thereby require smarter adjustments to balance the grid. SPINEXTM: Toshiba’s digital architecture The backbone of Toshiba ESS’ digital solutions is SPINEXTM, Toshiba’s digital architecture that is used throughout Toshiba group. SPINEXTM features three key technologies: edge computing, digital twin, and media intelligence. With the company’s co-creation approach and digital solutions suite, power utilities will be in superior control over their own processes. Edge computing reduces latency in response by collecting and analysing data near the source, thereby enabling distributed processing. Meanwhile, its digital twin technology enables accurate prediction and simulation of things using real time data. With a digital twin, real products can now avoid failures and further improve their performance. “Our deep knowledge and accumulated know-how of the hardware allows us to build very precise digital twins and make accurate

simulations. We are the one who knows best how to enhance generation efficiency. Companies with both hardware and software would have an edge in digitalisation,” Sasaki said. Lastly, SPINEXTM’s media intelligence technology integrates speech and image recognition technology with advanced AI to understand human intentions and support human activities. For instance, it helps to make inspection work more efficient. It understands the spoken words of field service personnel and makes a report. It analyses the images of power lines collected by drones and detects if there is anything wrong with them. Digital milestones From making and transmitting energy to storing it, Toshiba ESS has rolled out digital solution after digital solution. In July 2017, the company embarked on a partnership with the Sem-Calaca Power Corporation (SCPC) to investigate the deployment of total asset management including plant optimisation, predictive monitoring with IoT solutions to detect emerging problems and extend the operating life of the company’s four-unit, 900MW Calaca Thermal Power Plant in Luzon, Philippines. According to Sasaki, this partnership with SCPC is expected to win life-cycle cost savings for the plant by reducing unexpected outage, and to achieve optimised, comprehensive and efficient operation and maintenance management. AI also plays a huge role in Toshiba ESS’s

transmission and distribution efforts. The company has developed a power demand forecast system that uses sparse-modelling technology realising efficient machine learning to determine the correlation of weather information and actual power demand. It earned top prize for forecasting accuracy in TEPCO’s international contest to find the best formula for forecasting electricity load. In the area of smart grid, Toshiba ESS set up a division that promotes energy aggregation business in January 2018. Increasing adoption of renewable energy is expected to spur demand for aggregating services, integrating and adjusting the balance of supply from distributed energy resources and storage and demand. This new division’s activity is backed up by the company’s experience and know-how of renewables and the network control technology supporting them. The experiences include smart grid demonstration projects of large cities such as Yokohama and New Mexico and also of small islands in Okinawa, which gave the company many findings and insights. Such trials and efforts have been made from a decade ago. “We expect to see more and more new aggregators coming into the grid. The grid would require a player that can watch and simulate the grid all the time and control the resources if there are any signs of overload or voltage instability. Toshiba ESS is well positioned to be such a player with its expertise in power grid system technology, together with the advanced digital technologies in the group,” Sasaki added.

“Our deep knowledge and accumulated know-how of the hardware allows us to build very precise digital twins and make accurate simulations. We are the one who knows best how to enhance generation efficiency. Companies with both hardware and software would have an edge in digitalisation.”

Takashi Sasaki, Chief Technology Executive of Toshiba ESS

ASIAN POWER 9


FIRST

Should utilities turn to blockchain? ASEAN

Wei-nee Chen

W

hen the word blockchain is mentioned, thoughts of Bitcoin cryptocurrency naturally arise, but not for energy experts in Southeast Asia who have started to view the technology as an answer to the region’s escalating energy challenges. The ten-member Association of Southeast Asian Nations, or ASEAN region, faces an “energy conundrum,” said Beni Suryadi, manager, policy research & analytics at ACE, with hundreds of millions in the block living without grid-quality electricity. Energy demand in ASEAN is continuously rising given its fast-growing populations and rapidly expanding industrial development. Suryadi expects the bloc’s energy demand to rise almost 4% for the next two decades, higher than the 1% global average. The ASEAN energy mix is also predominantly made up of fossil fuels, complicating the path towards the goals governments have set to pursue cleaner energy options and meeting global climate agreements. Given ASEAN’s unique energy profile, energy digitalisation has emerged in the radar of experts as a source for novel solutions. Blockchain in particular checks most of the boxes in Malaysia’s search for a solution fitting its future energy roadmap, said Dr. Wei-nee Chen, chief corporate officer at SEDA Malaysia, the government agency which spearheads the country’s energy transition by implementing net metering schemes and

other energy efficiency programs. Decentralisation and digitalisation Chen said Malaysia’s vision of the future of energy can be summed up in 6D’s, namely decentralised, distributed, decarbonised, democratised, deregulated, and digitised. Of these, blockchain technology adopts five, only missing the decarbonisation component. One of the most popular uses of blockchain in the energy sector is in powering a peer-to-peer energy market, according to Chen. It is also used in managing localised demand response in a more cost effective manner. Finally, blockchain enables the sale of electricity through locationbased pricing, which could result in driving down customer electricity costs as they can purchase directly from the supplier and avoid heavy grid costs. Chen acknowledged that the use of blockchain technology anywhere around the world is still in the infancy stage, but she noted that at the end of 2017, Malaysian Prime Minister Najib Razak announced the formation of a national regulatory sandbox, which allows innovative technologies to be tested in a live environment without the regulatory constraints. The sandbox was set for a trial period of nine months after which the sandbox participants will propose regulatory changes so their innovations can run in live environments. SEDA has submitted an application to allow the agency to test a peer-to-peer energy platform, to allow solar producers to sell their excess electricity to consumers even at a lower rate than what the distribution system operator is willing to buy. “So all these exercises are meant to promote the solar PV market domestically by hopefully designing a business model that makes the investment in the PV systems more commercially viable,” said Chen.

x BRIGHT OR BLEAK? xxx Philippines

xxx Leandro Leviste, CEO, Solar Philippines

Solar isPower Asian now the talked least tocost YTL for Power all peaking, International Berhad’s CEO mid-merit, andTan baseload Sri Francis requirements, Yeoh aboutand thewill company’s thus comprise largest the projects. vast majority of additional power generation capacity from hereon in the Philippines. Asian caughtmost up with Leandro Tell us about thePower company’s stellar Leviste, of Solar Philippines, on histhey thoughts power CEO projects to date and where are about the industry’s growth. located. At present, we are constructing the first oil shale mine Is solar mouth growth power a problem plant withoraopportunity? capacity of 2 x 235 MW Solar will start (net) by utilising displacing the circulating more expensive fluidised peak bed mid-merit and boilers (CFB) (2018-2021), technology and in the byHashemite the time Kingdom that is completed, of Jordan. will The supply project reliable is located baseload at Attarat(2022 power um Guhdran onwards) which and is demand 110 kmgrowth. southeast This ofinAmman. is time forAt when a total additional investment supply of US$2.1b, is needed,it is the largest adding storage private hours sector as costs project fallinwhilst Jordan delivering to date and is expected reliable power attoconsistently meet 15%low of Jordan’s cost. Low-cost annual electricity demand. renewables will depress Attarat market Power prices, Company stranding (APCO) all fuel-based whichplants, is the project as solarcompany comes tohas supply entered the into a 30-year majority of thePower energyPurchase mix. ThisAgreement will happen(PPA) on its with the own through Jordanian RCOAnational and distributed utility and generation, single buyer, and power NEPCO companies for the sale have ofthe thechoice entire electric whether capacity to participate and net in this electrical transition output. or beThe rendered other project we obsolete byare it. currently developing is in Cirebon Regency, Whether West andJava, when Indonesia. solar willThe supply 2 x the 660 MW (net) coal-fired majority of the power energyplant mix iswill a function utilise state-ofof the the-art cost of ultra-supercritical solar and storage technology. systems. Whilst The panel project company, costs havePT fallen, Tanjung system Jaticosts Power have Company not as fast, has executed given inefficiencies a Power Purchase of the Philippine Agreement market. (PPA)The with PT PLN feasibility of solar (Persero) andin storage December is a question 2015. We of are always cost, not capability. on the lookout Solar-plus-storage for new opportunities is already in generation cheaper than LNG whether at today’s it is bidding prices,for and existing cheaper assetscoal than or investing as baseload in new at $150-200/kWh. projects.

When privatisation calls, should Asia’s power utilities listen?

I

f there was any doubt that Southeast Asia was serious about attracting larger investments to its power sector, one only needs to look at the workarounds governments in the region have been developing to address bankability issues — ­ from Indonesia setting up an infrastructure guarantee fund, to Singapore’s exploration of take-out financing, to the rising trend of privatisation of assets. Analysts reckon that these efforts, combined with attempts by investors to recalibrate their expectations on project returns, are helping to open up the market for the kind of large-scale investments the region needs to reach its ambitious targets, which includes ramping up electrification and diversifying into renewables. The privatisation trend, in particular, holds promise in the near to mid-term horizon, according to Sharad Somani, partner, global infrastructure advisory at KPMG, of the privatisation trend. “I think a lot of governments in the region, particularly Indonesia, has recognised that greenfield projects take a long time, and it’s a dampener on the spirit

10 ASIAN POWER

of investment by the private sector,” he said. “What they are proposing is they are offering a few projects from PLN or the road sector, all the sectors, effectively privatizing existing assets which are easy to fund because you know the operational track record is immediately generating funds. And that to my mind will be a great opportunity for all investors and lenders in the next three to five years.” Somani reckoned that the efforts by Southeast Sharad Somani Tim Rockell Josh Carmody Asian governments to address bankability are far from perfect, but these are helping to drum up interest amongst investors who would otherwise Annual solar PV installed capacity and revenue completely write off the region due to red flags by region such as long project times and relatively high risks. “I don’t think that’s a complete solution, but it’s a good start,” said Somani of the Indonesian Infrastructure Guarantee Fund. He reckoned that without the initiative, investors would be less comfortable to invest — a challenge that resonates across the Southeast Asian region where “most of the projects don’t have a very well-defined path to Source: The Climate Institute development.”


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In Korea, we will focus on developing regional floating photovoltaic projects as well as utilityscale solar photovoltaic projects centering around industrial areas and regional unit.

Park Ki-Hong President & CEO POSCO Energy


CEO INTERVIEW

POSCO Energy turns to floating PV projects President & CEO Park Ki-Hong reveals the utility’s realigned focus on developing regional floating and utility-scale photovoltaic projects, and expanding its renewable energy business with overseas IPPs.

S

outh Korea’s largest private energy producer POSCO Energy is bent on making bigger leaps in the renewable energy space as president & CEO Park Ki-Hong explains in this exclusive interview with Asian Power. He was appointed as the CEO of POSCO Energy in March of this year. What are your top three priorities for POSCO Energy’s generation side? Just like the global energy market, Korea’s energy market is encountering a wide variety of changes. In the past, the main focus of power policies was economic feasibility. Now, a shift is being made to energy policies that take into account safety as well as our environment. As Korea’s first and largest private power producer, POSCO Energy has been providing a steady supply of power to Korea’s metropolitan area. Since we are at a turning point, we need to make strategic changes to make a leap to the next stage. Based on POSCO Energy’s 50 years of expertise in power generation, we have secured global competitiveness through projects in Indonesia and Vietnam. In addition to the current power generation business, we plan to advance into the gas business of directly importing LNG and plan to establish a smart solution through a smart grid, in order to become a ‘global, ecofriendly energy company specializing in Gas & Power’. In order to achieve this goal, POSCO Energy will do the following: First, to be in step with global, eco-friendly energy development, we will actively engage in developing new & renewable IPP projects. In Korea, we will focus on developing regional floating photovoltaic projects as well as utility-scale solar photovoltaic projects centering around industrial areas and regional unit. Also, we will continue to develop business and increase operation knowhow through the off-shore wind power generation projects in Jeollanam-do Shinan. Based on the experience we gather in Korea’s new & renewable energy business development and operation, we will actively engage in pursuing overseas IPP projects. Second, we will expand the gas business related to power generation. A collaboration system will be established between POSCO Energy’s gas generation business and POSCO’s LNG terminal in Gwangyang to build a business with internal stability. Third, we will direct our overseas thermal generation business towards a way that minimises environmental issues. Since POSCO Energy has the ability to develop IPP projects and is well equipped with IPP business capability in Financing, O&M, etc., we will continue to develop overseas power generation projects. We will apply state of the art coal-fired power generation technology such as ultra super critical pressure to minimise environmental issues and spread eco-friendly technology. Also, based on the knowhow we collected through our domestic off-gas power generation business, we plan to actively utilise recycled energy in our ecofriendly power generation business. What is POSCO Energy’s biggest plan to date on the generation side — any plans of new plants, investment in other plants in other countries, etc.? What should the industry be excited about? How do you plan to achieve these? Within Korea, a 2,100MW ultra super critical coal-fired power plant in Samcheok, a 300MW wind power generation plant in Jeollanam-do Shinan and a variety of photovoltaic power generation plants, including floating types, are in progress. In addition to the 3.4GW LNG power plant in Incheon that we are currently operating, we are also considering to develop other

additional LNG power generation projects. Regarding overseas projects, we are targeting to have the groundbreaking of a 300MW thermal generation project in Botswana, Southern Africa, within the year. The 1,200MW ultra super critical coal-fired power generation project in Vietnam, Quynh Lap 2, is also moving forward as scheduled. In addition, we are keeping an eye on good opportunities in line with new & renewable power generation projects overseas. In parallel with these efforts, we are looking into additional project biddings with various Global IPP players that we are collaborating with and we are anticipating that there will be promising results shortly. What do you think is South Korea’s biggest energy problem at the moment and how should this be addressed? The biggest risk in Koreas’ electric power industry is the fact that the power demand has reached a plateau. Moreover, due to the NIMBY (Not in My Back Yard) phenomenon, there are significant difficulties in constructing infrastructure such as power plants, transmission & distribution systems, etc. Especially, in the power generation section, there are growing concerns that the volatility in electricity exchange will become greater. Therefore, the market system should be improved to allow the power purchaser (KEPCO) and power supplier (power producer) to avoid the risks related to the fluctuation in electricity trading price. In other words, the time has come for us to change the electricity market’s price determination method from a Cost-based Pool (CBP) to a price bidding method. If there are concerns about making an immediate change, it could be introduced gradually by implementing safety mechanisms such as price limits. Moreover, we need to supplement market function so that it can respond to the future changes that will take place in the power industry. Measures should be taken so that the market can respond to the tasks given by energy policies, such as responding to environmental issues and increasing new & renewable energy. Also, in order to build a more flexible electricity market, we need to expand policies on evaluating the cost of greenhouse gas, limiting CO2 emission, etc. What has been the experience of POSCO Energy’s international investments and what are your sweet spots? POSCO Energy’s first overseas investment was a joint project in 2010 with AES, a U.S. based company, for Mong Duong 2, a 1,200MW coal-fired power plant in Vietnam. Afterwards, there was the 200MW PT. Krakatau off-gas power generation project that was commenced when POSCO started the construction of its integrated steel mill in Indonesia. This project was completed in 2014. There was also a joint project that began in 2015 for a 300MW thermal power plant in Botswana, which was one of POSCO Energy’s main overseas investments. In addition to this, we have worked closely with Global IPPs in bidding projects in the Middle East, South America, etc., so we have acquired the ability required for overseas IPP projects. The earlier stage of POSCO Energy’s overseas business was focused on Asian countries such as Vietnam, Indonesia, and Mongolia etc. where POSCO group had already set up an overseas network. Now, based on our competitiveness, we are not only targeting Asia, but also expanding our target to the Gulf Cooperation Council (GCC) countries in the Middle East and Africa. ASIAN POWER 13


Country report: THAILAND

Other renewable industries are getting saturated

The sunny prospects and hazy risks of Thailand’s next stage of solar growth Whilst Thailand has broken away from the pack to become the undisputed leader in solar power in Southeast Asia, sustaining the momentum will mean grappling with current overcapacity and a scrutinising regulatory merger regime.

T

hailand has installed nearly 3 GW of solar power capacity, more than all other countries of the ten-member Association of Southeast Asian Nations, or ASEAN, combined. Moreover, the country looks to potentially triple its solar power capacity as it looks to renewables to help meet an expected surge in energy demand. But one key challenge is that its current mechanism for supporting renewables, the auctionbased SPP Hybrid Firm program

The situation has been further complicated by the current overcapacity in Thailand’s power market.

Thailand’s first three GW and the new road map: Cumulative solar PV installed generating capacity

Source: DEDE, ERC, and IRENA Report

14 ASIAN POWER

“represents a rather limited opportunity for ‘pure’ solar PV,” said Matthew Heling, head of energy consulting, Asia Pacific at Poyry. Solar rooftop heats up Heling noted that the program requires ‘firm’ output, has a limited quota, and is also open to other renewable technologies that tend to better fit the ‘firm’ requirement such as biomass. The situation has been further complicated by the current overcapacity in Thailand’s power market, which Heling said was likely one of the drivers for the government to recently announce it will no longer procure any new solar and wind for the next five years under the assertion that solar and wind are putting an upward pressure on wholesale electricity rates. As the solar sector deal with these headwinds, a bright spot remains: Rooftop solar PV continues to grow and could accelerate further on the back of potential stronger support mechanisms. “Whilst individual system sizing is limited by the current lack of export compensation, the Thai regulator has

hinted that it may soon allow some level of export compensation for (at least) residential consumers,” said Heling, noting that more details could be shared when the revised Power Development Plan is released likely within the next several months. Prasert Sinsukprasert, deputy director-general of the Energy Policy and Planning Office, had reportedly said solar rooftop installations and biomass projects would probably account for a significant part of the additional sources of green power in Thailand because other parts of the renewable power sector are becoming saturated. Notwithstanding this potential economic incentive, solar rooftop installations present a good investment proposition for some manufacturing firms. “Thai companies in the manufacturing sector can utilise rooftop solar not only to improve their environmental profiles but also to lower their operating costs,” said Dr. Ulrich Eder, managing director of Pugnatorius Ltd. “This offers attractive opportunities, amongst others, for foreign investors in Thailand’s solar energy industry.”


Country report: Thailand Renewable support scheme Thailand

Dr Ulrich Eder

Matthew Heling

Source: Ministry of Energy

Eder reckoned solar rooftop installations are already widely popular in Bangkok as well as the various production plants in the country’s Eastern seaboard. “The owners of factories, buildings, and residences have installed solar rooftops to produce their own electric power and cut back on expenses,” he said. “Reductions in technology prices and innovative financing structures help to make government subsidy programmes unneeded and obsolete and made PV competitive with fossil fuel energy sources.” Renewable technology has improved dramatically during the past five years which could bring down investment cost, especially for solar power, to a more investible level, said Chaipat Thanawattano, analyst at DBS. Cheap funding cost during the low interest cycle globally helped enable this trend, Thanawattano noted, which pushed the government to alter the tariff scheme for renewable power plants to FiT. Whilst the FiT is a much lower rate, albeit for a longer period, the regulator has insisted that this will still provide favourable return to investors, he said. Floating solar makes waves In 2018, there are several notable business opportunities for solar projects, from solar rooftop investments to new solar farm biddings. Of these, floating solar farms “could be the next big thing,” said Nutavit Sirikan, attorney-at-law at Tilleke & Gibbins International, citing estimates that around 3% of Thailand’s total area is water surface that could be developed for floating solar farms. Eder said floating solar farms hold the advantage of generating renewable energy without taking up space that could be allotted for farming or other land-based economic activities. And compared with a ground-based solar farm, floating solar farms benefit from the cooling and cleaning effect of the water, which helps keep the solar panels running at a high

efficiency, he added. The Electricity Generating Authority of Thailand is launching a floating solar farm in Wong Noi Power Plant’s Reservoir, in Phra Nakhon Si Ayutthaya province. The project has an installed capacity of 2.6 MW on an area of 20 rai, or 32,000 sqm. A smaller and merely experimental site has been developed on a pond at Rayong’s Map Ta Phut Industrial Estate. About THB 3.6 billion baht, or US$114.7 million, was reportedly invested for the project. Private investment still key Whilst solar rooftop installations and floating solar farms could fire up investor appetite, Thanawattano held a less sanguine investment outlook for the whole renewable sector owing to expectations of excess power supply for at least the next eight years due to slow economic growth. The sector also faces key risks such as the uptrend of interest rates and the return on investments on new projects under development. “Renewable power projects should remain in focus in the private sector, being the only segment which still requires more investment but this would be interesting for smaller investors,” said Thanawattano, noting that this has prompted larger operators to seek investment opportunities overseas, mainly in neighbouring and ASEAN countries such as Myanmar, Indonesia and the Philippines. But he flagged the regulatory risk associated with such moves, especially when investing in countries with “peculiar and unstable” power industry regulations. In response, private operators will likely form more partnerships to develop these large overseas projects, mainly to diversify their risks. Sirikan said that the energy ministry has made clear in its Power Development Plan 2015 that private investment will play a crucial role in driving electricity generation capacity expansion to meet

Nutavit Sirikan

Prasert Sinsukprasert

Thailand’s rising energy demands. In 2017, Thailand’s policy makers raised the country’s renewable energy target to 40% of the energy mix, up 15 percentage points from the previous 25% target, by 2036 as part of its revision to the Alternative Energy Development Plan. The new target would mean the country’s total renewable power generating capacity would be increased to 40 GW by 2036 from 19.6 GW under the previous plan. Consolidation on the horizon Sirikan noted that much of the 10GW of additional capacity since 2012 has been driven by the rising number of small power producers, or SPPs, with installed capacity for SPPs climbing nearly threefold to 7.5GW in November 2017 from 2.6 GW in 2012. In fact, SPPs now represent approximately 17.8% of Thailand’s total generating capacity, he said, but he foresees a period of consolidation on the horizon. “As many SPP projects are reaching maturity and achieving stead, predictable returns for their investors, and as new SPP and very small power producer, or VSPP, projects come online, we can expect a degree of market consolidation as producers aim to achieve economies of scale,” said Sirikan. “With this in mind, it is useful to reflect on Thailand’s preclosing approvals in the energy sector.” Sirikan noted that investors and companies will need to navigate Thailand’s effective pre-closing merger control regime for licensees which prohibits an entity which has obtained a license from the Energy Regulatory Commission, or ERC, from merging with another licensee without permission from the ERC. Regulation also requires licensees to notify the ERC if they wish into enter into a contract which causes one person to have absolute or partial direct or indirect control of its management, where they are taken over or act to take over, and a where person with control of policies and management of one licensee takes direct or indirect control of another licensee.

Renewable support scheme Thailand

Source: Ministry of Energy ASIAN POWER 15


Country report: PHILIPPINES

Concerns about solar’s viability to be used with battery for peaking use are rising

Is the Philippines ripe for energy storage? Some utilities see batteries as the solution to improve the economics of a larger scale roof-top solar industry.

T

he energy storage market in the Philippines is still in nascent stage and regulators have a big role to play to boost its adoption. According to Sarah Fairhurst, partner at The Lantau Group, most local energy storage projects are delayed due to pending approval from regulators or only in proposal stage. Globally, Fairhurst noted “the storage revolution is being driven by regulators who understand that they actually have to keep up with technological advances. That’s not happening here yet in the Philippines.” Fairhurst said that some energy firms see battery storage as the solution to improve the economics of a larger scale

roof-top solar solution particularly if they have non-day time load. Basically, battery storage provides a backup energy resource for intermittent power sources such as the solar power, which saw a dip on output during cloudy conditions. Sarah Fairhurst

Jeff Miller

Source with the least cost for peaking requirements

Source: Solar Philippines

16 ASIAN POWER

State of solar Similarly, Jeff Miller, partner at OWL, believes battery energy storage system (BESS) is the best solution for hybrid power plants using solar power to maintain the energy source throughout the day. He thus noted the use of BESS makes solar output more stable, provides additional power at night time, and helps in controlling frequency on the microgrid. “Over the next 10 years, I think there’s going to be tremendous opportunities where solar plus battery storage could replace expensive coal with low cost,” said Bill Ruccius, executive vice chairman/ treasurer of the Independent Power Producers Forum. Leandro Leviste, founder and CEO of Solar Philippines, expects the solar energy to penetrate 20% of Filipino households over the next five years. Leviste said they are now “under supply agreement with Meralco at a price as low as PHP2.99 per kilowatt hour with a new CSP now being conducted by

Meralco at PHP 2.98 showing indeed the attractiveness of these rates and we have no doubt that the price will continue to drop.” Shadowing doubts However, amongst the top concerns looming around solar energy is whether it is viable to be used with battery storage for peaking and midnight utilisation in the next two to three years. “If you’re going to be integrating storage for a day time firming application you wouldn’t even need 1MWH of storage for 1MW of PV, you would only need perhaps half an hour per megawatt of PV,” Leviste explained. Moreover, some companies leveraged solar energy to power their corporate social responsibility (CSR) projects on provinces with inadequate source of electricity. The Power Sector Assets and Liabilities Management (PSALM) Corporation, for instance, used solar panels as an energy source to power the machines they have to use on their livelihood programme (i.e. tailoring) in the municipality of Estancia in Iloilo. Helena Tolentino, vice president for CSR of PSALM, said they spent PHP485,000 for the solar panels and hopes to extend it to government’s socialised housing units.


Country report: PHILIPPINES bigger market for renewable energy. Are local grids ready for the load?

Leandro Leviste

Jaime T. Azurin

Source: Solar Philippines

Finding the balance in development “[The] energy sector has an impact on both economy and the environment. We do recognise that energy is the lifeblood of all economic growth. Without power, our factories, offices, and railways will simply not run but generating power to support these activities would cost pressure to the environment,” said Jaime T. Azurin, president of the Global Business Power Corporation. The United Nations Development Programme (UNDP) in 2015 launched 17 Sustainable Development Goals, which zero in on climate change and sustainable consumption amongst others. As such, Azurin elaborated four strategies to help energy firms embark on sustainable approach to development in line with the UNDP’s goals. Firstly, find the right balance in the energy mix. In the Philippines, renewables take 30% of the current energy mix said Attorney Jose Layug Jr., chairman of the National Renewable Energy Board. However, the government is looking to raise it to 35% by 2030 as stated in the National Renewable Energy Programme. Secondly, promote a healthy regulatory environment. Azurin mentioned several regulations in the pipeline that could help balance out environment and economic development. “Under the RPS, distribution utilities must source a portion of their power supply from eligible RE producers whilst under the Green Energy Option endusers must have the option to choose renewable energy as their energy source,” he said. Thirdly, improve energy efficiency by finding ways to consume less fuel without compromising the energy output. “This is done through careful and routine maintenance of our facilities to ensure that they are running in optimal condition. This can also be achieved through innovation of various energy technologies measures in our day-to-day operations,” Azurin explained. Lastly,

continuously leverage technologies that could help improve the energy sector. Bracing for the new wave Third platform technologies – which include social media, mobile, cloud computing, and big data – are already a thing of past thus energy firms must brace for the new wave of technologies that could disrupt the market. Gavin Barfield, chief technology advisor at Meralco, identified blockchain, Internet of Things, edge computing, virtual and augmented reality, bots, and artificial intelligence as emerging technologies that energy firms must keep an eye to. “The utility of the future will be a fully digital system,” he said. In Meralco, for instance, over 90,000 smart metres were deployed. The data from smart meters combined with the data from beyond-the-metre devices such as smart plugs & smart appliances further enable the electric company to better personalise their services to consumers. On top of that, the smart meter data help Meralco determine fraud at an early stage based on patterns and unusual behaviours in the meters. Barfield revealed 200,000 more smart meters will be deployed this year, after getting approval from the regulator, and aim to roll out 3.3m smart meters by 2024. Flexibility is key Furthermore, Celine Paton, manager at The Lantau Group, underscored the importance of having more flexible systems in order to adapt to the everchanging technology landscape in the energy sector. Anabele Natividad, vice president for project development at Bronzeoak Philippines said in a separate interview that whilst there has been a policy shift towards renewable energy in the last few years, there is a need to revisit existing rules. Doing so will enable the country to tap into the investor interest, which has been growing over the years, and create a

Attorney Jose Layug

Celine Paton

Frank Thiel

Gavin Barfield

Reliability as priority Whilst advocates for renewable energy wait for stronger policy backing that will bring down costs, the reality on the ground is that regions like Visayas and Mindanao cannot rely solely on renewable energy. Reliability is paramount for these fast-growing regions and has made coal-fired power plants a necessity to avoid costly power disruptions. “Although there has been progress in renewable energy projects, the region needs to supplement these developments with base load capacity; otherwise, if the wind or solar power supply is down, reliability will be compromised,” said Francisco C. Sebastian of Metro Pacific Investments Corporation in an interview with The Oxford Business Group. “For a developing country like the Philippines, the cost of renewable energy and indigenous power sources is high, and additional base load is required to ensure power security and to deliver a stable supply.” With its expanding economy and climbing energy demand, the Visayas region has been attracting more energy developers and many projects are currently under construction or expansion. In the past, the main challenge for power generators, especially those that want to put up coal-fired power plants, was changing the mindset of local communities and governments that oppose such plants. But a more open dialogue and a larger allocation for environmental protection seems to have softened their adversarial stance. “There have been significant efforts put into information campaigns where the public has been educated about coal and global warming,” said Sebastian, adding that for coal-fired plants, an estimated 30% of the project cost is spent on clearing up carbon emissions and raising environmental standards ahead of existing regulations, particularly in terms of soil and water testing.

Problem or opportunity?

Source: Solar Philippines ASIAN POWER 17


sector report: WIND

Installations have been impressive, but most grids are not stable enough

Sharply falling costs sweep the Asian wind power industry off its feet Can the increasing penetration of wind power be handled without threatening the stability of the power system?

W

hen Taiwan first tapped into its huge wind energy potential, it did not expect a growing swarm of bigtime foreign developers pitching in. Foreign energy companies are highly attracted to the country’s geographical similarities to Northern Europe, conditions which are very suitable for offshore wind farms. The unprecedented amount of interest enabled the Taiwanese government to set an ambitious 3 GW offshore wind target for 2025, a move being mimicked by countries all over the region where massive renewable energy resources have yet to be fully unlocked. Experts stress that recent power challenges in Asia are proving that it is time to put these energy assets to good use, especially as the cost of wind power continues to plummet. From big names like China and India to more recent players like Vietnam and the Philippines, wind energy in Asia has been seeing major technological developments despite regulatory and cultural challenges. Mother markets Asia led the globe in the number of new installations in 2016, with China maintaining its top spot for the last eight years and India following closely in the top five rankings. In fact, recent data from the Global Wind Energy Council (GWEC) show that China’s cumulative wind power installations are 3.4 GW more than all of the European Union combined. “Wind power continues to grow in double digits, but we can’t expect the industry to set a new record every single year”, says Steve Sawyer, GWEC secretary general. “Chinese installations were an impressive 23,328 MW, although this was less than 2015’s spectacular 30 GW, which was driven by impending feedin tariff reductions. Also, Chinese electricity demand growth is 18 ASIAN POWER

Experts believe that China’s situation will improve over the medium term, but in the meantime, firms should expect a loss in profitability and greater competition.

slackening, and the grid is unable to handle the volume of new wind capacity additions; although we expect the market to pick up again in 2017.” The Chinese offshore market began what many hope is the sector’s long awaited take-off in 2016, with China passing Denmark to achieve 3rd place in the global offshore rankings, after the UK and Germany. GWEC, however, forecasts that China will experience a slowdown in 2017. After taking off in 2016 and grabbing the 3rd spot in the global offshore rankings, the Chinese market will continue to face the major challenge of curtailment. Sawyer says that China’s National Energy Administration and State Grid is heavily working out transmission bottlenecks, amongst a number of other grid issues. Experts believe that China’s situation will improve over the medium term, but in the meantime, firms should expect a loss in profitability and greater competition. New record, new installations “At the highest level, delayed connection and curtailment represent a loss of potential and actual power supply, since the power that is lost is renewable and with minimal emissions of carbon dioxide and other pollutants, and is largely replaced by coal-fired power. This has a significant environmental impact, compromising the likelihood of China realising its ambitions for renewable power generation, and, by extension, its ambitions for emission reductions,” says Hanjie Wang, consultant, International Institute for Sustainable Development (IISD). Farther down south, India reached a new national record with 3,612 MW of new installations. According to the Global Wind Energy Outlook 2016, India is now the 4th largest market with a


sector report: WIND How China dominates the global wind market

Countries/regions with the most governmental renewable energy R&D spending in 2016

Source: Carbon Brief

Source: Frankfurt School

total of 28,700 MW. Sawyer says that they have great expectations for the Indian market, with certain expectations on offshore making a contribution in the country in the next few years. India also has a reputation for being a key market for low wind speed turbines, turbines which are generally on taller towers with smaller generators and larger blades, and operate with a higher capacity factor. Sam Fankhauser, co-director at Grantham Research Institute on Climate Change and the Environment, says that India undertakes process innovation by adapting European turbines to the Indian context, where wind speeds are lower. “India’s wind energy market is expected to attract investments totalling Rs 1,00,000 crore (US$ 14.9b) by 2020, and wind power capacity is estimated to almost double by 2020 from over 23,000 MW in June 2015, with an addition of about 4,000MW per annum in the next five years,” according to a report by the India Brand Equity Foundation. In January, Suzlon Group achieved the 10,000MW cumulative wind energy installations in India, a milestone capable of powering over 5 million households every year and offsets almost 21.5 million tonnes of carbon dioxide emissions annually. Suzlon Group believes that this achievement is equivalent to planting over 1500 million trees. Tulsi Tanti, chairman and managing director, Suzlon Group, says that it is heavily invested in helping the Indian government achieve its target of 40% renewable energy by 2030. Gathering wind The global wind sector is seeing more bright spots across Asia, with Japan, South Korea, and Taiwan set on increasing capacity in their offshore wind farms and Indonesia, the Philippines, and Vietnam working on onshore wind developments. “With the increasing penetration of wind power in a larger number of markets, differing experiences have shown that managing large penetrations of variable renewables (wind and solar) can be handled without threatening the stability of the power system, and indeed, in many cases it enhances it, as the system is less vulnerable to the failure of a single large source. Increased interconnection, improved forecasting and facilities for demand management only increase possible penetration levels,” Sawyer says. GWEC’s breakdown of countries shows that the growth in wind energy is deviating from the usual markets, as more countries explore their renewable energy potential and the need for cleaner power consumption. What once was a global wind market dominated by names such as the US, China, Germany, and Brazil is now a market being penetrated by the likes of Chile, Ethiopia, Iran, and Vietnam. Wind energy is a particularly attractive resource not only for its environmental-friendliness, but also for its cost. In a region where most of the countries are rich in natural resources and where most of these countries are developing, wind energy is

Hanjie Wang

Steve Sawyer

Tulsi Tanti

definitely a priority consideration. “The fact remains that wind is one of the least cost options in many markets for new power generation, and this is even before factoring in environmental and health costs. IRENA estimates that doubling the global share of renewables by 2030 would save up to $4.2 trillion dollars annually thanks to avoided expenditures on air pollution and climate change,” says Adnan Amin, director general, International Renewable Energy Agency (IRENA). Vietnam, for instance, is located in the monsoon climate zone and has a 3,000 km long coastline. With average wind speeds of 5.5 m/s to 7.3 m/s per year, the country has very favourable conditions for the development of wind energy. Peter Cattelaens, head of project “Wind Power in Vietnam”, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, says that the technical potential for wind power development in Vietnam is estimated to be around 27 GW, however only a measly 52 MW is in operation. Cattelaens adds that the Vietnamese government has set its own ambitious targets for renewable energy development. The National Power Development Plan (PDP VII) shows that Vietnam aims to increase the total wind power capacity from the current negligible level to around 1,000 MW by 2020 and around 6,200 MW by 2030. The country’s feed-in tariff of 7.8 USc/kWh is currently under revision to become more favourable for the sector’s commercial development. Ruth Briones, president of Greenergy Solutions, Inc., says that the Philippines has so far overtaken all other Southeast Asian nations in terms of installed wind energy capacity. The country now has an operational wind energy capacity of 400 MW, and the Philippine Department of Energy (DOE) is set to increase the installed wind energy capacity to 1,600 MW over the next two to three years. So far, DOE has identified 44 potential sites for setting up wind turbines which together can support 1,168 MW of wind energy capacity. This is part of the National Renewable Energy Program for wind power, which aims to reach a 76,000 MW renewable energy goal. Cashing in on offshore For Asian countries which have a huge wind power potential, but limited land area, offshore wind power development is practically the way to go. In Taiwan, not only is the limited land area the primary challenge, but also pushbacks from nearby communities. Offshore wind in Taiwan offers a substantially higher FiT of NT$5.98/kWh compared to the FiT of onshore wind, which costs around NT$2.88/kWh. According to the Industrial Technology Research Institute (ITRI), a government-backed research agency, potential offshore wind power capacity in the Taiwan Strait is estimated at 15.2 GW. The average wind speed of 11 m/s is considered to be one of the best in the Asian region. However, Tim Ferry, associate editor, American Chamber of Commerce Taiwan, says that the country ASIAN POWER 19


sector report: WIND Potential of renewable energy vis-a-vis installed capacity and potential

Source: Central Electricity Authority

still lacks the experience and resources needed for offshore wind development. “Taiwan has been inviting experienced offshore-wind developers, primarily from Europe, to participate in building the market. For example, the foundations for all 32 of the offshore wind turbines planned for the Formosa OWF 128 MW offshore wind farm being developed by Swancor were designed by Danish engineering consultancy group COWI. As mentioned above, Swancor is currently trying to install two monopiles in the Taiwan Strait that would eventually support two 4MW Siemens turbines on 100 meter-tall masts, which will serve as prototypes for the entire project,” says Ferry. Ferry adds that the European firms are confident that facilities developed along the Taiwan Strait can withstand strong typhoons and earthquakes, with massive waves being the bigger challenge as they can pummel the windmills’ substructures. Waves in the Taiwan Strait can reach a maximum height of 19m during a typhoon, something that the European firms are not new to due to their experience of deploying turbines in the North Sea. “In early September, a group of American companies that included ABSG Consulting group, a marine and offshore certifications firm, along with Keystone Engineering from Louisiana and California’s Principle Power Inc., signed an MOU with representatives from Taiwan’s China Steel Corp., Taiwan Wind Turbine Industry Association, and the CR Classification Society under the auspices of the Industrial Development Bureau. The MOU is intended to apply the offshore wind technologies developed by Keystone Engineering and Principle Power to design offshore wind foundations better able to withstand the impacts of earthquakes and typhoons in the Taiwan Strait,” Ferry says. China’s massive role Recent data from IRENA shows that offshore wind farms in Asia, which amount to almost 1.5 GW, have mostly been deployed by China. Today, Europe takes the lead in offshore wind power development, with most of the capacity installed located off the North Sea or the Baltic Sea. The rapid development of wind power is forcing China’s original long term objectives to be constantly revised; indeed, China has now become the largest and fastest growing wind power generation market in the world. According to the statistics of the Global Wind Energy Council, the global cumulative installed wind power capacity has increased from 23,900MW at 31 December 2001to 486,749MW at 31 December 2016, with annual growth rate at 22.25%. During the same period, the annual growth rate of China’s cumulative installed capacity of wind power was 49.53%, ranking first in the world. In 2016, the new installed wind power capacity of China was 23,328MW, being 42.7% of global new installed capacity, making China the world leader. By the end of 2016, total 20 ASIAN POWER

The main driver for growth in the offshore wind industry has been significant decreases in powergeneration costs, driven by advances in the technology.

installed wind power capacity was 168,690MW, being 34.7% of the world’s installed capacity and the highest for any country in the world. “The main driver for growth in the offshore wind industry has been significant decreases in power-generation costs, driven by advances in the technology. Cost reductions have been aided by government financial support to address the security of electricity supply and decarbonisation of electricity production. Such efforts have, in turn, driven innovation in the sector, which has brought costs down as well as boosting performance,” says Maria Ayuso, junior professional associate, IRENA. However, Bart Linssen, head of German wind-turbine maker Enercon’s subsidiary, SolVent, says offshore is not going as smoothly as planned. Linssen shares that they expect a return interest in onshore, and SolVent is proposing a 10 GW onshore wind power project that could generate employment and offer local investment, thereby overcoming community resistance for onshore projects. Linssen adds that the project would place Enercon’s 4MW turbines in areas where wind speeds average 7 meters/second, generating sufficient return on investment off of Taiwan’s onshore FiT of NT$2.88/kWh (US$0.094/kWh). Regulatory barriers abound Just like any other growing industry in the region, Asia’s wind markets face tough regulatory and market barriers that undermine their potential. Cattelaens says that Vietnam’s low FiT needs to be adjusted, alongside addressing other challenges such as missing finance, low data reliability, the lack of a systematic and consistent database, a deficiency in qualified human resources and technical infrastructure, as well as an inadequate supply of auxiliary equipment and services. “Complex procedures to undertake investments make it difficult for foreign investors to tap into the market. Local institutional stakeholders are unclear about procedures, leading to subjective interpretation and application of national regulations at the province level,” adds Cattelaens. Meanwhile in Taiwan, Ferry says that offshore wind developers are also emphasising the need for a stable regulatory environment, especially during the market-building phase. Better regulatory frameworks would enable developers to enter the market with confidence, thereby creating demand for local suppliers to meet. “Industry players also see a strong need for redevelopment of industrial harbors in Taichung and Changhua to meet the scale of offshore wind turbines that can stand 100 meters above the sea and have rotor diameters of 120 meters. Upgrading and expanding the grid will likewise be necessary to ensure the viability of offshore wind,” adds Ferry. Linssen says the Taiwanese government also has to create structures for easy setting up of community-invested wind farms and speeding up the permitting process. According to him, since all wind turbines are basically the same, he suggests general environmental impact assessments (EIA) and eliminating the need for a separate EIA for each project. Briones says that the Philippines is still hounded by challenges such as capacity allocation to location, site selection including geography, topography, wind, and resource, land clearance, suitable policy framework, wind turbine generator (WTG) technology, and power evaluation up to the grid. According to her, there is a need for long-term perspectives in policies which will provide greater regulatory and policy certainty to the investors and will help in attracting more investment in the state. Obviously, these challenges are normal for any growing market, and the general forecast for the Asian wind market remains to be a positive one. It is also pretty clear that whilst offshore is gaining all the buzz in Taiwan, most countries in Asia are focussed on maximising their potential via onshore wind power.


ceo INTERVIEW

GE Power Services eyes more gas in APAC In a one-on-one interview with Asian Power, Global CEO Scott Strazik firmly believes natural gas is a necessary component to the region’s energy portfolio moving forward. What are the trends globally and regionally that are driving power generation at the moment? I think you look at Asia and there’s repowering from nuclear power today. Taiwan (and) Korea has two good examples that we think are opportunities for us with new gas units as nuclear is less a priority. So you’ve got the economic growth in ASEAN that has a need for more power and more output and one that we think we can support and grow. And then, depending on countries like Japan as an example, gas still is expensive so efficiency is really important. Every opportunity we have to insert new generations of technology that create opportunities there to consume less fuel in a high fuel environment is one in which we think we can support the market our customers and grow our business. I think Asia more than maybe other regions. We talk about power density and I think that’s where gas is so critical. If you compare many parts of Asia to the Midwest of the United States, their power density needs in Asia because of the size of the population and the power people density in the region means they need a lot of power in a small footprint. That’s one of gas’s biggest differentiating actors.

proximity to Belfort, France – one of our largest gas turbine factories and a very open and supportive government in Switzerland that has an export credit agency (and) is very supportive of our growth in helping us on some new unit opportunities to finance projects played a part.

Global CEO Scott Strazik

A

s the surge of renewables continues to be coupled with the weakening of traditional power markets, GE Power Services Global CEO Scott Strazik positions the energy source as the “perfect instrument” that can complement Asia’s evolving energy mix. Approaching seven months into his new role as Global CEO of GE’s Power Services department, Strazik started his GE career as part of the multinational’s Financial Management Program under GE Capital, which led to more roles under GE Corporate and GE Power. Strazik also held separate CFO positions for GE Aviation’s Commercial Engine Operations in 2011 and GE’s Gas Power Systems business in 2016. Asian Power sat down with Strazik in GE’s Power Services Headquarters in Baden, Switzerland, who elaborated on key benefits of the acquisition of Alstom’s power and grid businesses, why Power Services’ Cross Fleet solution is ahead of the competition, and his perspective on finding opportunities as energy demands continue to grow in Asia. What was the psychology behind headquartering in Baden? Central location, big acquisition, a lot of expertise [and] a lot of capability. A lot of where our growth was going to come was with expanding our balance of plant capabilities, our projects capability and Alstom provided a lot of that. The

Considering how particular competitors have similar technologies, how do you intend to differentiate yourselves? This is all about adapting their technology and making it our own – to take those units, take our IP, take our commercial capabilities and our balance of plant capabilities and give a different solution. So we don’t want to simply service other OEM’s equipment. We want to take that equipment, use our background (and) leverage a lot of what Alstom understood. So as an example, Alstom was the first to engineer the SGT-800. We have a lot of domain expertise of SGT-800. They we’re able to now marry with a lot of our material sciences with the HA [gas turbine] into a compelling solution that we think our customers are really going to benefit from. So I don’t know if it’s like our competition and what they do. I feel like this is a unique offering with a unique capability because I don’t think the others have that domain context and strength with material sciences that together, is giving us an opportunity to really make the fleet our own. How does the unique solutions fit with GE’s plan to lead a transition to a mix of traditional power sources and emerging ones like renewables? We’ve got a 7,500 unit install base. Any opportunity we have to grow that install base and expand the footprint of opportunities to sell our solutions we’re interested in kind of that investment return equation where it makes sense for our customers and for ourselves. We evaluated Cross Fleet extensively three years ago when the business team launched the program. I extensively evaluated that when I started in this job in October of last year through both of those evaluations. We concluded – both the prior leadership team and myself – that there is a compelling case here for our customers and in a market that we think we can support them and grow our business in the process and that’s exactly what we’re going to do.

Gas is the perfect intermittent and support that can ramp up and down as other forms of power are less predictable.

You’re very much confident that gas is positioned highly in terms of the evolving energy mix globally. Could you elaborate why this is so? Power density is a good start – that’s for new builds. Two, as renewables continues to grow there’s going to have to be a complimentary power source to support that. And gas is the perfect intermittent and support for that can ramp up and ramp down as other forms of power are less predictable. Three, gas and the supply of gas globally is something that is only going to become more plentiful and LNG (liquefied natural gas) is going to become more plentiful and as that happens that’s going to create a more competitive landscape for gas to support a diversified grid. And a lot of countries in the world, including Asia, that are three macro themes that make sense. Plus on a relative basis, it’s good for the environment and the mix of where things go. So I think there’s a lot of reasons to like gas relative to the portfolio of options that markets have to give us a lot of confidence that gas is part of many if not most grids’ future. ASIAN POWER 21


ASIAN POWER UTILITY FORUM: JAKARTA

Indonesia has been considering alternative solutions over traditional methods--but will it work?

Indonesia struggles to address power woes The government has been moving the goalposts and reducing initial targets.

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lmost nine million families in Indonesia still lurk in the dark with no access to electricity, despite rapid economic and population growth in the world’s largest archipelago. In fact, the country has already lagged behind its 35GW target of new installations for 2019, pushing back hopes that 4,000 islands will soon be rescued from a widespread electricity crisis. Perusahaan Listrik Negara (PLN), the country’s primary power distributor, has embarked on several ambitious projects to catch up to changes in technology as well as the country’s growing power demand, but stakeholders and analysts believe that a closer look could be taken. Outside of the PLN universe, independent power producers (IPPs) are also active in finding opportunities to meet halfway and provide services to the country’s underserved power market. Between 2017 and 2026, PLN estimated electricity demand growth to be around 8.4%. From 35GW, the government has pared down additional power capacity to only 27GW by 2019 and 77GW by 2026. However, the 77GW slated for 2026 was recently further reduced to only 55GW, of which 6.6GW is renewables. Brett Mattes, director, Numada, said that government’s goal setting has not been based on any strategy. While it is normal to set targets based on assumptions of economic growth and demand growth, Mattes emphasised that there should be an overarching framework for making decisions. According to him, the 8.4% demand growth was actually 4% and only 2% in certain parts of the country. Heru Dewanto, president and director Cirebon Power, said that electricity demand has grown at an average of 7.1% per year since the 2000s. With some success made in the 35 GW program, Dewanto noted that Indonesia’s ranking in the ease of getting electricity rose from 101st in 2014 to 38th in 2018. Furthermore, greater efficiency may be expected within Indonesia’s power sector as digitalisation efforts make headlines. Warsono Martono, head, Division of Engineering, PLN, said 22 ASIAN POWER

Over the next 10 years, I think there’s going to be tremendous opportunities where solar plus battery storage could replace expensive coal with low cost.

that PLN is considering the use of predictive analytics to increase connectivity, efficiency, and emission opacity in the grid. Old guys, new strategies Gas continues to be one of the major players in Indonesia, with natural power gas generation expected to reach 26.7% of the overall mix by 2026 from just 25.6% today. James Ooi, partner, The Lantau Group, said that decision makers should be able to define the spectrum in the role of gas and provide room for flexibility in its application. “Small scale LNG is particularly relevant here in Indonesia, because of the policy focus and the resource benefit for the development of that. When we talk about the energy challenge here, we are talking about the production of key energy solutions to meet the specific demand that presents itself. From the power perspective, we have ancillary services, reliability challenges, and this is where some of the cutting edge technology coming in, super conducting and extra storage,” he added. Andi Asmir, vice-president, Government Relations, Energi Nusantara Merah Putih, said that the government and LNG companies in Indonesia have been considering alternative solutions over traditional methods, but a common framework is one of the biggest challenges for new strategies such as integrating the LNG terminal and the powerplant with the power and direct supply to industry. Indonesia’s power sector could also use a little help from battery storage, which provides benefits by enabling low-emission technologies to increase their shares in the generation mix. For this to be effective, Ooi said that a significant overbuild of lowCF capacity and development of energy storage technologies is needed to allow significant share of energy to come from low CF sources. “If 1 MW of technology A has CF of 20% to supply 1 MW of firm output 5 MW of technology, a need to be installed paired


ASIAN POWER UTILITY FORUM: JAKARTA

Coal is still very competitive despite tigther financing rules

with storage able to absorb 4 MW of excess generation and enough capacity to supply 1 MW for 80% of the time horizon (19.2 MWh). In cost perspective, technology A (plus 4MW/19.2 MWh of storage) must be more than 5 times cheaper (per kW) than conventional source in order to be able to supply 100% of the energy needs,” Ooi illustrated. Phoumin Han, energy economist, Economic Research Institute for ASEAN and East Asia, said that while LNG could definitely be counted on to bring prices down, coal is still very competitive in terms of power generation. However, the method of financing coal power plants remains a big issue in Indonesia, amidst tighter regulation in the OECD preventing member countries to deploy their projects in the ASEAN region. This leaves the region with China, Japan, and Korea. “If OECD public financing on coal power plants come to reduce or halt due to stringent criteria or emission regulation, China will have a huge opportunity to fill the gap of providing public financing to foreign coal power plants and to expand the export of Chinese manufactured boilers and steam turbines to developing countries,” Han added. ASEAN as a group may have to work on common environmental standards as advanced countries such as Germany, Korea, and Japan, where clean coal technology is mandatory, have higher emission standards. Han said that higher standards, coupled with effective enforcement, may push investors to select more advanced technologies, especially the ultra-supercritical technology for CPPs. He added that it is also important to focus on the participation of the community in order for them to understand the risks and demand better technology. “Storage alone is not a standalone solution. It depends on partnerships with renewable energy and the RE integration in the entire system. As we all know, renewable energy has huge marginal costs, displace inflexible and more expensive units, if it’s allowed to. The more difficult challenge is when it displaces the coals and thermal units, it also needs to be more flexible. If you’re backing down large commitment units, this is where the flexibility equation comes in. Renewable energy alone is not going to be able to fulfill all of those. That is one of the strongest advocacies for gas application for countries like Indonesia. Small scale LNG fulfills that need, but now we’ve got batteries. Exactly how these batteries compete, can we define the role of batteries, is it a national supplement?” Ooi said. Where is RE? Indonesia is never wanting for renewable energy sources, given its abundant natural resources. But is the national electricity strategy friendly enough for their growth? Miroslav Dijakovic, director, Business Development for Indonesia, Solar Philippines, remains optimistic about the growth of renewable energy in the country, solar particularly. Dijakovic pointed out that while the development of solar

There is plenty of opportunity with the Indonesian power sector expected to grow by 250%.

power is very limited at 80MW, there is plenty of opportunity with the Indonesian power sector expected to grow by 250% from 59GW to 200GW by 2040. According to him, Indonesia should install 28GW of small scale PV, up from around 30MW in 2016. At present, interest in commercial PV has increased, but the development continues to lag. “Until 2031 PV (only) is expected to be the dominant product in the market, due to the high costs of storage. However from 2031, the uptake of PV (with storage) begins to gather pace, as storage prices fall and payback periods contract. Some 1.8GW/4.5GWh of battery storage is projected to be installed behind - the - meter by 2040 representing only 15% of the total flexible capacity in the system,” he said. Dijakovic added that MBCS globally committed to reduce carbon emissions and add renewable power generation to their facilities are starting to tender projects. Most of them are interested in PPAs or operational leases, but not really interested in becoming owners. Furthermore, they are asking developers to match PLN tariffs. Tony Segadelli, president, OWL, emphasised the need for hybrid power generation to address Indonesia’s power crisis and ensure that traditional power sources will continue to take a piece of the pie. However, Segadelli said that it is important for the hybrid plant developer to determine the right type and size of all forms of generation for the plant, in order to keep the grid steady. “Eighteen months ago, the market without the involvement of the central government regulations has managed to allocate the risk correctly and respond to the market situation at the time. The govt has a role to play in terms of encouraging development in the renewables sector. But in areas where the market is surely mature, maybe the government can inhibit,” said Low Kian Min, chief development officer, JERA Energy Development Asia. Collaboration is key Nonetheless, IPPs are bent on working well with PLN, should they wish to survive the country’s challenging power sector. Jaya Wahono, founder and CEO, Clean Power Indonesia, said that as a business, there is no other alternative in Indonesia than to find ways to work out a collaboration with PLN. At present, Clean Power Indonesia is working with PLN in Mentawai to bring alternative sources of power to the community, while reducing PLN’s costs in deploying diesel gensets. According to Mates, there is an enormous opportunity for the government and the private producers to go from the big system and Java or Sumatra thinking of PLN and start focusing on small scale opportunities. There may not be a single answer, but collaborative projects may begin with geothermal energy. Mates said that Indonesia is extraordinarily placed in the globe, with the half of the world’s geothermal power potential focused in the country. Ooi cautioned that as more and more renewables are introduced, more and more flexibility will be needed and

High time to start focussing on smaller islands for bigger opportunities ASIAN POWER 23


ASIAN POWER UTILITY FORUM: JAKARTA

Need for more flexible units are driven by new renewable sources

sometimes those costs of flexibility are not captured. At present, the lifecycle costs of a solar or wind solution are not being assessed. He added that many new renewable resources are distinctly more variable and non-controllable, thus driving the need for more flexible units like gas turbines or batteries. However, batteries are a net load, not a generator, and thus result in the need for additional capacity. “When we think about new technologies, it is a high marginal cost proposition, intermittent, but designed to challenge some considerations to the penetration of how thermal energy behaves within those intermittencies. As more and more of this technology penetration occurs, it becomes harder and harder to operate or optimise the entry or penetration of all of these technologies,” Ooi added. However, the government must also have a national strategy in place, if any of these pockets of initiatives are to work out at all. Mates emphasised that demand is a function of many different things and the purpose of a national strategy is to enhance demand in most sectors and to create opportunity for suppliers to meet that demand, thereby generating economic activity and GDP growth. “It’s a numbers game, it’s short term and based on political cycles rather than long term strategic thinking. And it’s based on a number of assumptions, one of them is you have to keep costs or purchasing power parity across the archipelago for people. There is no issue with that. There are a number of other assumptions that come into this kind of planning for a 60m people. The government has a maturity of economy. If you measure it by electricity use, 1MW per year per person, in the OECD it is about 12, in Korea it is 11, Taiwan is 10. Do we have an aspiraton for improving the maturity of our economy? According to Wahono, the traditional nature of PLN allows them to explore alternative sources of energy that have not been deployed before. He added than PLN is risk averse when it comes to new ideas, so they typically ask private players where these ideas have been done before. Through their work on the ground, Wahono and his team learned that it is important to know how the local government and the locals are going to react. “We are somewhat getting the benefit of the political aspirations from the current government, they want to pursue more inclusive economics rather than focusing on Java and big cities. As a nation, we don’t have many success stories and working model for bringing electricity to rural communities,” Wahono said. It’s all about the money An attractive financing framework for the development of infrastructure may also help ease Indonesia’s power woes, and Han said innovative financing for developing nations such as Indonesia includes the flexibility of financing CCT from financing institutions (MDBs) by providing long term loan (at 24 ASIAN POWER

If OECD public financing on coal power plants come to reduce or halt due to stringent criteria or emission regulation, China will have a huge opportunity to fill the gap.

least 20 years) with low interest rate. “When financing large infrastructure such as CCT plant in developing countries, the financing framework is not favorable (high interest rate and short terms loan). Developing countries also seem to relax on the environmental regulation/standard, and its enforcement remains weak,” Han said. Financing risks may also be mitigated through possible blended financing using both commercial (bank institutions) and private financing. At present, financing normally takes up to a year after the PPA signature, one of the reasons why the 35GW due for 2019 will not be completed as planned. Asmir added that the 35GW is not very good growth. It is important for the sector to be mature enough to receive the capacity, and PLN infrastructure is not yet ready to receive the power. In fact, the present PLN infrastructure can only receive a maximum of 300MW, 700MW less than the expected 1000MW capacity in Java and western Indonesia. According to him, the government and the private stakeholders should discuss their specific roles, such as the delivery of the transmission business and the importance of expanding industrial areas. Dijakovic noted that multinational companies across the globe who are committed to reduce carbon emissions and to add renewable power generation to their facilities are starting to tender the projects. According to him, they are mostly interested in PPAs or operational leases, but are not interested in owning. They have also been asking developers to match PLN’s tariffs. In April, HSBC announced that it would end financing to coal power stations, except for Indonesia, Bangladesh, and Vietnam. The bank said that at present, there is no viable alternative to coal in these three countries and financing would go on for five years should the status quo remain. “If OECD public financing on coal power plants come to reduce or halt due to stringent criteria or emission regulation, China will have a huge opportunity to fill the gap of providing public financing to foreign coal power plants and to expand the export of Chinese manufactured boilers and steam turbines to developing countries,” Han added. Meanwhile, the International Finance Corporation (IFC) may extend a $320m loan to Bajradaya Sentranusa (BDSN) for long-term debt and sustainable capital structure. BDSN operates Asahan 1, a 180MW run-of-rive hydropower plant in North Sumatera. “If OECD public financing on coal power plants come to reduce or halt due to stringent criteria or emission regulation, China will have a huge opportunity to fill the gap of providing public financing to foreign coal power plants and to expand the export of Chinese manufactured boilers and steam turbines to developing countries.This is because emerging Asia will largely depend on coal to meet rapidly increasing demand and to keep robust economic growth, arguing that developed countries were not constrained by any limits at the time they were building their economic freedom,” Han said.

An attractive financing framework for infrastructure will be of help


ASIAN POWER UTILITY FORUM: KUALA LUMPUR

Stakeholders are entering the demand and supply sides in droves

High time to rethink Malaysia’s energy mix How will a gas-dominated power sector accommodate highly intermittent renewable energy sources?

W

hen Malaysia revealed its renewable energy targets for 2020, some rejoiced while others thought the government was too ambitious. Aiming an estimated 1,000MW renewable grid-connected capacity by 2020, the country’s increasingly complex power sector and growing power demands combined with a robust economy have made it difficult for energy providers and stakeholders to come to an agreement on the right steps forward. The year 2050 also defines make or break for renewables in Malaysia’s energy mix, continually posing a challenge to the Malaysian government to meet their short- and long-term renewables targets. Mike Thomas, partner, Lantau group said that the electricity sector is being challenged by a complex mix of innovation, market dynamics, and legacy and regulatory factors. As a result, the sector continues to experience an imbalance, thereby opening more opportunities for energy storage to enter. Challenges do not seem to faze energy players in the country, as pockets of initiatives continue to spring up in the peninsula, hoping to push the sector closer to reducing energy poverty and ensuring energy efficiency across the board. However, Thomas cautions that no one seems to have the right model, with everyone groping and grasping for several arrangements as the market continues to change. As fewer stakeholders are satisfied with the pure vertically integrated model, more market stakeholders are placing their bets on what they believe could be the solution. After achieving 22% of renewable energy usage in 2017, Malaysia is expected to bank on more renewables for its energy needs, eventually taking an even bigger share of the energy pie by 2030. For instance, the Ministry of Energy, Green Technology and Water (KeTTHA) targets to produce 2,500 MW from solar energy by 2020, a significant 10 % of the country’s energy requirements. However, coal will likely remain a dominant player in 26 ASIAN POWER

Gas market reforms will enable security of supply for Malaysia and that gas is the perfect partner to expedite growth of renewables.

Malaysia’s energy mix. In fact, in order to maintain current electricity prices, coal consumption is expected to grow in the short term as gas fuel subsidies find themselves reduced. Meanwhile, Rosman Hamzah, secretary general, Malaysian Gas Association, said that while gas is abundant and accessible in the peninsula, more needs to be done to encourage greater utilisation of gas in the power sector. He also said that gas market reforms will enable security of supply for Malaysia and that gas is the perfect partner to expedite growth of renewables. What’s going on? Stakeholders are entering the demand and supply sides in droves, from renewable energy developers to demand response providers, carrying with them new business models and the latest technology. Abdul Rahim Md Noh, group CEO, Nur Power said that digitalisation has drastically transformed the power sector, and has served to maintain the cost of power after prices have gone up unabated. With digitalisation moving the sector from using data for information to using data for optimisation, power providers are finding more ways to squeeze value and productivity out of dayto-day operations in the industry. Noh said that digitalisation has brought about plant-level digital infrastructure, advanced, software modelling, and advanced analytics. With advanced analytics, energy players are benefitting from better connectivity and reduced costs of smart devices and technologies. Thomas added that the power sector across the globe is seeing a surge in the number of options that they can take, from the ability to use competition to get lower prices from exposed suppliers to the option for “behind the meter” generation or cogeneration. Households and industries are also seeing expanded preferences for rooftop solar or Tesla batteries and contracting for renewable energy, respectively. Malaysia has also seen more generous feed-in-tariffs and more


ASIAN POWER UTILITY FORUM: KUALA LUMPUR

The energy market have long been out of sync in Malaysia

aggressive renewable portfolio standards. It may seem that the power sector has generated much easier exploits, said Thomas, and more stakeholders are using distributed energy resources (DERs) to avoid paying for their share of the grid. Likewise, they are now able to cherrypick profitable customers, exploit market mechanisms, and practice value shifting. “The energy market and the environmental and technology agenda have long been out of sync. There are higher financial risk to shareholders, greater risk of blackouts. Few fully understand these trends and their implications. There are too many conflicting messages from competing stakeholders; tariffs are too political and do not respond to changing conditions or risks; and policies may be developed without a realistic view as to what they will cost or what impact they will have. Battery storage is part of the solution, but the business case is (currently) strongest as a “fixer” of severe imbalances,” Thomas added. William Phang, director, ESB International said that Malaysia’s power sector can certainly learn from lessons in Europe. He said whether players like it or not, technology is coming and it will disrupt the way that stakeholders used to do business, especially in the utilities space. Digital dominance Market proliferation of smart meters, smart appliances, batteries, utility-scale PV, and sensors has made digitalisation a lot more accessible to the energy sector compared to other industries, and data analytics has proven helpful in developing more efficient, stable, and sustainable solutions. Noh said that digitalisation has made it easier for energy players to measure voltage, current flow, power factor, reactive power, real power, load profile, and power quality. Data analytics helps generate load flow calculations, minimise frequency variations, predict load profiles, predict generation availability, calculate least fuel cost, schedule online generation contribution, predictive load flow calculations, and minimise transmission losses, among others. “Blockchain technology, initially intended for Bitcoin, has taken the world by storm. ESB works with startups and embraces technology. Understanding the way the market works allows us to include it at the later stages. As a utility, we put a lot of investment in innovation. We also look at blockchain technology for storing so-called system information between substations. That is something that is worth exploring, because we do not have a centralised way of storing information. That needs to be well thought through because we are talking about security of supply and privacy,” Phang added. In terms of utilising blockchain technology, Thomas cautioned that it is important to understand that blockchain is but a tool that the government needs to fully explore before using. Noh added that for blockchain, he doesn’t see anything coming sooner than five years in a highly-regulated Malaysian power

One of the issues that needs to be addressed is: Can a storage facility provide multiple services at once and lower its costs?

sector. “It’s an algorithm that allows you to do secure, decentralised transactions. Why would you want to have a secure transaction in the power sector? Maybe this customer has something they want to sell? Why does the customer think they have something they can sell in the first place? We have to figure out what it is that the customer has, why does the customer have it, and why is it valuable? Because blockchain can only monetise that. Blockchain enables the transaction, but why do we need it? Has the regulatory environment caught up? Government has to pay subsidies for something that they fully understand,” Thomas said. For Noh, it is important to understand that the regulator is not only looking at the economics of supply, but also at the security of the supply industry, which according to him is more important to the country. He believes that just because blockchain technology is here, does not mean that it must already be used. The focus should be on the supply to the whole country and who pays. In peninsular Malaysia, Tenaga Nasional Berhad (TNB) is investing heavily to keep the security of supply. “One of the issues that needs to be addressed is: Can a storage facility provide multiple services at once and lower its costs? Regulatory developments hint that utility-scale storage facilities may be required to provide single service only – but the jury is still out,” Thomas added. RE is key With climate change turning into a global crisis, Dr. Wei-nee Chen, chief corporate officer, Sustainable Energy Development Authority (SEDA) Malaysia, said that the future of energy must be decarbonised, democratised, deregulated, decentralised, distributed, and digitised. She said that in Malaysia, the future may be crafted in this direction through two key strategies: the Renewable Energy Transitions Roadmap (RETR) 2050, with an estimated completion in the last quarter of 2019, and the Energy Efficiency and Conservation Act (EECA), with the draft ready by end of this year. “Industry here in Malaysia is highly liberalised, but not in terms of the market. The electricity market is still highly regulated through the single buyer, that’s why there is a need for the energy trading platform to be under the sandbox. If the sandbox application runs successfully, there will be very good reason why we should slowly liberalise the electricity market. This will greatly help scale up renewables,” Chen added. Judging from the uptake of solar PV in the country, Chen said Malaysia could be a global leading Li-ion battery manufacturing country. Across the globe, such countries can only be counted by the handful, and Malaysia is well placed to develop good prototypes for export quality. “For peaking capacity, solar is doing pretty good, if that’s what you really need. Then you need some flexible gas, but not a particular amount, you need the infrastructure. Most of Malaysia

Industry in Malaysia is highly liberalised but not in market terms ASIAN POWER 27


ASIAN POWER UTILITY FORUM: KUALA LUMPUR megawatts from your system. So basically you need to find ways to curtail this,” Hamzah said. There have also been various developments in the LNG space. According to Hamzah, they are no longer relying on a single entry point in Malaysia, as players can actually bring in LNG into Sungai Udang and Pengarang, along with the connection to Thailand. He added that gas supplied is no longer an issue, basically the introduction of the gas terminal in Sungai Udang and Pengarang opens third party access. Previously, only Petronas and Gas Malaysia Berhad were the suppliers, now since January 2017, Malaysia has opened up the market so anybody in the country can sell gas. Hamzah reported that according to the International Gas Union (IGU), there are several measures needed to realise the full potential of gas as an effective partner for renewables. Among others, policies must reflect the full cost of carbon emissions, including their costs to health care. IGU also emphasised the need for well-designed capacity remuneration mechanisms (CRMs) for natural gas power generation, especially in case of rapid deployment of renewable energies. While gas makes up much of the energy market in Malaysia, coal comes in a close second. Chen said that it may seem that fossil fuels are depleting in terms of extraction, but the world still has enough coal to last another 500 years. In fact, barring hydropower from the energy mix leaves almost nothing except for a thin share of biofuels and solar PV. The traditional players still dominate Malaysia’s energy mix. By 2020, coal-fired electricity is expected to make up almost half of total generation capacity compared to just a little over 30% today. Despite the aggressive drive for renewables, Malaysia’s coal consumption could reach 36.9 million metric tonnes in 2020, 73% more than the coal consumed at present.

Existence of the LNG imports are constrained

is advantaged in that sense because you are ahead of the curve in LNG imports, among other things, there’s more of a pricing issue here. But in other ASEAN countries, existence of the LNG imports are constrained, it pushes you to solar and oil as the flexible thing,” Thomas said. Meanwhile, Leandro Leviste, CEO of Solar Philippines, Inc., said that solar will start by displacing more expensive peak and mid-merit (2018-2021), and by the time that is completed, will supply reliable baseload power (2022 onwards) and demand growth. This is in time for when additional supply is needed, adding storage hours as costs fall while delivering reliable power at consistently low cost. “To give Malaysia its credit, it actually has the best PV policy in the region in so far as the Philippines has absolutely no PV policy at the moment. But it is saving grace that it has the most liberalised market so we don’t need a contract to sell solar. Or we can sell some tenders that do not specify technologies. Malaysia tenders are much much more efficient and faster. I think it’s a better way to go than the feed-in-tariffs in Vietnam right now,” Leviste said. On the other hand, he said that low-cost renewables will depress market prices, stranding all fuel-based plants, as solar comes to supply the majority of the energy mix. According to him, this will happen in the Philippines on its own through retail competition and open access (RCOA) and distributed generation. As a result, power companies in the neighbouring ASEAN country will have the choice whether to participate in this transition or be rendered obsolete by the process. “The feasibility of solar and storage is a question of cost, not capability. Solar-plus storage is already cheaper than LNG at today’s prices, and cheaper than coal as baseload at $150-200/ kWh. Costs have fallen from $1000/kWh in 2010 to $250/kWh in 2018, and are expected to halve over the next five years,” he added. Traditional players According to Hamzah, where renewable energy fails because of its intermittent nature, gas is king. He said that it is in fact cheaper to extract gas underground than to have solar storage at current pricing. However, going into the future, he said that the prices of batteries will definitely go down. At current pricing however, gas is still the cheaper solution. Additionally, since gas reacts very quickly to fluctuations in the grid, it can basically cover any shortfall that renewable energy has in terms of their intermittency when providing electricity in the system. Malaysia, being the third topmost source of LNG in the world, must tap on gas to stabilise its power sector. “We have nothing against solar power, in fact we support solar power. However, the issue is still the intermittency, same with wind. If a cloud passes over the solar panel, you see a drop in the capacity. The drop is sudden, within seconds you lose a few 28 ASIAN POWER

It may seem that fossil fuels are depleting in terms of extraction, but the world still has enough coal to last another 500 years

Battling barriers Anything that saves money behind the meter in Kuala Lumpur is worth less than it is in other cities such as Sydney and Manila. Thomas noted that from an avoidant cost perspective, peninsular Malaysia is behind the curve, with sen per kWh close to or less than 50 kWh per 950 kWh per month. In fact, commercial and industrial tariffs in Kuala Lumpur are higher than domestic tariffs, a situation that may also be found in Beijing, Taipei, Hanoi, and Bangkok. Several issues also particularly ring true for almost all sectors across the region. “Despite compelling economics, politics remains the main barrier for greater solar adoption. In the Philippines, utility tenders are rigged to prohibit other technologies from competing for a given requirement. Winners are determined before bids, and consumers effectively subsidize expensive coal, gas, and diesel,” Leviste said. Meanwhile, Chen said that there are actually numerous options for increasing flexibility in any power system.

There are actually numerous options for increasing flexibility in any power system


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OPINION around the world, perhaps most notably Alastair Duffy & Rhesa Janubas countries in the United States, where close to 30 states have

Renewable Portfolio Standards to come to the Philippines

I

n December 2017, following nearly a decade of delay, the Philippine Department of Energy (DOE) promulgated the rules for a Renewable Portfolio Standards (RPS) scheme. This is to be coupled with a Renewable Energy Market (REM or RE Market), the rules for which are yet to be finalised. Long delays have been a hallmark of electricity reforms in the Philippines, affecting many of the programs mandated by the 2001 Electric Power Industry Reform Act, or the 2008 Renewable Energy Act. The RPS and REM are amongst the last remaining programs that have not yet been at least partially implemented. Benefits to electricity consumers Although RE’s global growth has brought environmental, energy security, and — increasingly — cost benefits to electricity consumers around the world, the current DOE, under the Duterte administration, is not actively favouring RE, but rather touts itself as

T

he future of offshore wind energy will combine the application of global experience and local expertise to deliver projects tailored to the needs of the market. Offshore wind success has lately been shaped by massive zero-subsidy projects. Last year, Germany awarded subsidy-free developments totalling 1.38GW to Orsted and EnBW, and in the Netherlands Vattenfall’s 700MW project will be the world’s first subsidy-free project if it is connected to the grid by its target date of 2022. These examples show how experience across the offshore wind industry has been successfully applied to propose subsidy-free projects adapted to particular market circumstances. Away from northern Europe, however, emerging offshore wind markets are set to rapidly shake up the sector in the coming years. Foremost amongst these is Taiwan, which aims to build in six years an offshore wind capacity equivalent to that which it took the UK 18 years to achieve. If successful, Taiwan will catapult into the top 10 countries in terms of offshore capacity by 2025. However, this remains a big “if,” and the Taiwanese market will need to overcome challenges of localisation of what is essentially European experience at a rapid pace to succeed. Despite this, Taiwan has the advantage of drawing on advancements in technology, finance and competitive landscapes that Europe had to develop over many years. 30 ASIAN POWER

being “technology neutral” So will the new RPS be effective at increasing the amount of new RE being developed in the Philippines? Along with Feed-in Tariffs and others, RPS with an RE Market is a well-known mechanism for facilitating renewable energy developments and is used in various markets around the world. Together, they represent a market-based policy that works by setting a minimum proportion of electricity sales/consumption that must be sourced from RE. Renewable Energy Certificates (RECs) are allocated to generation from RE plants, and can be sold in the RE Market to electricity suppliers/ retailers, who use them to bridge any gap they may have between the proportion they source from RE (via PPAs or from their own generators) and the minimum proportion required under the RPS. The RPS minimum can be increased over time according to government RE targets. RPS schemes have been implemented in

adopted RPS targets. Most of these policies have been in place for at least 10 years and therefore offer great material for studying the effect of RPS on RE growth. According to a 2017 study by the Lawrence Berkeley National Laboratory, RPS requirements have driven around half of total US RE growth since 2000, albeit not a strict attribution as some of this growth would have occurred even without RPS; other drivers of RE growth include cost declines and other incentives. What RPS means for RE in the Philippines Pöyry’s initial analysis indicates that a 1% annual increment will only result in an overall RE share of generation of around 23% in 2030, which is well below the aspirational target of 35%, and less than the RE share in 2017. Continuation of a 1% increment would also mean that the RPS requirement would not be the direct cause of any new RE build until around 2029 or 2030, even assuming almost no new RE additions come in for other reasons, which seems unrealistic given how competitive solar PV has become. In order for the RPS to require an RE share of 35% in 2030, the annual incremental percentage will have to be raised significantly higher than the initially set annual increment of 1%. If this is left to the next administration after the next elections in 2022, they would need to increase the annual increment to an ambitious 4%.

RV Ahilan

Taiwan set to join offshore wind’s top table by 2025 In particular, its Feed-in-Tariff of US$200/MWh has caught the attention of international offshore wind players, and relationships that will secure the successful transfer of experience and best practices from the established offshore markets are being forged between local Taiwanese companies and corresponding international players on a regular basis. Contracting issues But if the Taiwanese offshore market is to achieve its full potential – and realise its ambitious targets – then it will need to address not only Taiwanspecific issues such as typhoons and earthquakes, but also incorporate the benefits of European experience in three key areas: regulatory and contracting; financing; and construction, operations and maintenance. In addition to its strong FiT offering, Taiwan is also accelerating towards auction models similar to those that have recently been adopted in Europe

and which have had a dramatic impact on cost reduction. Indeed, all capacity installation after 2020 will be awarded on the basis of an auction model. Drawing on the key learnings from Europe, Taiwan’s offshore industry will require clarity of tariff – both in amount and duration – and confidence that these tariffs will not be reneged on further down the line. Regulations related to turbine design and construction must also be transparent; European projects witnessed a number of delays in construction as a result of piling noise restrictions that were accepted at the time but later appeared to be overly stringent. Whilst there has been significant interest from investors in Taiwan’s fledgling offshore market, there is a need for developers to create compelling business propositions that bring together equity investors, advisors and contractors at an early stage so that appropriate debt can be raised.


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OPINION

ERIC HO

Solar power development in Southeast Asia

A

s renewables markets mature, renewables investors are looking to new markets for their next source of growth. Solar photovoltaic (PV) generation has great potential and has been the most attractive renewable energy source amongst the Southeast Asian nations. Annual solar radiation levels in the region ranges from 1,460 to 1,900 kWh/m2/per year. Growth prospects are tremendous in Southeast Asia with a combination of fast-growing economies with resulting investment in manufacturing, transportation and energy infrastructure, rapid growth in electricity demand and good solar resource. Singapore’s appeal In 2015, installed capacity of solar power in Singapore was almost 60MWp as it doubled at the end of 2016 to 126MWp. Singapore plans to install 350MWp by 2020, increasing the generation threshold to 600MWac based on the largest

I

was invited to speak at and attend the World Sustainable Development Summit in Delhi in February this year, organized by TERI. While my presence was to talk on the greening of the PV supply chain, I had the possibility to listen to some other presentations. On one of them was held in one of the auditorium of the India Habitat center. I sat in the last row and after the session, I had a question to make. Actually I tried and tried, raising my hand, but was not given the chance. I was pretty annoyed by it. We may have had a breakthrough on really achieving some sustainability progress in the world! This session had as speakers Mr. Pawan Chamling, the Chief Minister of Sikkim, Mr. Lyonpo Lekey Dorji, the Minster of Economic Affairs from Bhutan, Mr. Laurent Fabius, former President of the COP 21, Ms Christine St. Pierre, Minister of International relations from Quebec and Mr. Ayaz Sayed-Khaiyum, attorney general and minister also from Fiji. Mr. Chamling was presented as being the longest ruling Chief Minister in India with more than 2 decades. This actually led my European mind to drift to an image of our long serving government officials, who are more than often clearly considered as being already lobby’s advocates rather than responsible politicians. Mr. Chamling revealed as nothing of such. I understood his long serving term by the goals achieved by Sikkim: - Ten minutes to earth – every citizen of Sikkim has to dedicate ten minutes of their time in a year in plantation of tree for the protection of 32 ASIAN POWER

available reserve unit in the system. The city-state has made significant investments in research and innovation around energy sustainability. In 2016, Singapore announced more than US$ 700 million of new public-sector R&D funding for the next five years for Urban Solutions and Sustainability. This funding is expected to strengthen Singapore’s innovation capacity in areas such as clean energy, smart grids and energy storage. The potential for urban solar plants and floating solar on its precious reservoirs are presently being tested. A project to accommodate more intermittent sources in energy storage for the efficient consumption of energy is also being studied in a microgrid system. Singapore expects to fully liberalise its electricity market in 2018 allowing all consumers including households to choose their electricity suppliers. Instead of direct subsidies to spur solar PV installation, Singapore offers competitive, marketdriven tariffs, together with measured policies to

promote a competitive solar market. Consumers with embedded intermittent generation sources are allowed to receive ‘net-settlement’ of the energy component i.e. consumers are either charged for their net consumption or paid the energy price for their net generation within each trading period. The average energy prices in June 2017 was about US$ 61per MWh. Net metering scheme in Malaysia Malaysia’s overarching policy framework for clean energy development has provided a strong foundation for significant deployment of renewable energy and energy efficiency. It adopted a renewable energy feed-in tariff (FiT) mechanism under the country’s 2011 Renewable Energy Act and revised the solar FiT with a degression approach in 2014 in response to falling panel price and changing market conditions. The net metering scheme (NEM) was introduced in 2016 with 500MW NEM targeted in 2020 in Peninsular Malaysia and Sabah. With the NEM in place, consumers can generate their own electricity with one meter installed and sell excess power to the national utilities. The country presently has 338MW solar PV capacity installed and targets 1,356MW by 2020. Under its FiT scheme, the installed capacity increased modestly by about 30% each year in 2015 and 2016, to 335MW at the end of 2016. Basic FiT in 2017 for installation below 72 kW is 52.18 sen/ kWh (12.17 US¢/kWh) with a potential bonus FiT of up to 34.55 sen/kWh (8.06 US¢/kWh).

Agostinho Garcia

Why being in the last row is not good for our planet

the environment. State green mission - avenue plantation and beautification of all vacant and waste lands - Paryavaran mahotsava – Environment festival - Organic farming – the Chief Minister was particularly excited that Sikkim became the first organic state in India and I would say in the world! - Environment education in school - State’s forest cover increase - ban on plastics in 2002 - Ban on grazing in reserved forests - Ban on use of firecrackers in 2014 - Ban on burning of wastes and on use of plastic bottles - and many more (the book 1994-2016: Environmental Initiatives of the Hon’ble Chief Minister of Sikkim Shri Pawan Chamling is a good example for those interested in what this Indian state has achieved) His speech was followed by the speaker from Bhutan. Not less impressive:

- Gross National Happiness (GNH) philosophy, which considers the level of happiness of its citizens as an indicator of prosperity and progress rather than the GDP. - Nature and biodiversity are not only a source of food and economic benefits in Bhutan, but also important cultural and spiritual values. - These values are at the same time reinforced by the Constitution requiring the country to maintain 60 percent of its forest coverage at all times and other commitments to remain carbon neutral and pursue an environmentally friendly development path Mr. Laurent Fabius, Mrs Christine did speak, as well as the Minister from Fiji. None of them actually made any difference. Maybe the audience did appreciate it, but the fact is that none said anything new, relevant or actually had lessons or good practices to share. The earlier two beacons, giants among the other speakers, really brought examples that all countries in the world


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