ISSUE 83 | DISPLAY TO 31 OCTOBER 2017 | www.asian-power.com | A Charlton Media Group publication
THE MAN BEHIND SINGAPORE’S FIRST LNG PLANT PACIFICLIGHT’S CEO YU TAT MING SHARES HOW HIS COMPANY MAINTAINS SINGAPORE’S FIRST LNG-FIRED POWER PLANT AND HOW BEING FIRST CHALLENGES HIM
MAKE WAY FOR CHINA’S MEGA MERGERS INDONESIA TIGHTENS NOOSE ON IPPs MASSIVE BLACKOUT IN TAIWAN CASTS DOUBT ON ITS NUKE-FREE VOW OUTDATED POLICIES HOLD BACK MALAYSIA’S NUCLEAR AMBITION
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FROM THE EDITOR This issue is a special one for the Asian Power team as this will be making the rounds in one of the biggest power conferences in the region, the PowerGen Asia 2017. Please swing by Booth R39 so our teams can catch up with each other. We are looking forward to meet you not only at the PowerGen Asia, but also at the Asian Power Awards 2017. We are as excited as everyone is in anticipation of who will bag the awards.
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But before the merriments, let us take you through the sectoral issues we tackled in the magazine. We probed two countries that are on nuclear industry’s hot seats: Taiwan and Malaysia. Taiwan is currently under fire as a recent massive blackout crippled over 6 million households. With the rising doubts on its energy supply, was Taiwan right in ditching nuclear? Malaysia, on the other hand, has been toying with the idea of finally harnessing nuclear power. However, it has been decades since the country made its first step in realising this ambition, yet it’s still not close to making it happen. Find out what’s strongly holding Malaysia back in turning its nuclear ambition into reality. We also talked to experts about Indonesia’s recently released regulation on requiring power utilities to secure prior approval from the government if they want to implement changes to the boards of directors and commissioners. Is Indonesia tightening the noose too much? Check out what they think. Start turning the pages and enjoy!
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ASIAN POWER 1
Co-published corporate profile
Susan Peterson-Sturm, digital lead business unit power generation & water, ABB
ABB: Leading the digital way for Asia’s power companies Digitalisation is enabling power generators to turn industry challenges and complexity into opportunities
hen the Digital Lead of ABB’s power generation and water business, Susan Peterson-Sturm, met with power generators and original equipment manufacturers (OEM) during the technology firm’s global customer event in China last June, the conversations made her smile: Everyone wanted to inject digital fuel into their growth tanks. “These customers are keen to look at digital solutions as a means by which to scale their businesses,” she says. “Power generators want to better understand how to improve the flexibility and thermal efficiency of their plants to be more competitive, given current low power prices in China. OEMs participating in One Road, One Belt opportunities outside of China want to look at remote collaboration and virtual power plants to efficiently scale their businesses for global markets.” Digital is the solution Peterson-Sturm is often asked how digital (or the Internet of Things, IoT) will transform the power industry. She says that “The power industry is undergoing tremendous transformation. Digital is a tool successful power companies will leverage to thrive in this complex market.” She rattles off a few of the major changes her colleagues in the power industry have experienced over the past 20 years: power market deregulation, enforcement of more stringent environmental constraints, the creation of wholesale power markets and the addition of renewable generation resources. There is no shortage of challenges to solve. The result is a global power market in transformation, with traditional business value streams and asset utilization models being turned on their heads. Peterson-Sturm says, “At ABB we’re
2 ASIAN POWER
fleet, they ask? How can lessons learned from a recent forced outage be applied in operational and maintenance practices. Managing complexity: The third example Peterson-Sturm provides relates to enabling power companies in highly complex markets to adapt to new opportunities and business models, beyond traditional operation. “For example, distributed energy resources, like rooftop solar or even demand-side management have made it hard for traditional unit commitment or dispatching functions to respond to fluctuating load requirements quickly and profitably,” she says. “Power companies can use digital solutions to make more accurate forecasts with data from smart meters, create more profitable unit commitment and bidding decisions with neural network generation forecasting modules, and minimize labor and complexity by deploying advanced analytics that can aggregate forecasts from many small renewable resources into a larger virtual power plant’”
What are other keys to success? It starts at the top. Utilities are undergoing a “cultural shift” towards an information-based privileged to have partnered with the world’s digital economy - where primary processes leading utilities to develop, test and operate are digitalized - and moving away from the digital solutions that have allowed generators traditional business model that requires heavy to find new business models and thrive, despite investment in physical assets. In the face of market complexity.” this change, chief executives feel there is a real danger of getting left behind if they fail Problems ABB’s digital solutions solve to rally their organization to the new digital Knowledge and expertise retention: A key order. The drive from leadership is key to the challenge for those operating in mature power implementation of successful digital projects. markets in Asia is the retirement of experienced It is vital that there is a clear link between operations personnel, notably in Japan and any digital project and a company’s strategic Korea. For example, the ability to access both priorities. remote internal and external expertise is a huge Think big but start small. While it is vital enabler for these markets. ABB’s Collaborative to have a big-picture vision for digital, early Operations Centers provide infrastructure as adopters started with small projects and pilots a service, securely allowing that quickly delivered “Power generators tangible results. “Results experts outside the plant want to better to monitor performance, and success drive more support troubleshooting understand how to action and greater cultural and maintenance, and help improve the flexibility adoption of digital solutions optimize plant operation. on the plant floor.” With and thermal While Collaborative Operation the organization on board, efficiency of their Centers support improved larger and more ambitious plants, given current projects are easier to health and safety of workers and reduce the number of low power prices in execute. technical experts required It’s all about people, China.” to operate and maintain process and technology. plants, says Peterson-Sturm, Peterson-Sturm says “If Collaborative Operations companies do not make the Centers can also reduce operating costs. necessary changes to their business processes Improving operational practices: Another so that digital solutions can deliver results, challenge for those operating fleets of power they will be left with cool technology that plants is to ensure that best practices are never gets implemented”. We cannot afford applied and lessons learned are shared across to make our colleagues feel alienated or not plants. Leadership in many power companies part of the industry’s digital future. We need want to enhance operational visibility of key digital programs, projects and pilots to engage performance indicators across their fleets. They the right stakeholders, which extend beyond want the ability to “double click” into individual operations and often involve colleagues in plants or specific classes of equipment across information technology, compliance and finance. their fleets. How can the best practices of the In other words, remember to bring the right most efficient plant be implemented across the team along on the digital journey.”
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INterview 12 CEO The man behind Singapore’s 800MW LNG plant
FIRST 06 Does the feed-in tariff still fit Asian solar PV? 07 Mega mergers on the way 08 Indonesia’s tighter terms
Sector REport Southeast Asia’s solar industry thrives amidst dimming market expectations
COUNTRY REPORT: MALAYSIA Outdated regulations hamper Malaysia from making its nuclear ambition happen
ANALYSIS 26 How will Korea’s abandonment of nuclear power affect its energy sustainability?
28 China clamps down on coal-fired power utilities
10 Coal’s glory days may soon be over
30 Renewable Energy recipes II – feasible sites for PV projects
16 Expensive electricity could be looming over Indonesia
30 Back to the future? – A shakeup in industrial solar
18 How Thailand plans to beat peers in renewables growth
32 Solar power development in Southeast Asia? 32 Benefits of using Myanmar’s strategic environmental assessment
Published Bi-monthly on the Second week of the Month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533
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FIRST the International Renewable Energy Agency (IRENA) said in a report. “Auction schemes have benefited from the rapidly decreasing costs of renewable energy technologies, the increased number of project developers, their international exposure and know-how, and the considerable policy-design experience acquired over the last decade. When well designed, the price competition inherent to the auction scheme increases cost efficiency and allows price discovery of renewable energy-based electricity, avoiding potential windfall profits and underpayments,” stated IRENA.
REVAMP NUCLEAR RULES MALAYSIA
Jamal Khaer Ibrahim, MNPC
Asian Power caught up with Jamal Khaer Ibrahim, director for the Nuclear Power Programme Development at the Malaysia Nuclear Power Corporation (MNPC). Ibrahim is a nuclear engineer with over 30 years of professional experience with the Malaysian Nuclear Agency (Nuclear Malaysia), before assuming his current position at the MNPC in 2011. Is Malaysia ready for nuclear power? In terms of legislative and regulatory infrastructure for nuclear power development, Malaysia still needs to either revise and update its existing national nuclear legislation. This is the Atomic Energy Licensing Act of 1984 which needs to be a comprehensive nuclear law covering all aspects of the utilisation of atomic energy, including nuclear power generation. We can also put in place a separate new law for all aspects of nuclear power generation, which would then require the establishment of a new atomic energy regulatory commission or authority. How badly does Malaysia need to update its existing regulations for nuclear energy? Nevertheless, regardless of whether Malaysia proceeds with nuclear power generation, the existing nuclear legislation enacted more than 30 years ago will still need to be updated. We must accomplish this so we can take into account the evolution of the international nuclear governance framework based on various nuclear-related instruments adopted over the past three decades. There are now new conventions on early notification and assistance in case of nuclear accidents, and also on nuclear liability and supplementary compensation. There are new updates on nuclear safety and on radioactive waste and spent nuclear fuel management. There are new protocols on safeguards against the proliferation of nuclear weapons, and new or revised conventions on nuclear terrorism and physical protection of nuclear material and facilities arising from the clandestine nuclear weapons programme in certain countries, and the 2001 September 11 terrorist attacks. All these must be taken into account. In terms of public acceptance, two levels of public engagement still need to be undertaken. Firstly there should be an enhanced public engagement at the national level towards public acceptance of nuclear energy as a new additional energy option. This must thnen be followed by public engagement at the local level during the selection and qualification of suitable sites for the nuclear power plant. Definitely a long way to go for Malaysia. 6 ASIAN POWER
Shadows of doubt are cast on FiT’s sustainability
Does the feed-in tariff still fit Asian solar PV?
hen policymakers look into the future of solar photovoltaic (PV) development in Asia, the role of feed-in tariffs (FiTs) is slowly but surely becoming fuzzy as tender and auction schemes provide an attractive alternative. Benjamin Attia, global solar markets analyst at GTM Research, said there remove 49 national markets where tendering or auction schemes are in place were in May 2017, up from 32 in the second half of 2016. During the first five months of the year, 29 reverse auction or tender procurement programmes were launched or planned. Citing the recent spate of recordbreaking bid auctions such as a Chinese-Japanese consortium’s bid to build a solar panel farm in Abu Dhabi for US$0.0242 per kw/h and the fact that most Asian countries now have a tendering or auction scheme in place, Attia reckoned these trends “demonstrate that unsubsidised grid parity has arrived or is fast approaching in many of these markets, questioning the long-term sustainability of FiT.” Whilst solar and other renewable energy auctions have encountered implementation hurdles in the past, they have recently become a popular policy tool mainly because of their potential to achieve deployment in a cost-efficient and regulated manner,
Project bankability As tender and auction schemes become more popular in Asia, project bankability is also bound to become more important. Rohan Singh, managing partner at Finergreen, said several of the top criteria for lenders when evaluating a solar PV project’s bankability include having a stable and predictable cash flow, satisfactory coverage ratios, guarantees, and mitigation strategies for risks. Analysts believed that designing auctions and raising project bankability will enable Asia to pursue its strong renewable ambitions. Singh added that the region is looking to install 900GW by 2030 — a target that will require roughly US$147b. Given the large amount of investments required to fuel Asia’s renewable goals, he said the region faces two key challenges: access to financing solutions remains difficult to small or mid-size projects, and a lack of local experience in renewable deals structuring. In the case of Pakistan and Malaysia, Islamic financing has risen as an attractive option to bankroll their renewable and solar PV projects. Pakistan’s US$955m hydropower plant has been financed through the issuance of Islamic bonds, an infrastructure deal that was notably one of the largest in the country’s history. The Malaysian government likewise encourages Sharia’-compliant financing.
Malaysia’s total installed capacity by source (in MW)
Source: Solar Plaza
Dr Frank Yu
Chinese utilities turn to massive consolidations
Mega mergers on the way
f analyst forecasts turn out to be correct, then China will soon be a land of power titans as government regulation forces state-owned enterprises (SOEs), many already large in size, to band together through high-profile mergers and acquisitions. These mega-mergers promise synergies such as revenue diversification and cost efficiencies that are difficult to discount despite the re-organisation challenges that a fusion of giant companies often entail. Case in point: China Shenhua and China Guodian Corporation have submitted a merger proposal to the State Council that would create the world’s largest power utility company, National Energy Investment Company (NEIC),
with an installed capacity topping 225GW, pulling ahead of EDG and Enel. NEIC will also be the largest wind power developer at 33GW and the biggest coal producer. “This merger marks the beginning of expected massive consolidation across China’s energy sector as the government is keen to internationalise state-owned enterprises,” said Dr Frank Yu, principal consultant, Asia-Pacific Power and Renewables at Wood Mackenzie. He stated that both Shenhua and Guodian will likely reap large benefits from the merger. Shenhua, one of the world’s largest coal suppliers, can diversify from its current coal-heavy (roughly 90%) capacity mix into subsidised renewable energy, and gain
increased protection from power price dips resulting from recent market liberalisation. Meanwhile, Guodian, the second largest state-owned power company in China, can better manage supply and price risks by leveraging on its merger partner’s integrated infrastructure for lower transportation costs and ample cash reserves for debt repayment. Mega mergers, mega responsibilities Still, it will be dangerous to expect a fairytale ending for all Chinese power sector mergers, as Yu warned, “The biggest question is whether the newly created titans can well manage the shock of reorganisation, improve their decision-making process and work towards synergies.” M&As will drive industry consolidation over the next year or so, said Ivy Poon, vice president, senior analyst at Moody’s. The Chinese government, in an effort to reduce overcapacity in the coal sector, has been keen to push out reforms for SOEs and make a stronger case for M&As. “Further activity is expected in the power sector in view of the ongoing SOE reforms in the next 12 to 18 months,” said Poon.
Declining gross margin of major gencos
Source: Moody’s Financial Metrics
the chartist: JAPAN TO STRUGGLE IN DEALING WITH 50GW BACKLOG OF SOLAR PROJECTS Japan’s solar power sector will expand at robust rates through to 2020 as a large Slowing solar will still dominate the sector backlog of projects supported by feedin tariffs come online. After 2020, BMI Research said that the its transition to a reverse auctions system will slow growth, as the Japanese government looks to regulate capacity additions in order to reduce subsidy costs and support grid stability. “We expect Japan to register robust solar capacity growth through to 2020 as a result of the implementation of a substantial pipeline of projects that benefit from a generous feedin tariff support scheme. Our forecast is that out of a 50GW backlog of such projects, only 20GW will actually come online, as most will not be able to take advantage of the FiT subsidies amid stringent government requirements and delays in development,” Source: BMI Research BMI Research added.
Global solar installations
Source: Bloomberg New Energy Finance
ASIAN POWER 7
Indonesia’s tighter terms
Transfer of existing shares: Need approval
Mytrah Energy eyes 1000MW of wind and solar projects INDIA
hen the Ministry of Energy and Mineral Resources (MEMR) issued a new regulation in July that would tighten control over how power and geothermal companies transfer shares and change board members, analysts were quick to warn of its possibly strong deterrent effect on investors. Daniel Ginting, partner at Allen & Overy in Jakarta explained that Reg. 42/2017 provides that most transfers of shares or participating interests in energy and mining companies and changes to the boards of directors and commissioners of such companies require prior approval from MEMR. “Whilst similar forms of governmental control already existed in the upstream oil & gas and the mining sectors, Reg. 42/2017 now extends these to the downstream oil & gas and power sectors, including geothermal,” he said. Ginting added there are workarounds to the regulation, but they will involve more work. Investments may now have to be structured or restructured further up the corporate chain or through the issuance of new shares in the relevant energy or mining company. “Whilst such structuring may be possible, it is often cumbersome and time consuming to put in place and is plant WATCH
Source: Baker McKenzie
Vikram Kailas, Mytrah Energy
unlikely to be attractive to new foreign investors looking at the Indonesian market for the first time,” he said. Risks abound “All such additional requirements also come at a cost for investors, increasing risk and lowering rates of return and making the Indonesian market less attractive by comparison to alternative markets in the region,” Ginting added. Luke Devine from Baker McKenzie said the regulation, which came out of left field, will put project lenders in a more cautionary stance when engaging independent power producers. Many will likely insist on a two-tiered shareholding structure in all IPPs so they can enforce share security at the holding company level without having to transfer any shares in the IPP itself if a default occurs. “Lenders particularly will have to look closely at the corporate structures of IPPs to ensure that they can continue to enjoy effective security over the project,” he said.
Mytrah Energy, an Indian renewable energy producer, is eyeing aggressive expansion of its operational capacity. CEO Vikram Kailas said that in just six years, the firm has commissioned over 1,000MW of generation capacity across 18 wind power projects, and is planning to commission another 1,000MW of wind and solar next year. What is Mytrah Energy’s biggest plan to date? What should the industry be excited about? Mytrah Energy commissioned over 1,000MW of generation capacity across 18 wind power projects in eight states within six years of its inception. The firm is currently constructing nearly 1,000MW of wind and solar projects and plans to commission them over the next year. The pathway for the secular growth of the Indian renewable power sector has become clearer with time. Whilst the target of 175GW by 2022 is a challenging one, the momentum gained by the industry is undeniable. The unmet renewable purchase obligation of close to 40GW and the supply gap expected to emerge from retiring old, polluting thermal assets should help sustain the momentum. Luke Devine
1GW Taketoyo project probed
New turbines for Sarahnlom farm
CTGC starts work on 16GW power station
Chubu Electric’s 1,070MW Taketoyo coal-fired power plant project is currently being reviewed by the Japanese Ministry of Environment, which is likely to recommend the reconsideration of the project and will probably submit an objection to the Ministry of Economy, Trade and Industry because of rising concerns over carbon emissions. The final recommendation over the project is scheduled to be issued soon, according to Enerdata. In June 2015, the Ministry of Environment objected another huge coal-fired project in Yamaguchi.
The turbines are equipped with 153-metre tall towers, and with the 56-metre blades, they reach a total height of 210 metres. The project -owned by Thai engineering company Gunkul and being built by developer PowerChina ZhongNan- has total capacity of 67.5MW; i.e. 33 units of the G114-2.0 and G1142.1MW models. Siemens Gamesa has already installed these 33 turbines in the Sarahnlom wind farm in the Nakhon Ratchasima province in central Thailand, whilst commissioning is scheduled for this year.
China Three Gorges Corp. (CTGC) has started the construction phase of the 16GW Baihetan hydropower station on the Jinsha River in China, between the borders of Sichuan and Yunnan provinces (Anji County, Zhejiang province, between the cities of Tianhuangping and Shanchuan), according to Enerdata. The power station will consist of 6 generating units of 1,000MW each and is expected to have an average annual power output of 62.4 TWh. The project’s core structures will include a 277-metre tall arch dam and generation facilities.
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What are the newest projects that you have as of the moment and what projects are in the pipeline? In the wind power space, Mytrah currently has 320MW of projects under construction, details of whichare available in the firm’s annual report. The firm recently participated in the auction of interstate wind power projects conducted by the Solar Energy Corporation of India (“SECI”) and won the right to construct 250MW of projects. The project will be constructed at Maniyachi in the Thoothukudi district of the south Indian state of Tamil Nadu. It will supply power to the Power Trading Corporation (“PTC”) under a 25-year Power Purchase Agreement. The power will be injected into the Central Grid for distribution utilities with whom PTC will execute Power Sale Agreements. Mytrah has recently received the Letter of Award for the project from SECI and is working towards completing it within the stipulated 18-month construction period. The other project under construction project is the 70MW Aspari Extension project in Andhra Pradesh, another southern Indian state. In solar power, the firm is working on 500MW of projects across three Indian states – Telangana, Punjab and Karnataka. All these projects are currently under construction and are expected to become operational over the next few months. Apart from these, we have several other projects under various stages of development.
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Coal’s glory days may soon be over
REVIVING BATAAN NPP
this traffic light policy is proving to be effective,” Varro noted. “The investment decisions taken in 2016, totalling a mere 40GW globally, signal a more dramatic slowdown ahead for coal power investment once the current wave of construction comes to an end,” he furthered. There was also a decline in coal power generation investment in India. Varro said that this can be attributed to two factors: the financial difficulties of the Indian electricity sector and the increasing competitiveness of the solar power industry in India. “Questions are increasingly being raised about the economic necessity of new coal-fired power plants,” he stressed.
End of an era The makeup of investments in China exhibited a marked change in the past year, with a 25% decline in commissioning of new coal-fired power plants. Today, energy investment in China is increasingly driven by low-carbon electricity supply and networks, and energy efficiency. “The administration introduced a so-called ‘traffic light’ policy last year to prevent overinvestment in coal capacity. A year after, we can see that
New sources in the spotlight Coal’s loss is renewable energy’s gain, with renewable energy sources grabbing the lion’s share of funding in the past year. IEA’s report showed that investment in new renewablesbased power capacity, at US$297b, remained the largest area of electricity spending, despite falling back by 3%. Renewables investment was 3% lower than five years ago, but capacity additions were 50% higher and expected output from this capacity about 35% higher, thanks to declines in unit costs and technology improvements in solar PV and wind. “Renewables investment is doing really well. 85% of investments into RE went into electricity production, such as hydropower and wind power. The majority of spending is coming from both the government and the private sector, but there is still very little set aside for research,” Varro said. Spending on electricity networks and storage reached an all-time high of US$277b in 2016. China accounted for 30% of networks spending, driven by distribution networks and a significant expansion of large-scale transmission. Another 13% went to India and Southeast Asia, where the grid is expanding rapidly to accommodate growing demand.
nvestors are no longer fired up about pouring funds into Chinese coal power plants, as money meant for new coal-fired capacity in China crashed to a capacity equivalent of less than 20GW of coal power in 2016. This is a far cry from an annual average of 50GW from 2011 to 2015 and 80GW in 2006 to 2010, said Laszlo Varro, chief economist of the International Energy Agency. “This century so far was the century of coal, especially in China and India. This age of coal investment is now coming to an end—or at the very least, it is coming to a pause,” he added. Total energy investment worldwide in 2016 was just over US$1.7t, marking a 12% decline on a year-on-year basis. China remained the largest destination of energy investment, taking 21% of the global total. Meanwhile, energy investment in India jumped 7%, cementing its position as the third-largest country behind the US.
Soledad Castañeda, PNRI
Asian Power caught up with Castañeda, chief of the Atomic Research Division of the Philippine Nuclear Research Institute. Will Bataan Nuclear Power Plant (BNPP) ever be operational? The Department of Energy believes that the BNPP complex should be preserved pending a final decision by the government on the utilisation of nuclear energy for power generation. Recent pronouncements from the Duterte Administration supports the strategy to continue studies on nuclear energy as a long-term option for the country. Where do you believe the industry will be in five years’ time? In the near term, technical assistance for the nuclear power programme will be needed. Recognising the need for capability building of manpower (initially) amongst the members of the Inter-Agency Core Group on Nuclear Energy, assistance from the IAEA, and other bilateral partners may be solicited to support the conduct of trainings/workshops/seminars, as well as strengthening the education system in nuclear power engineering and nuclear science and technology in general. Opponents of the operation of the BNPP have raised issues pertaining to safety. An IAEA Review Mission is needed to provide advice for a complete and comprehensive evaluation of the BNPP site.
Equis Energy to shell out US$1.18b for 1,000MW solar project in Australia When a recent Climate of the Nation survey showed that a whopping 96% of Australians wanted renewables as the country’s primary energy source, renewable energy project developer Equis Energy swooped in with a business opportunity. It’s popping the champagne now as it recently secured the approval from the Western Downs Regional Council in Queensland, Australia to develop the 1,000MW Wandoan South Solar Project (WSSP), one of the largest solar projects in Australia and the world. WSSP will involve a capital investment of approximately A$1.5b (US$1.18b). Construction of the project is expected to begin in 2018, and will begin delivering power in 2019. The project, covering 1,424 hectares of land, will be connected to Powerlink’s Wandoan South substation, and will have the ability to add battery storage when commercially feasible. According to Josh Carmody, Equis partner and head of Australia, this will allow energy to be stored and will facilitate the generation of power into the evening. “The WSSP project will incorporate up to 3 million solar 10 ASIAN POWER
PV panels and have a generation output of approximately 1,800,000 (MWh/year), collectively supplying power equivalent to the annual needs of 255,000 homes, and saving over 1. 7 million tonnes of CO2 annually compared to same generation from coal‐fired power,” he said. He, however, declined to comment on Equis’ partners in the project and on project financing. Going 100%? With Australians clamouring for renewable energy sources, Andrew Blakers, director of Australian National University Centre for Sustainable Energy Systems, said that in a scenario of 100% renewable energy provision in which wind and solar provide 90% of annual electricity, the additional cost of balancing renewable energy supply with demand on an hourly basis throughout the year is modest: US$19-23/MWh. “Levelised cost of electricity of renewables of renewables is almost certain to decrease due to rapidly falling cost of wind and PV,“ he said.
Most preferred energy soucrce
Source: The Climate Institute
CO-PUBLISHED CORPORATE PROFILE
OWL Energy at the forefront of changes
Creating a bright energy future for ASEAN countries As Southeast Asia attempts to shift towards renewables, OWL Energy is playing a vital role in bringing feasible projects from concept to completion.
WL Energy, which is probably in more solar projects in Southeast Asia than any other consultants, according to Tony Segadelli, managing director at OWL Energy, is acting as a sort of solar engineering guru for the region. As ASEAN turns 50 years old, OWL Energy makes sure it is at the forefront of industry changes in the power sector. In the Philippines, for example, OWL Energy is creating a detailed design for a solar project. In Vietnam, the firm is serving as a technical advisor for engineering, procurement and construction or EPC tendering of an early mover solar project owned by a consortium of Vietnamese and international investors, including the International Finance Corporation (IFC). With Malaysia aiming to increase their solar capacity on the back of ambitious targets -- its Sustainable Energy Development Authority (SEDA) is reportedly targeting that by 2050 nearly a quarter of all electricity generated in the country will be from renewable sources — Segadelli revealed that OWL Energy is now bidding on Lenders’ Engineer roles for upcoming projects. “Malaysia has only been installing 30MW of solar per year however it looks likely that this will be stepped up over the next few years,” he said. Hunger for power from the sun Segadelli sees growth potential in the rooftop and floating solar sectors of Singapore, but said there is overcapacity in the country and expects there will be minimal power plant installation in the foreseeable future. Brunei, meanwhile, has a very small installed capacity and there are few encouraging signs of a significant increase in the near future. Apart from solar, OWL Energy is also assisting on a range of other
renewable energy projects throughout SE Asia. Many countries in the region do not have deep expertise or a long track record, which is where the firm’s experts come in to provide critical knowledge and insights. “Members of ASEAN are largely going along their own path towards a sustainable power future. Cambodia is fast heading towards the point where it will be a net exporter rather than importer. This is good to see and hopefully the CPTL line that was Cambodia’s first major transmission line which we worked on will soon be exporting power into Thailand,” said Segadelli. “Indonesia is looking very positive for fossil fired projects. The government plans to push for a combination of minemouth and supercritical coal projects. “ He further recognises that even if Thailand has long been considered the region’s leader in renewable energy — a role it has assumed under pressure from the ongoing gas depletion in the Gulf of Thailand —other ASEAN countries are stepping up their game. Sustainable power future In the Philippines, OWL is conducting a feasibility study for a sugarcane trash project and is serving as an owner’s engineer for a battery energy storage project. Thailand is also a fairly busy market for OWL with a slate of biomass, solar, waste-to-energy and combined cycle gas turbine (CCGT) projects. “We are working on hydro projects and these are mostly focused on run of river mini hydro projects,” said Segadelli, noting that it has just finished one such project in Laos. Further afield, OWL is focused on offshore wind projects in South
Leveraging on expertise
Korea, a country that has made known to the world its intent to become an offshore wind projects. It has created supportive regulations and an incentive mechanism as it pursues a large reduction in greenhouse gas emissions over the next decade, which has pushed developers to start cranking out projects such as the 30MW Tamra wind farm. Segadelli also teases that there is a “likely“ geothermal project in Japan in the foreseeable future. OWL Energy is also engaged in the development of biomass projects, including the aforementioned sugar cane trash project in the Philippines as well as construction projects in Thailand as both Owner’s Engineer and Lenders’ Engineer. In the waste-to-energy field, OWL Energy is helping pushing out projects in gasification, waste mining, incineration and landfill gas technologies. Even if there is a high demand for renewable energy across the region and OWL Energy can provide strong support to developers, some investors can still adopt a cautious approach especially in certain countries. In the end, consultants can give a big lift to the ASEAN dream of a sustainable energy future, but other stakeholders must also play their part. “Vietnam has a very high power demand growth,” says Segadelli. “However, issues relating to the length of time to negotiate power purchase agreements (PPAs) and the general bankability of PPAs need to be addressed. “A country OWL Energy is heavily involved in that has huge potential is Myanmar but with this potential comes a lot of issues,” he adds. “The World Bank planned to implement LNG with associated power plant tendering early this year however the Myanmar laws and regulations need to be established before this can be implemented.”
“Malaysia has only been installing 30MW of solar per year however it looks likely that this will be stepped up over the years.” ASIAN POWER 11
We have implemented a number of initiatives that have established our plant as a benchmark for other plants in terms of both efficiency and availability. These measures included improving the hydrogen purity of the generator, the installation of a variable speed drive for the feedwater pumps and implementation of a gas compressor bypass. We have worked closely with Siemens, our OEM such that we have extended the interval between major overhaul of the gas turbine.
Yu Tat Ming CEO PacificLight
The man behind Singapore’s 800MW LNG plant PacificLight’s CEO Yu Tat Ming shares how his company maintains Singapore’s first LNG-fired power plant and how being first challenges him to keep up with power plant innovation.
ingapore-based power generator and electricity retailer PacificLight takes pride in starting up the first power plant in the country to be fired entirely by liquefied natural gas. The 800MW facility, located on Jurong Island, powers over 1,000,000 Singapore households. Asian Power spoke to PacificLight’s CEO Yu Tat Ming to discuss his upcoming plans for the power plant that provides an estimated 9% of Singapore’s total electricity needs. Yu was appointed the company CEO way back in September 2009 and has since been directing the company for eight years now. What were the previous positions you held that led you to being the CEO now? How did these experiences help you be the leader that you are? Prior to joining PacificLight, I worked with Senoko Power Ltd for 20 years in various positions, including Vice President, Asset Management – a role in which I oversaw capital project development as well as the operation and maintenance of the Senoko Power Station. While at Senoko I was also responsible for the construction of five generating units as well as a major repowering project. I have also worked for CLP Holdings Limited, which is one of the largest investor-owned power businesses in Asia Pacific. During my time at CLP, I worked as station manager for the company’s largest coal-fired power station. What are your top three priorities for PacificLight? We have to create a future-oriented economy, powered by clean energy and green technology. Hence, our focuses are: 1)Efficiency – we constantly strive to improve our infrastructure and boost the efficiency of our power plant, some through adoption of new ideas and equipment, and some just through conscious efforts to reduce wastage. Our plant efficiency is markedly higher than what was achieved at the time we took over the plant from the manufacturer in 2014. Maximising efficiency allows us to produce electricity with the least emissions and at more competitive prices so that consumers can benefit from both a better environment and affordable electricity. 2)Safety – safety is a culture; safety means increased productivity. Our emphasis on safety led to PacificLight being awarded the globally-recognised certification, BS OHSAS 18001:2007, as well as the Singapore Standard (SS) 506 Part 1:2009 certification by the Singapore Accreditation Council. . 3)Reliability – having a reliable and stable plant is critical to our plant’s operation. This involves proactive inspections on a preventive as well as a predictive basis. Data analytics play an increasingly important part in our maintenance efforts as we are able to spot failure patterns through critical analysis of failure history of equipment. By playing close attention to plant data we have maintained an extremely high plant reliability factor, which is critical to the success of any commercial power plant What are the biggest challenges PacificLight is currently facing in generation and how do you plan to overcome these? Disruptive technology and disruptive business models pose a constant threat to all businesses, including PacificLight. Not only do we have to adopt the latest technology, we also need to constantly review our business processes. We should be brave to adopt out-of-the-box business ideas in order to stay ahead of competition. The liberalisation of Singapore’s electricity market in 2018 will see a broadening of the market base with an additional 1.3 million household customers given the choice of their electricity
retailer. Coupled with a plethora of new electricity retailers, this development presents both a threat and an opportunity. PacificLight is investing in new systems to ensure that we are able to distinguish ourselves in the market and deliver innovative products and services beyond the mere sale of electricity to customers. What is PacificLight’s biggest plan to date? Singapore is currently brimming with generation capacity, hence our focus is to position ourselves well for the recovery of the market by ensuring that our 800MW plant continues to set the industry benchmark in efficiency and availability, and by fostering close collaboration with business partners beyond the traditional business dealings that leverage each other’s strength. We have implemented a number of initiatives that have established our plant as a benchmark for other plants in terms of both efficiency and availability. These measures included improving the hydrogen purity of the generator, the installation of a variable speed drive for the feedwater pumps and implementation of a gas compressor bypass. We have worked closely with Siemens, our OEM such that we have extended the interval between major overhaul of the gas turbine. We have been focusing on projects that increase the plant’s efficiency and reduce our carbon footprint. One key project has resulted in a sizable reduction of 2x850 kW auxiliary power consumption of our feedwater pumps, thereby improving the net generation output and efficiency of each unit. The project was completed last year. In August 2016, we also implemented a water recovery system that cuts our water consumption by more than half. The accumulative impact of these projects as well as constantly looking to improve our business processes and systems has had a significant impact on our plant efficiency and reliability. What do you think is Singapore’s biggest energy problem at the moment and how should this be addressed? The biggest energy challenge facing the world, not just Singapore, is climate change. It is a challenge that demands collective action. As part of international efforts, Singapore has committed to reducing its emissions intensity by 36 per cent from 2005 levels by 2030, and stabilise emissions with the aim of peaking around 2030. The formation of a Singapore Chapter of World Energy Council in November 2016, of which PacificLight is one of 6 founding members, allows Singapore to draw on the wealth of research and international best practices that WEC provides to its members from almost 100 countries around the globe. At a corporate level, sustainability forms one of PacificLight five core values and we believe that every individual and business needs to play a part in building a more energy-efficient world. PacificLight operates Singapore’s first power station fired by LNG, the cleanest fossil fuel, using CCGT, a form of highly efficient energy generation technology. We are the first retailer to lead a solar adoption initiative that allows consumers to choose solar-generated electricity. Beyond electricity, PacificLight also offers energy efficiency audits and demand aggregation schemes Singapore is currently working on a next-generation grid system called Grid 2.0. How do you think will this help you as a utility? Grid 2.0 will integrate initiatives like smart metering, energy efficiency and demand-side management along with an expected increase in solar generation. These areas are very much in line with what PacificLight has been, and will continue to embrace as the industry evolves. ASIAN POWER 13
Country report: Taiwan
A series of unfortunate events for Taiwan
Taiwan’s nuke-free vow under fire as energy supply issues arise amidst massive blackout An operational error caused the country’s biggest natural gas power plant to stop powering households and businesses, and as Taiwan struggles to fix the damages, one question arose: Was Taiwan right in ditching nuclear?
hen a power outage crippled more than 6 million households in Taiwan on August 15 amidst the sweltering summer heat, it brought to fore the dilemma the aspiring renewable energy leader now finds itself in: can it ditch nuclear power and reduce coal dependence whilst managing to avert future blackouts? The Ministry of Economic Affairs attributed the massive power outage to an operational error in Tatan Power
Taiwan might need to reevaluate its bold plan to nix nuclear, shift away from coal, and focus on renewables and natural gas.
Net power generation (by company & fuel)
Source: Bureau of Energy
14 ASIAN POWER
Plant, the country’s biggest natural gas power plant located in Taoyuan’s Guanyin District. Six generators stopped working and affected the supply of 4 million kilowatts of electricity. Households and businesses throughout the island had to bear through three hours of power rationing, disrupting business operations and household activities. In the aftermath of the power outage, the economy minister resigned and analysts sounded off warnings that Taiwan might need to re-evaluate its bold plan to nix nuclear, shift away from coal, and focus on renewables and natural gas. “The current objective of phasing out nuclear power whilst at the same time drastically reducing coal consumption in Taiwan’s energy mix by 2025 looks overly ambitious,” Dr Guo Yu, principal Asia analyst at Maplecroft, a UK-based risk and strategic consulting firm said. “The Taiwanese government, led by Prime Minister Lin Chuan, aims to drastically alter the country’s energy mix. It looks to raise the share of renewable energy to 20% by 2025 from 5% currently, hike up the share of natural gas to 50% from 32%, lower the share of coal to 30% from 45%,
and remove the 15% share of nuclear power. Verisk Maplecroft’s Energy Security Index already categorises Taiwan as “high risk” with a score of 3.42/10.00 due to its “extreme” dependence on seaborne natural gas imports. The country will only become more vulnerable to supply disruptions due to geopolitical tensions and price volatilities if it follows through on its plan to source half of its electricity production through natural gas. “A greater reliance on energy imports would further undermine the country’s energy security,” Yu said. The analyst also warns that growth of power generation from renewable sources “is unlikely to fill the nuclear-coal shortfall.” This is contrary to the government’s more sanguine targets to quadruple renewable energy’s share in the energy mix, which it expects to reach by attracting $59 billion in private capital to help finance new renewable projects. Kerry-Anne Shanks, head of Asia Gas and LNG at Wood Mackenzie, reckons the August 15 mass blackout highlights some key issues in Taiwan’s power sector such as construction delays. “The cause of the blackout was human error which
Country report: Taiwan Gross power-generation (by company)
Dr Guo Yu
Source: Bureau of Energy
stopped gas supplies into the Tatan power plant. Subsequently, the plant with a total of 4,384MW of gas-fired capacity went offline completely. Power cut-offs of this scale are difficult to back-up, but Taiwan’s power market has also been stretched,” she said. Blame it on the old guys Shanks blames ageing thermal capacity and capacity addition delays as major culprits in the summer power outage. Taipower, for example, has been constructing 2,293MW of new capacity to help cope with the summer peak but these projects have been pushed back and were not available for peak demand in July and August. “The track record of adding new generation capacity on the schedule is poor. There have been frequent delays of new capacity construction,” she said. Shanks also points out that Taiwan has a capacity problem, not a fuel supply one, which means the plan to import more LNG or coal in the near term may not be the ideal option. To highlight the issue, she explained that during peak months June and July, reserve margins, which measure the amount of power a grid has over and above its demand, went as low as 2.5%, far below the 10 to 15% comfort levels. These falling reserve margins increase the risk of outages. “In 2016, Taiwan had 80 days where reserve margins fell below 6%, which is unhealthy,” said Shanks. In the face of this fuel supply problem, Taiwan’s planned nuclear phase out has become harder to defend, according to analysts. To make Taiwan nuclear-free by 2025, the government has stopped operations for three of the country’s six nuclear power plants before they have reached the end of their service lifetime. Yu noted that the government must cover the cost of mothballing and decommissioning the nuclear power plants, whilst Shanks says replacing nuclear generation with gas
and renewable capacity leads to more expensive electricity — a combination that leaves the nuclear-free plan open to increasing opposition. “The government will also be wary of backlashes from the public and business communities over potential electricity price hikes during the transformation,” Shanks said. “Pressures to increase tariffs will likely mount over the coming years as hefty up-front investment is needed in the development of gas-fired plants and renewable power generation.” Can renewables save it? Taiwan’s energy transition is driven by four core values, according to Dr Chuan-Neng Lin, director general of Bureau of Energy. First, strengthening energy security and providing access to stable, affordable and low-risk electricity. Second, building a green economy, driven by technology innovation and a growth driver to local employment. Third, increasing environmental sustainability by moving towards clean energy and providing a healthier environment for Taiwan’s population. And fourth, raising social equity through the ensuing “market revolution” in Taiwanese energy sector and lower electricity prices. Illustrating the progress the government has made in the energy transition, Lin ran down some of the key accomplishments in renewable energy development. In the area of offshore wind power development, 36 potential sites for investment have been identified and there are preparations to begin offshore wind power zonal development after finishing environment impact assessment evaluations and permit clearances. In solar power development, he said the two-year solar photovoltaic (PV) project to add 1.52GW of capacity is going along well through a deployment strategy that prioritises roof type and specific ground type installations over large-scale ground type. The roof type installations will be popping up in agricultural facilities
(450MW), residential and business buildings (240MW), factories (160MW), and government buildings (60MW). Meanwhile, the ground type installations will be spread out in the lands of salt industry players (230MW), severe subsided areas (200MW), water bodies like ponds and dams, and brown field areas (30MW). In a review late last year, Mei-Chih Hu, professor at the Institute of Technology Management, National Tsing Hua University said “Taiwan could be an important player in renewable energy.” “For years it has been missing opportunities due to the focus on nuclear power and fossil fuels (which probably owed more to Taiwan’s geopolitical situation than to strictly energy-related concerns). But now the way is open to build the country’s generating capacity utilising renewables whose impact can be increased by investment in smart grids.” “This would allow Taiwan to complement its manufacturing capacities in producing solar PV cells as well as (potentially) wind turbines and other renewable energy devices.” She explained that Taiwan is positioned well to pursue its renewable energy dream. For one, it has well-tested industrial development models involving the promotion of new industries through market stimulation and domestic technology leverage. “Now is the time to apply these skills to the urgent needs of cleaning up its energy system and creating new pillar industries for the future.” Yu reckons there is strong support for this energy future the Taiwanese government envisions, but this could wear thin if the current administration fails to work out the flaws that the recent blackout has laid bare. “While politically embarrassing for the Tsai administration, the fallout from the blackout does not pose an immediate threat to government stability,” said Yu. “However, the incident raises questions of the government’s wider energy policy, which will prove an important issue that may determine the political fortunes of President Tsai and the ruling Democratic Progressive Party as we approach.”
Source: Bureau of Energy ASIAN POWER 15
Analysis: INDONESIA’S CAPACITY PAYMENTS PLN will pay US$76 billion to have access to all the capacity scheduled. Capacity charges for coal-fired power plants are particularly notable as these plants are far less flexible than gas-fired counterparts in accommodating variable renewable energy input into the grid.
Is Indonesia setting itself up for a trap?
Expensive electricity could be looming over Indonesia With Indonesia’s Regulation No. 10, will project lenders be assured that bankability of projects remain the same?
nder Perusahaan Listrik Negara’s (PLN) procurement guidelines, power purchase agreements (PPAs) signed between PLN and IPPs of thermal power plants are for fixed terms of approximately 25 years, or for a maximum of 30 years after Commercial Operation Date (COD). Capacity payment, as part of the tariff, is a fixed payment calculated based on the installed capacity of the power plant with specific availability factor agreed to by an IPP and PLN. It is paid for each kilowatt of available (not necessarily dispatched) capacity. Specifically, it covers payment of the principal and interest of the debt used to construct the power plant, usually on a non-recourse basis; return on equity invested by project sponsors; and fixed operation and maintenance (O&M) costs that are independent of the amount of energy generated (e.g., staffing costs, administrative expenses, operator fee, insurance premiums, etc.). In January 2017, the Ministry of Energy and Mineral Resources issued Regulation No. 10/2017 on Principles of Power Purchase Agreements (Reg. 10). One aspect of Reg. 10 states that the take-or-pay timeframe within a PPA is for a “certain period,” which could be interpreted as a duration for less than the full term of the PPA, perhaps for only the debt-servicing period. Lenders are assured that the bankability of the project will remain the same, whilst 16 ASIAN POWER
It could transfer the risk of bearing a residual stranded asset from PLN to investors if it is interpreted narrowly by PLN.
IPPs will have to take the risk on whether PLN will dispatch from their plants after the debt is repaid. Less flexible capacity charges This change, yet to be definitively applied, will be subject to negotiation between IPPs and PLN. But it could transfer the risk of bearing a residual stranded asset from PLN to investors if it is interpreted narrowly by PLN. We estimate that PLN pays US$3.16 billion/GW in the form of capacity payment for a coal-fired power plant. This is based on a debt tenor of 20 years with an all-in interest of 5%, a PPA of 25 years and targeted equity return of 12%. According to RUPTL 2017-2026, a total of 24GW of coal fired power (PLTU) and mine-mouth power (PLTU MT) generation capacity has been allocated to IPPs,8 which will receive the capacity payment. On this basis, in aggregate,
What is the cost? The difference between the MEMR’s and IEEFA’s projection (188,768MW and 143,315MW respectively) is accounted for by the difference in the extent of electricity sector demand growth over the forecast period (with IEEFA assuming lower economic growth and a greater contribution from energy efficiency savings), whilst the composition differences reflect different views on the rate to which renewable energy potential is realised, with the residual portion (i.e. the difference between total installed capacity and all renewable sources in the IEEFA case) assigned to thermal power. Specifically on solar, the IEEFA projection (33GW for utility, rooftop and offgrid solar combined) is more ambitious than MEMR’s. IEEFA has referenced both MEMR’s solar projection (9.3GW) as well as IRENA’s projection (47.2GW), and our projection represents a partial deployment of the amount of available space for ground-mounted and rooftop solar PV and the ability of grids to deal with the supply of variable renewable energy. Were PLN to stay on course to develop all the planned thermal power, and assuming IPP invests in 50% of this excess capacity, this would amount to a total of 32,667MW. On the basis that PLN will have to pay US$3.16 billion per GW on capacity charge, and assuming that all of the generation will be coal-based as it represents the cheapest form of thermal power (when cost externalities and capital subsidies are both ignored), costs total to US$103 billion for this capacity. From “Overpaid and Underutilized: How Capacity Payments to Coal-Fired Power Plants Could Lock Indonesia into a HighCost Electricity Future” by Yulanda Chung, energy finance consultant, Institute for Energy Economics and Financial Analysis
Basic cost of electricity production and average selling price
CO-PUBLISHED CORPORATE PROFILE
ROSATOM has strong focus on Asia Running projects in India, China, and Bangladesh, ROSATOM sees potential in new nuclear build in Southeast Asia
outheast Asia is definitely in the nuclear industry’s hot seat as proponents come to countries to discuss possibilities of utilising nuclear power in their territories. Egor Simonov, director of ROSATOM Southeast Asia and Regional VP of ROSATOM International Network, shares the company’s vision amidst this possible energy shift. What is the current status of “nuclear renaissance” among Southeast Asian countries? Despite the rapid industrial growth and the high electricity demand, there are no operating nuclear power plants (NPPs) in Southeast Asia, although most of the region countries are planning or considering going nuclear. The prerequisites for these plans are as follows: first, the rapid development of the region’s economy, which requires a stable power supply at reasonable and predictable prices; secondly, environmental concerns, expressed in the requirements for CO2 emissions cut. For instance, with Thailand’s emission reduction target, the country pledges a 20 to 25% reduction in its CO2 emission by 2030. So far, only the nuclear power industry is able to meet both these requirements, offering clean baseload electricity at an affordable price. In Asia and elsewhere we constantly see that the key challenge for our industry is the public acceptance of nuclear technologies. It is traditionally high in the countries, where nuclear power plants are being operated. For example, in Russia the current rate of nuclear energy support amounts to 74%. But in the countries where people have little understanding of nuclear technologies, lots of prejudices and fears come into force. Thus it is crucial to increase the level of the public acceptance, by
Kudankulam Nuclear Power Plant, India
spreading the reliable and true information both about a particular project and nuclear technologies and general. What are ROSATOM’s nuclear new build projects in Asia? ROSATOM sets an ambitious target to expand its foreign businesses portfolio, which amounted to more than US$133b in 2016. And since the most of the new nuclear build is projected to happen in Asia, we have a strong focus on that region. For instance, ROSATOM is actively developing cooperation with India, which aims to supply 25% of electricity from nuclear power by 2050. There are two units of our design already in operation at Kudankulam NPP. This year we had two milestones at that site – commissioning of Unit 2 and the start of concrete pouring at Unit 3. Our strategic partnership with India includes the construction of at least 12 nuclear power units of Russian design in the next 20 years, and at the moment our Indian partners are selecting a site for the new units. In China, ROSATOM has a positive track of nuclear power plant construction, with two units at Tianwan NPP successfully operating since 2007. Two more units are under construction at this site, and the fuel loading into the third unit has just recently commenced. We also hope that many other countries will take into consideration the positive case of Bangladesh, the first nuclear newcomer in the region. The project to construct Rooppur, the country’s first nuclear power plant, is underway. The plant will be equipped with two reactors 1200MWe each. We expect the pouring of first concrete at the first power unit to commence by the end of 2017. What we offer to the market is the Russia-designed VVER reactors, that enjoy
Egor Simonov, ROSATOM
great safety track throughout their 50+ years of operation in 11 countries of the world. The latest Generation 3+ VVER-1200 design is based on the extensive experience of previous VVER types exploitation and also correspond with all the modern safety standards. This design fully takes into account the main Fukushima lessons learned. The safety systems are designed to have the capability for stable operation under adverse conditions such as earthquakes, floods, storm winds, hurricanes, snowfalls, tornadoes, fire, and even aircraft crash. What is ROSATOM’s experience in small modular reactor (SMR) development? Many Southeast Asian countries are characterised by a geographical misbalance of power generation, including underdeveloped grid systems in remote areas. Therefore, there is a certain need for the flexible carbon-free power supply solutions. SMRs have the capacity to sate this demand, since their key advantages are high manoeuvrability and off-grid deployment possibility. Of particular interest for archipelago countries such as the Philippines and Indonesia could be offshore SMRs. We have developed a floating nuclear power plant design, based on an impressive record of small reactor technology development for the Russian icebreaker fleet. This mobile FNPP is designed to supply electricity, thermal power, and even desalinated water to coastal or isolated territories, as well as to industrial offshore installations. The construction of the 77 MWe “Akademik Lomonosov”, the world’s first FNPP, is now in its final stages in Russia. ASIAN POWER 17
Analysis: THAILAND RENEWABLES announced in July 2017 that the Asian Development Bank (ADB) has invested over USD57mn into Thai company B Grimm Power Public Company to develop renewable energy projects across South East Asia.
Thailand’s solar market has been luring Chinese investors
How Thailand plans to beat peers in renewables growth Its renewables industry is increasingly gaining financial support from international institutions and development banks, strengthening project pipeline.
hailand’s non-hydropower renewables industry has grown rapidly over the last five years, driven by the government’s implementation of a supportive regulatory environment for renewable energy, which includes a feed-in tariff, bidding programmes for renewables capacity and tax incentives. The rationale behind the creation of this favourable investment environment for renewables is the government’s desire to diversify the country’s power mix. We expect growth to remain robust over the coming decade, with non-hydro renewables capacity increasing by an annual average of 4% between 2017 and 2026, totalling over 9 gigawatts (GW) by the end of our 10-year forecast period. According to this forecast, non-hydro renewables will account for over 8% of Thailand’s total electricity mix by 2026. As such, we expect Thailand will be a renewables outperformer in the South East Asia region over the coming decade, in terms of total installed renewables capacity. In conjunction with the supportive regulatory environment, we expect a number of additional factors to drive growth in renewables capacity in Thailand, particularly in the biomass and solar segments: Domestic energy sources and equipment manufacturing base: Furthermore, the steady build-up of local solar manufacturing capacity that we have witnessed over the last two years 18 ASIAN POWER
Chinese solar manufacturers have increasingly targeted the market, as they look to offset the overcapacity in their domestic market and seek out alternative growth opportunities.
will ensure that local panels are readily available for developers, without the need of shipping. In particular, Chinese solar manufacturers have increasingly targeted the market, as they look to offset the overcapacity in their domestic market and seek out alternative growth opportunities. Several Chinese solar manufacturers are reportedly looking to set up module production facilities in the Thai solar industry, including Zhongli Talesun Solar, Symbior Solar, Suntech Power, Yingli Green Energy and Trina Solar. Thailand’s renewables industry is receiving financial assistance from international financial institutions and development banks, which will support the deployment of capacity and strengthen the pipeline of projects. In fact, the wider South East Asia region’s renewables sector is becoming an increasingly common destination for development finance. For example, it was Thailand renewables capacity on the rise
Source: BMI Research
Headwinds to progress Ongoing environmental and social opposition facing new coal-fired power projects in the country is creating opportunities for growth in Thailand’s renewable energy sector, as developers shift their business strategies away from coal. Coal-fired power is one of the most competitive sources of energy for Thailand, partly due to the sizeable amounts of domestic coal reserves but also due to the widespread availability of coal across Asia; however, local opposition to the development of coal power plants continues to hinder projects. A pertinent example is the 800MW Krabi coal power plant, which is facing strong protests from the local population and delaying Electricity Generating Authority of Thailand’s (EGAT) bidding process for the plant. As such, EGAT is reportedly going to focus more heavily on renewable energy in its long-term strategy to account for the issues facing its coal capacity portfolio. We do highlight that despite this positive investment climate, the country’s weakening political risk outlook presents a downside risk to our forecasts. In fact, our Country Risk team has downgraded BMI’s long-term political risk score for Thailand to reflect the combination of increasingly strict control over the country’s media and use of lèse-majesté laws, the potential for a power struggle to emerge between the royal palace and the military generals and continued delays in the timetable for the next election. Since May 2014, when the military junt assumed power in a coup, elections have consistently been delayed, first to 2016, then 2017 and most recently, to 2018. This has the potential to cloud the investment environment for the renewables sector and weigh on the success of future renewables tenders. From BMI Research
Co-published corporate profile
Toshiba’s crucial role amidst Asia’s green energy and sustainability revolution With over a century of experience and expertise providing cutting-edge technology, Toshiba is now looking at boosting Asia’s energy needs in a sustainable and environmentally conscious manner — the way it knows best. people’s problems through technology,” said Yoshihiro Aburatani, President and CEO, Toshiba Corporation Energy Systems & Solutions Company, adding that some of the improvements they’ve been working on over the years in Asia include systems efficiency and development of low carbon emissions solutions to address environmental issues.
Yoshihiro Aburatani, President and CEO, Toshiba Corporation Energy Systems & Solutions Company
part from increasing per capita income, Asia’s stellar economic growth over the last few years have also prompted the region to produce exponentially growing energy supply — mostly from fossil fuels — that has been taking a toll not only on the region but also the world’s environment. So how can Asia meet its rapidly growing energy needs in a more efficient, sustainable, and environmentally friendly way, without compromising its massive growth potential? Toshiba wants to be the answer to that. Backed by over 140 years of experience and expertise providing cutting-edge technology and innovative solutions to society’s pressing problems, Toshiba today sees itself as a continually vital cog in Asia’s energy revolution. Beyond providing total energy systems and solutions including environmentally friendly high efficiency thermal power generation, hydro and geothermal power generation facilities, the company wants to show, at its heart, that renewable options — when done right — can be reliable and can offer a clearer path to a more sustainable and clean energy future. “Toshiba was founded on the belief of serving people first and the desire to solve
both to environmental considerations and stable power supply. In Indonesia, Toshiba has supplied or received orders for various turbines (steam, hydraulic, and geothermal) across the country with a combined capacity of over 9,300 megawatts (MW). Recently, one of the largest geothermal power plants in the world, which Toshiba contributed to, just started operations in March 2017.
Long history of success Ready to offer energy solutions Toshiba has had a long history of success in the The company has also had a long history energy business — from clean energy and energy of providing clean energy solutions to the efficiency systems — from the development Philippines, supplying main power generating of Japan’s first domestically produced hydro equipment and auxiliary units for thermal, hydro, turbine and generator over 120 years ago, to and geothermal power the launch of one of the “TOSHIBA WAS FOUNDED plants. Their first project most advanced energy in the Philippines was for a technologies to date — the ON THE BELIEF OF H2One™, a hydrogen-based SERVING PEOPLE FIRST hydropower plant in 1964, autonomous energy supply AND THE DESIRE TO SOLVE which still runs today. In Malaysia, Toshiba also won system which promotes the PEOPLE.” a major order for 2,000 realisation of a carbon-free MW ultra-super critical society. In the Asia-Pacific steam turbine and generators for a coal-fired region, Toshiba also enjoys over 50 years of power generation project — state-of-the-art green energy footprint. “We have contributed technologies that lessen CO2 emission. to the stable supply of energy to support Asian With Asia poised to continue growing countries’ strong economic growth by providing highly reliable systems,” Aburatani shared, adding at a rapid pace over the next few years, energy demand will continue to grow with it. that their long-standing personnel expertise Toshiba, as it has been doing throughout the have also helped to not only raise the company’s decades, will continue to offer efficient and already high standards, but also help raise the effective solutions to meet this need. “Asia quality of energy supply and sophistication in the is an important market for Toshiba, and we region. established Toshiba Asia Pacific Pte. Ltd. in In Vietnam, Toshiba started with supplying 1995 as Toshiba’s regional headquarters for the four hydraulic turbines for a hydroelectric power Asia Pacific region, which oversees and supports station in the southern part of the country in operations in the region. As countries in the 1963 to supply electricity to the previously region continue to experience rapid economic fossil fuel-reliant industrial centres of Saigon growth, Toshiba is ready to offer energy (now Ho Chi Minh City) and Bien Hoa. Also, for solutions that are well-suited to their needs coal-fired power generation, Toshiba received and to ensure a low-carbon society,” Aburatani orders and will provide highly efficient thermal concluded. power generation solutions to contribute
The company is the leader in terms of share in geothermal turbine generators. Image is copyrighted by Ormat Technologies, Inc. ASIAN POWER 19
sector report: Solar
The sun is not setting on Southeast Asian solar
Southeast Asia’s solar industry thrives amidst dimming market expectations Just when everyone thought that the solar boom will start fizzling out due to markets nearing saturation, Southeast Asian countries show they are not yet done harnessing as much as they can from the sun.
hen forecasters proclaimed slower solar photovoltaic (PV) installations worldwide this year as developed markets near saturation, it put investors under even more pressure to determine whether Southeast Asia would be the next fountain of solar growth. Analysts see the potential of this region of roughly 600 million people, especially as governments and developers have started to untangle the web of strict regulations, outdated technology and poor infrastructure that has been constricting investment in Southeast Asian solar projects. But the sheer amount of work to be done puts the region a long way off from reaching a solar renaissance. “As renewables markets mature, renewables investors are looking to new markets for their next source of growth. Solar PV generation has great potential and has been the most attractive renewable energy source amongst the Southeast Asian nations,” said Eric Ho, director at Renewable Energie Singapore. “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,” he furthered, noting that annual solar radiation levels in the region ranges from 1,460 to 1,900 kWh/m2 per year. FiT to expand Feed-in tariff (FiT) schemes have been instrumental to solar PV growth in Southeast Asia. In Thailand, which is by far the largest producer of solar energy in the region due to strong government support, solar capacity has leaped in the past three years: From 1,299MW in 2014, and 2,021MW in 2015, to over 2,800MW 20 ASIAN POWER
Solar PV generation has great potential and has been the most attractive renewable energy source amongst the Southeast Asian nations.
in 2016, which is higher than those of all other Southeast Asian countries combined. Thailand is not looking to slow down its solar PV expansion anytime soon with a target to install 6,000MW by 2036. The country is also becoming a regional role model for Southeast Asian nations that are starting to scale up their programs. “Because of Thailand’s experience with large solar farms and its promoting policies, it forms a hub for PV testing services and a source for information. Solar energy projects are offered the highest feed-in tariff (FiT) subsidies,” stated Ho. “In the past years, several FiT programs for smaller solar energy projects were created with very attractive rates. By giving the highest FiTs to the smallest producers, the government aimed to promote green energy communities and small-scale rooftop programs.” Investors are also flocking to the Philippines, which until a few years ago had no solar industry until the country launched its FiT program. Installed solar capacity kicked off at 62MW in 2014, climbed to 108MW in 2015, then soared to 903MW in 2016 as 17 additional projects were awarded that year. This fast pace of expansion made the Philippines one of the the top 10 markets in the world in additions. “The FiT program drove solar PV development in the Philippines into high gear,” Ho noted. “Solar PV is expected to reach 3 GW of utility solar by 2022.” Dave Maslin, country manager for OWL Energy, reckoned the FiT process generated investor excitement when it was first unveiled but it was far from perfect. For one, the process had issues in transparency and guidance. After securing a service contract and Department of Energy (DOE) approval on its commerciality, the project developers were caught in a limbo:
sector report: Solar Thailand’s total installed capacity by source (in MW)
Malaysia’s total installed capacity by source (in MW)
Source: Solar Plaza
Source: Solar Plaza
It had no obligation to proceed but had the go-signal to begin construction. “No one knows what’s going in this stage, because during this period you don’t have to tell anyone what is happening,” said Maslin, explaining that whilst listed corporations were bound to tell their shareholders, private firms can wait until the construction is 80% complete before inviting the DOE for inspection. Despite these imperfections, the government was emboldened by the positive turnout of the first FiT program. It raised the target to 500MW and created the second FiT program. “Investors got really excited, but there are a few sticky points in this. There was no clarification on what happens in excess of this new target or whether the target referred to DC power that is constructed in terms of panels or AC that the grid purchases,” said Maslin. Singapore: No room for growth? Southeast Asia also benefits from the presence of a solar technology leader in the form of Singapore. With regional cooperation on the rise and Singapore’s significant allocations to renewables research and development — it allocated more than US$700m to strengthen innovation capacity in clean energy, smart grids and energy storage — technology and knowledge exchange should start to flourish. But on its home turf, Singapore is facing an uphill battle on how to foster solar PV growth amidst land area limitations. The nation has a small land area of 719 sq km, of which only 45 sq km is usable for solar PV installations, according to Gautam Jindal, research associate at Energy Studies Institute, National University of Singapore. The country is exploring offshore installations such as multimillion-dollar floating solar projects on its reservoirs. Late last year it debuted the world’s largest floating solar PV cell testbed at Tengeh Reservoir in Tuas. “As a highly dense city state with limited space for solar deployment, Singapore is placing emphasis on building up urban solar capabilities which include floating solar as a key focus area. Singapore is also positioned as a living lab for companies to test and commercialise innovative urban solutions,” noted Goh Chee Kiong, executive director for cleantech at EDB, which led the initiative together with the national water agency PUB, was quoted as saying during the project unveiling. One of these urban solutions is energy storage, which can help incorporate increasing solar output into the grid by addressing its solar energy’s inherent limitation as an intermittent generation source. “It is something that’s been said in the open, and it is going to happen,” said Jindal, noting remarks by the trade and industry minister that Singapore can now incorporate 1GW of solar PV, up from 350MW in 2014. When asked what other moves Singapore can undertake to strengthen its local solar industry, Jindal suggested reducing dispatch intervals to match global best practice to encourage the use of energy
Van Hai Nguyen
market for low frequency variability rather than having to use regulation or reserves. “Most markets in the US and Australia, for example, go for 5-minute intervals for dispatch rather than having an hourly or half-an-hourly dispatch,” he said. Jindal also recommended pushing for shorter gate closures that can improve forecast accuracy, adopting a more dynamic process to determine regulation, and incentivisation of and improved policy consultation for energy storage systems. Malaysia: Casting a wider net In Malaysia, net metering scheme has emerged as a supportive growth complement, and eventual replacement, to FiT. The country introduced the net metering scheme (NEM) last year with 500MW targeted in 2020 in Peninsular Malaysia and Sabah. It then introduced guidelines earlier this year that outlined who would be eligible to apply (registered consumers of distribution licensees that are on good bill payment standing) and what PV systems will be accepted (rooftop and garage panels, car park systems and other similar buildings are accepted, but groundmounted systems will be assessed individually). Overall though, the NEM is seen as a smart move to fuel the Malaysian solar market’s ambitious aspirations. The country wants to roughly quadruple the current 338MW solar PV capacity installed to 1,356MW by 2020, which it hopes is enough to make it the second largest producer in the world. Malaysia is embarking on NEM “as an attractive method to drive solar energy growth” says Datuk Seri Dr Zaini Ujang, secretary general of Malaysia’s Ministry of Energy, Green Technology and Water. “With the NEM in place, consumers can generate their own electricity with one meter installed and sell excess power to the national utilities,” said Ho, adding that Malaysia’s overarching policy framework for clean energy development has provided “a strong foundation for significant deployment of renewable energy and energy efficiency.” Vietnam and Indonesia: Growing pains The importance of a sound policy framework, especially in wooing investors and fostering sustainable growth, is coming to the fore in Vietnam and Indonesia. Both countries are experiencing growing pains when it comes to finding the right approach to spurring solar PV to hit their ambitious long-term targets and ensuring cheaper and wider access to electricity for all. In June this year, Vietnam saw the implementation of a critical policy for solar power project development and private investment in the form of Decision No. 11. The FiT for grid-connected projects at the delivery point was approved at 2,086 VND/kWh or 9.35 US¢/kWh, exclusive of VAT, for solar cells and modules that reach more than 16% and 15% efficiency, respectively. Ho explained that tariff is adjustable for foreign exchange fluctuations in accordance to the standard power purchase agreement, which has a 20- year term with ASIAN POWER 21
sector report: solar REGULATORY ROUNDUP
Indonesia’s total installed capacity by source (in MW)
What Vietnam’s Decision 11 means for solar companies Decision 11 is the first Vietnamese legal instrument that specifically governs the development of the country’s solar power sector. It sets out the general legal framework for developing solar power projects and provides for a feed-in- tariff under which the single offtaker (i.e. Electricity of Vietnam (EVN), a 100% state-owned entity) will purchase solar power from generating companies. The tariff is set at US$0.0935 per kWH. Prior to Decision 11, there was no regulatory guidance on how to invest in, and operate, a solar power project in Vietnam, according to David Harrison, partner at Mayer Brown JSM. “Prior to its issuance, a few projects were developed on an ad hoc basis. Overall, Decision 11 is a positive development as it sets out a roadmap with expectations and understandings on the tariff, investment incentives, and the regulatory process that will guide sponsors, financiers, and government agencies,” he said. The introduction of a general framework for solar power projects is a welcome – and, in the minds of some investors, an overdue legal development.
Source: Solar Plaza
EVN as the sole buyer. For investors, this represents incentives in investment capital mobilisation, import duty exemption and tax reduction. The Decision also provides for a net-metering scheme for certain rooftop projects, with a scheme that award credits to owners that generate more electricity that they consume, and allowing those credits to be carried over to the next payment cycle or even sold to EVN at the FiT rate at the end of the PPA. Like its Southeast Asian neighbors, Vietnam is looking to build its solar PV industry at a fast and furious pace. It installed approximately 4.5MW of solar PV capacity at end of 2014, 7MW at end of 2015, and a target of 850MW by 2020. “Decision 11 left many details unaddressed and given the un-bankability of standard PPA for wind and biomass, industry pundits are not expecting much from the solar standard PPA,” said Ho. “Policy is not that big of a difficulty as the strategic challenge to muster the political will to put policy into practice while effectively adapting it to evolving situations. Large scale solar investments are highly FiT sensitive. The challenge is to find an appropriate FiT level which still attract investments while maintaining grid stability in a rapidly declining solar price environment,” he added. Meanwhile, Indonesia approved a new renewable energy law that changes the remuneration tariffs for renewable energy projects, and brings hope on higher solar PV adoption, which until has been “slow and uneventful,” said Ho. “Stringent regulations, tariff uncertainty and more lucrative alternatives have left the solar sector grossly underdeveloped,” he added. “Currently only about 27MW solar capacity was installed, with a majority from state-sponsored power plants, the remaining capacity are small projects and home rooftop systems.” The recent tariff cuts have cast doubts on the prospects of future large-scale solar projects, Ho noted.The new law provides that the FiT cap is introduced based on the average electricity supply costs of the region where the renewable power project is to be developed. Where a region has supply costs above the national average, the FiT will be capped at 85%, but if these supply costs fall lower than the national average, then the renewable energy project will receive a FiT equal to the regional cost. Taking into consideration the national average supply cost in 2016 was 13,307 IDR/kWh or 7.4 US¢/kWh, Ho says the new decree implies a significant reduction in solar PV technology tariff from the previous FiT. “The new law puts solar power in direct competition with coal-fired power plants being the predominant form of power generation in Indonesia, making it extremely challenging for solar.” For Kirana D. Sastrawijaya, partner at Baker McKenzie, the new law seems geared towards supporting more smaller-scale solar PV projects and spreading those in more far-flung areas of the archipelagic nation. 22 ASIAN POWER
Vietnam is looking to build its solar PV industry at a fast and furious pace.
Is there a loophole in the guidance? Decision 11 still has certain limitations, said Van Hai Nguyen, associate at Mayer Brown JSM, some of which pertain to the Vietnamese power market in general, and others that result from gaps in the legal framework governing this Industry. “For example, Decision 11 does not provide for a direct PPA which would have allowed large corporate customers such as industrial parks or manufacturing facilities to purchase solar power directly from independent power producing sellers (IPPs). This structure was once considered in the context of wind power, but all power sales must flow through EVN,” Nguyen explained. Two significant and inter-related hurdles for solar power in Vietnam are lack of clarity about the ability of investors to benefit from a government guarantee of EVN’s obligations as the sole offtaker, and the quality of the draft template PPA. Decision 11 requires that the purchase of all grid-connected power must be based on a standard PPA template. Harrison said that the draft PPA template circulated in June resembles that of Vietnamese IPP wind power projects, as opposed to the more international standard, seller-friendly PPAs that are generally used on larger BOT projects after thorough negotiations. “Whilst local onshore banks may be comfortable with this form of PPA, it will likely raisesignificant concerns on bankability with offshore financiers as well as international sponsors. Below are some key concerns regarding the draft standard form PPA: Aligning the Standard Form PPA with International Market Practice. The PPA requires changes to the commercial operation date to be announced six to 12 months in advance of the scheduled date,” he added. Nguyen raised however, that this approach may not be workable in practice as delays are often unforeseeable. It is common practice for scheduled commercial operation dates to be extended after the plant’s construction has already been delayed if triggered by factors beyond the seller’s control. The PPA does not adequately address lender step-in rights or provide commitments on the part of EVN or other governmental agencies to enter into direct agreements. The PPA does not include a market standard exclusion of consequential losses that exempts each party from liability to the other for lost profits, revenues and other consequential losses. The PPA does not provide for offshore dispute settlement such as submission to the jurisdiction of an international arbitral forum. “There is no “take or pay” obligation and the PPA relieves EVN from its payment obligations even where it is unable to take power due to a breakdown of the transmission or distribution grid. Transmission and distribution risk would generally be assumed by the purchaser. Where the purchaser cannot take power due to a breakdown of the transmission or distribution grid, minimum take-or- pay obligations should remain in place as long as the plant exists,” Nguyen further commented.
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Country report: Malaysia
Malaysia is a long way off from seeing nuclear plants on its soil
Outdated regulations hamper Malaysia from making its nuclear ambition happen Malaysia has all the makings of a nuclear haven, except a robust and supportive regulatory environment as a new and comprehensive nuclear law is still lacking, and the current policies are already behind the times and technology.
apidly industrialising Malaysia has a long history as a nuclear player, but it is yet to convert its 45-year relationship flirting with the idea of harnessing nuclear power into a functioning, operational industry. According to the World Nuclear Association, Malaysia produced 147TWh gross in 2014, 74TWh (50%) of this from gas, 56TWh (38%) from coal, 13TWh from hydro and 3.5TWh from oil. Malaysia enjoyed almost 30GWe installed capacity in 2013, 51.8% of this gas and 25.8% coal. Government policy is geared to reduce Nuclear electricity generation 2010
Source: World Nuclear Association 24 ASIAN POWER
Malaysia is thoroughly prepared and has developed a considerable base of knowledge to make an informed decision about introducing nuclear.
reliance on natural gas by building coal-fired capacity, and further coal-fired plants are in the pipeline. However, the role for renewables and nuclear is bound to expand, by necessity if for no other reason. A stellar report card In January 2011, the Malaysia Nuclear Power Corporation was established to control and develop and launch the Peninsula’s first nuclear power plants (NPP). 2021 was set for the nation’s first operational NPP, with a second being added a year later. These relatively ambitious but also (at the time) achievable goals were set under guidelines originally established by the IAEA(Nuclear Energy Program Implementing Organisation). Two months later, Fukushima happened and the original timetable was pushed to 2030. The country’s plans to have in place three to four nuclear reactors providing 10 to 15% of Malaysia’s electricity needs by 2030 continue to remain unrealistic. However, it is not all doom, gloom and delays for proponents of the
nuclear industry. At the recent 8th Nuclear Power Asia conference in Kuala Lumpur, Minister in the Prime Minister’s Department, the Honourable Dato’ Sri Hajah Nancy Shukri struck a far more positive tone, stating that her nation is, “laying a strong foundation for a sustainable national infrastructure to render governmental, legal, regulatory, managerial, technological, human and industrial support for the nuclear programme throughout its life cycle.” Dato’ Nancy continued that the government is completely committed to further exploring nuclear as an alternative energy source and to establishing a “new, comprehensive nuclear law.” Just early this year, the very encouraging IAEA report on Malaysia’s basic readiness was impeccably timed the day prior to the opening of Nuclear Power Asia. On 6 March, Minister Dato’ Nancy received the final report of the Integrated Nuclear Infrastructure Review for phase one of three. The INIR, released highly positive indicators, confirming that Malaysia is “thoroughly prepared and has developed a considerable base of
Country report: Malaysia Peninsular Malaysia’s power development plan
Dato’ Sri Hajah Nancy Shukri
Source: Ministry of Energy Green Technology and Water
knowledge to make an informed decision about introducing nuclear power.” Dato’ Nancy revealed that the report makes five recommendations (primarily calling for greater government commitment and enhancing public awareness) and ten suggestions for areas of improvement but also listed the good practices that Malaysia should share with other emerging nations. Recognising public appetite or information and deeper engagement, the Minister added that, “We need to address a deep-rooted stigma and negative perceptions on nuclear energy etched in the hearts and minds of our public.” A nation poised The question remains the same: Will such positive strides convert to nuclear power being added to the energy mix anytime soon? Whilst it is accepted that the nuclear industry includes both power and non-power applications, it is nuclear energy that is most necessary in the growing kingdom. The agencies and stakeholders are in place: The Malaysian Nuclear Power Corporation, the MNPC, for instance, is mandated to spearhead the development of the first nuclear power programme, whilst Malaysian Nuclear Agency, often referred to simply as “Nuclear Malaysia”, and other relevant stakeholders are working together to support the nuclear development programme, with nuclear power added to the energy mix the most prized goal. Nonetheless, according to Dhana Raj Markandu, head of nuclear power project development, Malaysia has not yet made a decision on utilising nuclear energy for electricity generation. A generation ago, when oil reserves were discovered in Malaysia, the idea of nuclear power was put on hold and many of the activities revolving around nuclear power was scaled down to the research and development level. Alternative applications of nuclear energy in industry,
medical, agriculture and the environment including development of services and commercialisation of the technology were emphasised over power generation. Leading senior voice in Malaysian nuclear, newly-appointed director-general of the Malaysian Nuclear Agency, Dr Mohd Ashhar Mohd Khalid, agreed with describing a nation poised to take on nuclear power generation. “Nuclear Malaysia is ready to provide technical support in the event that the country is to embark on a nuclear power programme. More than 30 years’ experience in operating and maintaining a nuclear research reactor has given a very good insight towards the technology.” Where do we go now? Despite recent positive overtures from the IAEA, Malaysia has pushed its expected date to roll-out an operational NPP back to 2030. Nonetheless, the director-general, explained that the current non-existence of an operational plant does not mean that Malaysia does not already have a nacent industry. “Nuclear industry involves both power and non-power applications.” The Malaysian Nuclear Power Corporation is under statutory mandate to develop a nuclear power programme, while Nuclear Malaysia (the agency that is headed by Dr Ashhar) and other relevant stakeholders are working together to support the programme in various ways according to their roles and functions. “There are issues and challenges in ensuring the success of this programme, namely public acceptance, knowledge and human resource management, financial and industrial infrastructure readiness, safety and security, waste management, legislation, regulatory, et cetera,” explained Dr Ashhar. To address these challenges, IAEA has provided practical guidelines for newcomer countries to adopt in planning such a big task. This has assisted major stakeholders carry out their roles. Markandu agreed
Dr Mohd Ashhar Mohd Khalid
with his senior nuclear colleague and said, “More information can be disseminated to the public regarding the advantages and limitations of all the various sources of electricity currently being used and the role that each of them plays. This will help promote greater appreciation the various factors to be considered for electricity generation, namely economics and affordability, security and diversity as well as the environment.” Despite the Malaysian government’s claim that it hopes to generate figures close to 5% economic growth this year, low fuel prices are hampering the energygenerating powerhouse’s ability to expand according to Markandu. Lack of competitiveness “One of the challenges faced is the apparent lack of economic competitiveness of nuclear energy in the current environment of low fossil fuel prices. In this context however, the solution is to recognise that nuclear energy is a long-term option and that it is impossible to predict the volatile costs of fossil fuels on that timescale.” According to Markandu, the adoption of nuclear energy, along with the deployment of other (renewable) energy sources, should be viewed from the parallel perspectives of decarbonising the energy sector and diversifying the national energy mix. As with most elements of the nuclear debate, the long-term outlook must prevail. Whilst the dual challenges of overcoming negative public perception and low fossil fuel energy costs exist, Dr Ashhar is adamant that Malaysia can take the lead, at least in the region, regarding alternative applications of nuclear technology. “More countries are expressing interest and planning to use nuclear energy for electricity generations in the future including the use of nuclear technology for non-power applications which will present great opportunities,” he said. In terms of nuclear power generation, scaling down in order to reach the goal of going nuclear sooner rather than later, seems to be the name of the game.
Nuclear power in Asia
Source: IAEA ASIAN POWER 25
ANALYSIS: Korea’S NUCLEAR DECISION
Can Korea commit to sticking to renewable energy sources?
How will Korea’s abandonment of nuclear power affect its energy sustainability? Korea joined the fray of countries that vowed to eventually ditch using nuclear power for good, but energy experts are doubtful whether Korea, a country well-entrenched and well-connected in the nuclear industry, will survive.
he Asian nuclear industry is suffering somewhat of a minor meltdown with Korea being the second nation in a little over half a year to jump ship on nuclear. A major global producer of nuclear energy, South Korea entered the NPP community in the 1970s. It now is a major exporter of nuclear technology and NPP construction and is heavily involved in a number of projects in the Middle East. This 180 degree turn on nuclear will have aftershocks felt long into the future, especially following the abandonment of nuclear by Southeast Asia’s most advanced nuclear market,
Although such a decision is sovereign to the people of Korea, there is a definite doubleedged sword dangling over the Republic’s energy sector.
Generating capacity of top ten largest operating nuclear power plants (as of end of 2015)
Source: EIA 26 ASIAN POWER
Vietnam last November. Seven months ago the Vietnamese parliament voted overwhelmingly to walk away from nuclear citing a number of safety, political and potential national security concerns. Alongside the standard reasons for scrapping nuclear, such as project costs and lack of public acceptance, Vietnam’s plants bordered the South China Sea and with growing unrest hovering over those waters, the Southeast Asia’s most sophisticated nuclear state failed to hold its nerve. Analysts would be forgiven for thinking that this similarly sudden decision by the Moon Administration, is based on a number of common foundations. Not only was scaling down to eventual abandonment an election promise of the centre-left President Moon, but South Korea’s nuclear facilities are within easy striking range of the ROK’s volatile and erratic neighbor to the north. Even the threat of such a strike on the nuclear infrastructure of the densely populated nation would raise the emergent need for immediate mitigation by any new government trying to make its mark on national security.
From a political perspective, Korean nuclear, and more generally Korean power, is graft laden. As an election pledge, then presidential candidate Moon promised to take his geom to graft and cronyism, including the ills of the chaebol system. But scandal and the Korean power sector have from time to time been almost synonyms. Four years ago, scandal emerged involving forged safety certificates and the use of counterfeit parts in NPPs. Two plants (Kori 2 and Shin Wolsong 1) were shutdown as a result, later in the year scores of power industry executives were arrested and indicted for the falsification. The indicted included those at the very top of the power industry, a former chief executive of Korea Hydro & Nuclear Power and a vicepresident of Kepco. President Moon was elected with a strong mandate, in large part due to his vows to act like all good populist leaders should, in the words of another world leader, ‘Drain the swamp’. “In our view,” said Ambassador Ong Keng Yong, Executive Deputy Chairman, S. Rajaratnam School of International Studies and former ASEAN Secretary-
ANALYSIS: Korea’S NUCLEAR DECISION The government is planning to increase the ratio of power generation based on new and renewable energy sources to at least 20% in this regard, but it is still insufficient.
Nuclear energy worldwide
Sources: IAEA, Statista
General, “The South Korean nuclear industry is well-entrenched and wellconnected; so it remains to be seen how it can influence the government, apart from President Moon, on the electoral promise, in terms of moderating it.” Ambassador Ong continued that although such a decision is sovereign to the people of Korea, there is a definite double-edged sword dangling over the Republic’s energy sector. “From the standpoint of environmental concerns, pursuing renewables should always be welcomed and encouraged. At the same time, it should always be checked with the actual potential of renewable sources in Korea - there may not be sufficient renewable sources to offset the base-load electricity that could be generated by nuclear.” The Ambassador added that scrapping a plan to build new reactors and implementing bans on extending the life of older reactors will decrease the total installed capacity by a few gigawatts, a precious margin to Koreans. A shock to the system President Moon is not prevaricating in implementing his election promises. A former student activist and human rights lawyer, he fully understands that he was elected on a mandate of change and re-building the general public’s confidence in its leaders, following the successful impeachment of conservative Presendent Park Geok-un. President Moon has promised to suspend any current construction of new NPPs as well and scrap all construction plans. While the populist President will be applauded by his supporter-base for backing election promises, the impact on the Korean economy of this decision will be significant. Twenty-five reactors in the Republic supply one-third of nation’s electricity. Until the election of President Moon, nuclear energy remains a strategic priority for South Korea, with a planned increase by 70% to 38 GWe by 2029, according the World Nuclear Association.
South Korea is highly dependent on nuclear: the nation imports 96% of its energy. Approximately one third of all imports, equivalent to $170 billion is spent on energy (2011) and scrapping nuclear will add $20 billion to this bottom-line. More significantly, if the President’s election promise fully materialises, South Korea will lack energy for the short-term at least and energy prices will rise. “The government is planning to increase the ratio of power generation based on new and renewable energy sources to at least 20% in this regard, but it is still insufficient,” said a June 8 Business Korea report. “No country in the world has given up on both nuclear and thermal power plants at the same time while increasing the use of alternative energy sources,” said Professor Jung Bum-jin at the Department of Nuclear Engineering of Kyung Hee University in the same report. President Moon is planning on turning toward LNG and alternatives to solve the self-inflicted power pain that his nation is about to suffer, but history suggests that these sources will not immediately fill the void left by abandoning nuclear. Lessons from the German experience The German experience in heading down the abandonment road should imbue the Koreans with a strong sense of foreboding. The two countries are extremely different in terms of their nuclear reliance, accessibility to cross-border nuclear energy purchase and technological advancement with respect to renewables. Yet, German has suffered somewhat under the Merkel Administration’s decision to clear NPPs from German territory. Within weeks of the Fukushima incident, Chancellor Merkel, who governs by weak coalition, was faced with a blitzkrieg of public protests forcing her to reconsider the German energy mix. Almost 50% of aging German
reactors were closed within a relatively short period following Fukushima, followed by the promise to phase out nuclear by 2022. But, and it’s a very important ‘but’, Germany has the option to purchase electricity from its nuclear behemoth next-door neighbour, France; and Germany is far further down the technological road in terms of renewables than Korea, which is surprisingly not particularly a leader in this area (although that is going to have to change, if President Moon proved determined to cancel nuclear and coal). Germany is not without significant energy-related problems, despite its massive industrialised economy, huge consumer-based, and its advanced R&D in and use of renewables. The nuclear rich French, despite a smaller GDP than their eastern neighbour, pay half as much for electricity as do Germans, with one Economist commentator famously saying that Germany has made some unusually big mistakes in realigning its national energy policy, in particular, “abolishing nuclear power so quickly is crazy. But Germany’s biggest error is one commonly committed by countries that are trying to move away from fossil fuels [and nuclear] and towards renewables. It is to ignore the fact that wind and solar power impose costs on the entire energy system, which go up more than proportionately as they add more.” Such analysis of the German energy condition provides a serious cautionary tale for Korea. If the central European giant still remains troubled by its abandonment decision, then surely a similar but compounded, fate awaits its East Asian nuclear colleague. Some nuclear industry stakeholders are bound to rejoice at President Moon’s decision. South Korea is an advanced and established nuclear nation, a first generation nuclear player. The nation is major exporter of technology, partnering with a far-reaching group of emerging nuclear nations including India, Indonesia, Malaysia, Jordan and the UAE, and supplies nuclear tech and engineering to fellow established nation, China. With reports from Simon Hyett
South Korea total primary energy consumption by fuel type, 2015
Source: BP Statistical Review of World Energy 2016 ASIAN POWER 27
Analysis: OVERCAPACITY IN CHINA current mechanism due to limited track record. In the meantime, the NDRC announced plans to refine the tariff structure in relation to certain surcharges and levies to alleviate the cost pressures on coal fired gencos. The refinements will result in a tariff hike of roughly 2%-5% varying across provinces, which will provide a modest relief to gencos. The tariff adjustment was effective from 1 July 2017.
Government support for the major coal-fired gencos is unlikely to diminish
China clamps down on coalfired power utilities Coal-fired gencos will be required to have 15% of their generation from renewables, either through green certificates or building new renewable capacity.
hina’s major power generation companies (gencos) will continue to come under pressure, despite expectations that power consumption will continue to grow in 2017-2018, driven by economic rebalancing and government-led infrastructure spending. Coal-fired plants have been hit by high coal prices, overcapacity and competition, while renewable energy and nuclear power will continue to grow, supported by government initiatives. The pace of reform in the sector is set to accelerate, while government support for the major gencos and the two grid operating companies (gridcos) is likely to remain. The credit profiles of major gridcos and gencos are balanced by their strategic significance and strong domestic presence. High coal prices, overcapacity, and competition from clean energy are the key industry challenges and will weaken the credit profiles of coal-fired gencos over the next 12 months. At the end of 2016, coal-fired power accounted for 57% of the country’s total power installed capacity. Nevertheless, government support for the major gencos is unlikely to diminish given their high strategic importance to the local power sector. The recovery in power demand will also provide some support to the gencos. Based on the National Development and Reform Commission’s (NDRC) thermal coal price index, coal prices started to surge in the second half of 28 ASIAN POWER
The regulator aims to postpone and cancel at least 150GW of new coal-fired capacity, so that the national capacity of coalfired power plants will be within 1,100GW by 2020.
2016 from a low level at the end of 2015. The surge was driven by the Chinese government’s effort to reduce coal production to curb overcapacity. Although coal prices cooled down slightly after November last year, the overall price level remains high. Under the current tariff formula of coal power price linkage mechanism, the rises in the coal price in 2016 were marginally below the threshold to trigger a tariff hike in 2017. The next tariff review of 2018 will take place in late 2017 to reflect the cumulative coal price change. If coal prices remain at their current high levels for the rest of 2017, we expect the upcoming tariff adjustment will likely be a percentage increase of high single-digit based on the tariff formula. Coal fired gencos’ profit margin and credit metrics will then improve from the level in 2017. However, uncertainty remains over the execution of tariff adjustment under the
Overcapacity and competition The average utilization hours of coalfired power plants declined by 5% to 4,165 hours in 2016, compared with the same period a year earlier. Accordingly, the share of coal-fired power generation in the national power generation has gradually reduced to 65% in 2016, from 71% in 2014. We expect the average utilization hours will lower to 4,000 hours or less in 2017, despite capacity utilization of coal-fired power plants slightly recovering in the first half of 2017 as hydro power generation was temporarily tempered by weather. Selected gencos with efficient generation fleet and diversified portfolio, such as CR Power, will likely show higher utilization. Our expectation of a continuous decline is driven by overcapacity in the power sector and increasing competition from clean energy. In general, the designed capacity utilization for coal-fired generation facilities is around 5,500 hours in China. In view of the moderate power demand and rapid capacity expansion, the Chinese government is stepping up its measures to curb overcapacity, especially for coalfired power plants. The regulator aims to postpone and cancel at least 150GW of new coal-fired capacity, so that the national capacity of coal-fired power plants will be within 1,100GW by 2020. Among the 150GW, the government aims to achieve a 50GW reduction in 2017. At the end of 2016, the national installed capacity of coal-fired power was 943GW. From “Challenging environment continues, more opportunities in renewable energy“ by Moody’s Investor Service
Declining capacity utilisation in the last four years
Source: Moody’s IInvestor Service
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Renewable Energy recipes II – feasible sites for PV projects
ontinuing my series on recipes for procedures to support Asian countries in developing Renewable Energies, I am going to address the feasibility of sites for PV projects. One may think that it is obvious that some sites are not feasible: mountains, wetlands, rocky outcrops, coastal lines, water catchment areas and others. However the question then becomes are such types of sites really not feasible? Let us start by the basic ingredients, which can also be used as a check list. No need to go further if you cannot find the one before: power evacuation, orientation and area, slope, soil type, and access. It may strike some of us as odd, but the top selection criteria for a site for PV projects is the power evacuation. No generation project exists without transmission, so make sure that you have identified the transmission lines that are nearby, their capacity and the substations to where they are linked to. Some thumb rules: 33 kV lines: maximum 25MW for a single circuit and 50MW for double circuit; 132 kV: maximum 80MW for
ichael Graetzel of Switzerland, is announced as the winner of the 2017 Global Energy Prize for his “transcendent merits in the development of low cost and efficient solar cells”. The Global Energy Prize is the world’s leading prize for advanced energy research awarded annually and he will be honored as this year’s laureate with a nice gold medal (and the US$693,000 is a nice touch too). The announcement had all the trappings of typical of a big media release as well. However, like many prestigious prizes though, is it only a look down a nostalgic past – or for the solar industry, is this a sign of going back… to the future? Memory Lane Especially in the case of this year’s award, in the solar field, Michael Graetzel is renowned as the creator of the “Graetzel cells” which revolutionized solar energy research… 20 years ago. The fall of the Berlin Wall, dial-up internet, solar PV at $9 million per solar panel MW. Looking back, it’s rather unbelievable how much development there has been in the solar energy field, much less the transformation of renewable energy overall. Global solar capacity went from less than 200MW to over 300GW today with even more expected with commercialization of production and implementation now becoming quite commonplace. Solar is no longer a tech curiosity, it is an industrial sector. While the field of solar energy has since boomed, it has however, moved on as well, with his direction 30 ASIAN POWER
a single circuit and 160MW for a double circuit; 220 kV: maximum 180MW for a single circuit and 360MW for a double circuit. For all cases an overshoot of around 10% is possible for short distances, anything below 10 km. Grid substations This is also not a big problem since solar rarely will be generating the maximum AC nameplate capacity, which again allows the cables/conductors to be stressed for some short periods of time. It is important to get the right and accurate figures from the local transmission company or run some simulations of the transmission lines under the expected temperatures of the location. The numbers provided before may be optimistic for very hot locations with ambient temperatures beyond 45 to 50ºC. Second part are the grid substations. There are two checks: existing bays for connections or free space to add them and the existing transformers in case the power generated is intended to be stepped up due to limited local
consumption (typically the case). When you have understood that a certain capacity can be evacuated by the transmission lines nearby and accepted by the substation and that adding a bay or using an existing bay is possible and that enough transformer capacity is available or they agreed to add capacity, you may proceed to look at the site. The size or area of the site should match the capacity to be evacuated, but here look for as much land as you can and then if necessary choose within the available land. Use 2 hectares per MW, but understand that the right number is not “one size fits all”. Site latitude The footprint depends on the latitude of the site. The sun will cast shadow on the next row of modules and that will tell you how close or how far the modules can be. This clearly depends on the tilt of the modules which is directly linked with the latitude of the location. Next issue is the efficiency of the modules. The same area of module may yield, for example, from 300 to 360 Wp and that tells you that with the same area you could have 20% more of installed capacity. So 2 hectares per MW allows several efficiencies of modules including some thin film or also up to a high latitude of 40 to 45º. The orientation of the land is also very important. Is it towards south or north? Earth is tilted 23º in relation to the sun axis which means that below 23º north and above -23º south the Sun will actually come on both hemispheres.
Back to the future? – A shakeup in industrial solar in the Graetzel cells having been since somewhat sidetracked. Graetzel cells are dye-sensitized thin-film technologies which conceptually separate the functionality of silicon in providing the electrons and also the electric field to separate the charges and create a current, by having the dye-sensitized part provide the electrons and the semiconductor provide the transport. Practically, while such cells have had some issues due to sensitivity and stability, these are not necessarily deal-stoppers – more simply, the scaled industrial production went along the now “traditional” silicon route. The main production industry, especially in China, has moved on along traditional silicon solar cells development and efficiency gains in their refinement. Current trends even point to conversion efficiencies approaching the respectable high teens and sufficient to engender massive production and implementation scale up to take place. China in particular, has gone down such path as the practical means to drive industry
scale and it may be a sign of sector maturity that we think of silicon solar as being a respectably traditional industrial sector now. Remembrance of things past? Meanwhile, research and work has quietly continued along the Graetzel cell lines and efficiencies, stability and production sensitivities have also been quietly addressed and improved. In particular, the fertile nature of the Graetzel cell research field has led to a very recent surge in perovskite material based solar cells (PSCs) that have revolutionized the whole field of photovoltaics, with practical efficiencies reaching over 22% efficiency in 2016 from a start of 4% in 2009. Also, perovskite based Graetzel cells also open up a range of consumer convenience due to their flexibility and range of colors for instance in building structures, even transparent cells for use in window glasses. Like Henry Ford’s Model T, traditional silicon solar cells only came in black too – with peroskite, clear, rainbow, tutti-frutti, whatever colors and shapes may be opening up.
Solar power development in Southeast Asia
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
or emerging economies in Asia and beyond, ‘business as usual’ is no longer enough for hydropower development. Instead, transparency, inclusiveness, benefit sharing and environmental and social responsibility, are the key actions that stakeholders and project-affected communities are looking for when it comes to private sector operations. Likewise, investors exploring new opportunities in emerging markets want a clear understanding of their project’s environmental and social risks. Achieving sustainability isn’t easy. In Myanmar, for example, data gaps, lack of policy and clear guidelines deter quality private sector investment that can lead to long-term sustainability. Additionally, for companies investing in a sector like hydropower, understanding environmental and social risks in its entirety can be both overwhelming and daunting. Additonal policies While the SEA is not a prescriptive or regulatory document, it will give planners significant information about low-medium and high-risk areas for development. In fact, companies keen to pursue sustainable business operations will be able to use the SEA to better understand stakeholders’ environmental and social values and make informed decisions on where best to locate projects. The SEA will also provide recommendations on additional policies, plans and research required to fill in some of the existing gaps in information. 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 liberalize 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).
Benefits of using Myanmar’s strategic environmental assessment Here are three additional ways in which Myanmar’s SEA could benefit the private sector: Insight into stakeholder priorities and concerns: The SEA is a synthesis of numerous consultations, meetings, and engagements with a wide range of stakeholders from civil society, Union-level and regional government, private sector, NGOs, and research institutions. The SEA describes the stakeholder analysis process and provides insight into the main stakeholder groups for Myanmar’s hydropower sector. More details on stakeholder engagement can be found in the Key Findings from SEA River Basin Consultations. Recognize development opportunities and risks upfront: By not investing in environmental and social sustainability, it may make or break the bankability of a project. The SEA is a first step towards understanding broader environmental and social risks for hydropower development at the national level. This should enable companies to build upon this data to conduct cumulative
impact assessments and project-level ESIAs . By understanding and assessing risks upfront, projects improve their “bankability,” avoiding project delays, and improving reputation with local communities and stakeholders. Propose project site location responsibly: The SEAwillprovideaclearindicationofpreferableriver stretches or sub-basins for project development to meet Myanmar’s energy needs while avoiding significant environmental and social impacts. Depending on the site and project type, these impacts will vary significantly. Myanmar’s hydropower sector, indeed, has potential to grow. This is especially so with the government aiming to increase national generation to 16,665MW of installed capacity by 2030. However, as with other sectors, companies entering the Myanmar market should understand the full scope of developmental impacts. The SEA will get us thinking about the risks of ‘business as usual’ approach in hydropower development.