Energy Digital magazine - May 2017

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May 2017

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LAKE TURKANA AND THE FUTURE OF KENYA’S ENERGY LANDSCAPE

THE SECRETS BEHIND DYNEGY’S GROWTH AND INCREASING SUCCESS

THE BIGGEST SOLAR PRODUCING COUNTRIES BY 2020

SUSTAINABILITY = PROFITABILITY SCOTT TEW, EXECUTIVE DIRECTOR OF THE CENTER FOR ENERGY EFFICIENCY AND SUSTAINABILITY AT INGERSOLL RAND, PRESSES THE CASE FOR BUSINESS TO PRIORITISE ENERGY


Deliver an enhanced customer experience We can support your business to simplify its IT infrastructure and achieve its strategic objectives on its digital transformation journey. More than 8 million businesses across 170 countries trust us to keep their business ahead of the curve. www.business-solutions.telefonica.com


EDITOR’S COMMENT

SOLAR STRENGTH IT IS NO secret that the Middle East is home to more sunlight than most parts of the world. Indeed, the potential for solar power to generate economic growth is massive, especially given advances in battery storage technology. We start by looking at these recent advances and how the region can make the most of the abundance of natural power it possesses beyond oil. Our top 10 looks ahead to 2020 and forecasts the countries likely to be producing the most solar power. Sticking with sustainability, Ingersoll Rand presses the economic case for all businesses to adopt processes with the environment and communities in mind. Scott Tew, Executive Director of the Center for Energy Efficiency and Sustainability, outlines the need for business to prioritise, among other things, energy management. Other exclusive company insights this month include Dynegy, Lake Turkana Wind Power and Australia’s Level Crossings Authority. I hope you enjoy the issue, please follow and join the debate @EnergyDigital

Enjoy the issue! Tom Wadlow Editor tom.wadlow@bizclikmedia.com


F E AT U R E S

PROFILE

Sustainable business equals profitable business: 5 questions for Ingersoll Rand TECHNOLOGY

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HOW THE

MIDDLE EAST IS GOING GREEN 4

May 2017

LIST

6 20


C O M PA N Y PROFILES

26

Dynegy

USA & Canada

46

Lake Turkana Wind Power Africa

80

TNB Remaco Asia

60

Level Crossings Authority Australia

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Sustainable business equals profitable business 5 questions for Ingersoll Rand Scott Tew, Executive Director of the Center for Energy Efficiency and Sustainability, presses the case for business to prioritise energy management

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Wr itten by : T O M WA D L O W

PROFILE


S U S TA I N A B L E B U S I N E S S E Q U A L S P R O F I TA B L E B U S I N E S S

AS CLIMATE CHANGE remains top of mind for global leaders, businesses continue to recognise a growing need to incorporate carbon strategies into their business plans. While the key driver for carbon strategies is to improve the environment, such programs also have positive impacts on business performance. In fact, a study by the We Mean Business Coalition estimates that companies are achieving, on average, a 27 percent rate of return on their low carbon investments. Here to discuss the importance of carbon footprint management and energy efficiency solutions is Scott Tew, Executive Director of the Center for Energy Efficiency and Sustainability at Ingersoll Rand. Why do you think organisations should continue to prioritise energy management? Â At the most basic level, organisations and businesses should consider their role in fostering sustainability, especially as it relates to their contribution to energy consumption and greenhouse gas (GHG) emissions. Increasingly, the associated benefits

and return on investment for managing energy use is also becoming clearer. ENERGY STAR reports that organisations can achieve 2-10 percent annual energy savings through energy management improvements such as energy efficiency solutions, including optimised compressed air and HVAC systems. According to the American Council for an Energy-Efficient Economy (ACEEE), on a larger scale, fostering efficiency and lowering energy use also supports resiliency by improving reliability of power while keeping energy costs down in times of emergency and high demand. Not only do businesses improve their own resiliency through managing their energy use, but in doing so they also contribute to the overall resiliency of the surrounding infrastructure and grid system. For example, energy efficiency can help communities responding to severe weather events by providing a reliable energy supply and reducing overall electricity demands. In addition, energy efficient buildings that maintain comfortable temperatures can serve as shelter options for communities recovering from severe weather events, according to the ACEEE. 7


PROFILE Why energy efficiency vs. other solutions? There are many viable options for managing energy use and lowering GHG emissions, including investing in renewable energy sources, such as solar and wind, and implementing an internal carbon cap or tax. However, energy efficiency is often considered the low-hanging fruit of climate action strategies, given its low cost and overall ease of implementation. That said, organisations should consider all options and choose the solution that is best suited for their footprint, scope and goals. Depending on a business’ industry and location, different solutions may be more effective than others. At Ingersoll Rand, energy efficiency is central to our business and the solutions we provide customers. We believe in energy efficiency as a means to cost savings and a whole host of benefits as it relates to our own operations, products and services. Nearly 90 percent of our product portfolio directly addresses the demands for greater energy efficiency with lower GHG emissions. In addition, energy efficiency in products leads to higher levels of comfort and control in built environments, advancing overall quality of life. We see examples of how energy efficiency is driving improvements in buildings, homes, industrial spaces and transportation markets around the world every day. 8

May 2017


S U S TA I N A B L E B U S I N E S S E Q U A L S P R O F I TA B L E B U S I N E S S

What is the biggest misunderstanding when it comes to energy efficiency? The biggest misunderstanding about energy efficiency is that reduced energy costs are the only benefit. In fact, there are numerous benefits beyond energy savings. Energy efficiency also ensures that the energy that is used is more productive and, in addition, reduces indirect GHG emissions and pollution that leads to improved health, safety and comfort. An ACEEE report demonstrates this reach and reports that by 2030, the U.S. can avoid the output of a total of 800 power plants, thus saving 1 billion tons of annual carbon dioxide emissions with proper energy

efficiency programs and policies in place. Reducing pollutants at this rate could also improve overall health, addressing issues like chronic lower respiratory diseases through improved air quality. Moreover, energy efficiency in turn increases local grid resilience and can help support improved economic development. The U.S. economy is already feeling a shift on a large scale. In fact, the Sustainable Energy in America Factbook notes that there has been a 10 percent improvement in U.S. energy productivity over the past five years, meaning that the U.S. economy is using 10 percent less energy to power each unit of growth. 9


PROFILE

What are organisations already doing today to advance efficiency? Any best practices? As a whole, the industry is increasingly taking advantage of energy efficiency programs. The same recent Sustainable Energy in America Factbook suggests that such program spending has nearly tripled since 2007. This is significant growth, and organisations are increasingly making efficiency a priority and a commitment. For example, the U.S. Department of 10

May 2017

Energy’s Better Plants Program, a program that provides resources for industrial manufacturers to improve energy efficiency, asks participants to set a goal – typically to reduce energy intensity 25 percent over a 10-year period across all their U.S. operations. Because of these commitments, Better Plants partners – nearly 180 industrial companies, including Ingersoll Rand – have saved more than $2 billion in energy costs and avoided more than 500 trillion British thermal units (TBtu).


HEADLINE

Tell us what the future might bring for this space. As organisations evolve and weave sustainability into their core business, energy efficiency should continue to rise in prominence as an important part of an energy management strategy. On a global level, the United Nations Sustainable Development Goals is a great platform to guide us as we look to the future. In fact, Target 7.3

is centered on doubling the global rate of improvement in energy efficiency by 2030. Achieving that goal will require an increase in commitment, partnerships and progress around the globe. Given the numerous benefits associated with adopting energy efficient practices, we should expect this to play a key role in many sustainability programs, regardless of a business’ industry or location.

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TECHNOLOGY

HOW THE

MIDDLE EAST IS GOING GREEN

Karl Ove Ingebrigsten, Director of Low Carbon Power Generation Division at Lloyd’s Register, tells Energy Digital about the current innovations occurring in the green energy sector, and how the Middle East is adopting change W r i t t e n b y: N E L L WA L K E R


EACH YEAR LLOYD’S Register conducts its award-winning Technology Radar research, taking a global look at technology and its advancements across many different industries. The company is a technical and business services organisation, wholly owned by the Lloyd’s Register Foundation which is dedicated to research and education in science and engineering. Having begun as a humble marine classification society in 1760, the company now boasts around 8,000 employees across 78 nations, and is well known for its high levels of technical excellence. Lloyd’s Register’s Technology Radar research has previously focussed on the oil and gas sector, and more recently the low carbon sector, including nuclear energy, renewable energy, energy storage, and infrastructure. These are industries which have expanded enormously in recent years, competing strongly with fossil fuels, and technological developments have sped up in response to create some serious breakthroughs. Solar power especially has become sophisticated and efficient enough in recent years to compete with 13


TECHNOLOGY fossil fuel, the Technology Radar has found, and solar cells are having an extraordinary impact on the world of green energy. Current projects in the sector include the future commercialisation of a photothermal process which turns heat as well as light into electricity, a compound of perovskites that can be painted or sprayed onto surfaces and is cheaper than commercial silicon crystals, and research by MIT last year that proves solar thermophotovoltaics could outstrip traditional maximum efficiency of solar cells. One area which has developed

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particularly rapidly in recent years, thus becoming a great interest for Lloyd’s Register, is solar energy in the Middle East: a region not so well known for its green credentials, yet one which is swiftly catching up and making its own mark in the world of renewable energy. Energy Digital speaks to Karl Ove Ingebrigsten, Director of Low Carbon Power Generation Division at Lloyd’s Register, about the Middle East’s contribution to solar and the Technology Radar’s findings. “The report shows that industry experts are optimistic about the pace of innovation in the low carbon space, and it reveals which technologies will have the most impact on the sector,”


HOW THE MIDDLE EAST IS GOING GREEN

says Ingebrigsten. “600 professionals across the low carbon industry contributed their opinions and insight into the report, rating a number of technologies in terms of their potential impact, the time it would take for these technologies to hit the market, and how likely they are to be adopted. “Countries that have embraced renewable energy have seen the rewards. Investment grows, jobs grow, and there are economy benefits across the board; the Middle East is no exception. Technological developments are indeed making a low carbon future increasingly

viable, and driving down the cost of technology development and deployment is a key factor borne out of the Technology Radar Low Carbon survey. Developmental costs are still seen as the main barrier to low carbon generation; the Middle East is the region least likely to consider cost a significant barrier. Instead, respondents cite stringent regulations as the leading obstacle.” Still, solar energy is the most significant focus for renewable energy in the Middle East. Why? In

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Karl Ove Ingebrigsten Director of Low Carbon Power Generation Division

Ingebrigsten’s words “the sun never stops shining in the Middle East,” but the region’s optimism for this particular renewable goes beyond that: “An important realisation has emerged: the region is coming to terms with the impact of the ongoing low oil prices, issues in the wider MENA region, and growing concern with global investors. The shift in sentiment towards renewables is led 16

May 2017

by the government’s approach to accelerating regulatory policy. With Doha emerging as the 12th most polluted city in World Health Organisation’s ranking for 2013, sustainability has been at the forefront of all ongoing construction projects. Qatar has set initiatives in place to reduce its carbon footprint and enhance energy delivery by increasing the number of renewable energy schemes.” The UAE aims to have 30 percent of its power generation coming from renewable sources by 2030, with Kuwait and Qatar aiming for 15 and 20 respectively. Increased focus on green R&D in the region means progress has happened at an astonishing rate, one of the best examples being Oman’s Miraah project. It is set to be one of the world’s largest solar plants, saving 300,000 tons of emissions per year – the equivalent of removing 63,000 cars from the road. The majority of participants at a Lloyd’s Register briefing last November in Abu Dhabi agreed that the growth of this low-carbon market is no threat to the hydrocarbons business, which will still be a primary source of


HOW THE MIDDLE EAST IS GOING GREEN

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TECHNOLOGY

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HOW THE MIDDLE EAST IS GOING GREEN

energy for five decades; rather, renewables open gateways for hydrocarbon producers, expanding the region’s energy portfolio and R&D capabilities. The GCC, a region with one of the world’s highest rates of pollution, has repeatedly solidified its status as an environmental ally, and does not take its aims lightly. “With 2020 rapidly approaching, those countries with percent targets are now looking to review their position, and determine relevant policy focussed on achieving targets set in Paris with longer term goals,” says Ingebrigsten. “The Middle East would benefit from an integrated energy policy, which would provide signposts to guide all the stakeholders towards a low carbon future. The adoption of new technologies to help define a low carbon future with widespread and cost effective implementation is the next step in helping the region realise this vision.” Ingebrigsten concludes: “The Technology Radar report acknowledges there is a considerable level of multilateral cooperation and collaboration already happening in the region – this has created a strong and united movement to see positive change. The findings in the report will also enable the industry to assess best practice and key stakeholders’ approach to sustainability, and to encourage ever-greater innovation in the region. It lies at the heart of what Lloyd’s Register believes to be essential for the future health of the Middle East energy industry, as the implementation of new technology has safety implications which are fundamentally a driver for the industry’s future.” 19


THE BIGGEST SOLAR PRODUCING COUNTRIES Energy Energy Digital Digital explores explores the the countries countries that that will will dominate dominate the the world’s world’s solar solar energy energy landscape landscape in in 2020 2020


T O P 10 OVER THE NEXT few years the global solar energy leaderboard is set to change significantly. As momentum for solar gathers in large countries like India and the USA, it has been predicted that these nations will a make massive leap forward on the global stage. Using data compiled by PowerWeb, we take a look at what the global top 10 energy rankings are predicted to look like in terms of installed capacity. Governments across the world have been implementing measures to encourage the uptake of solar at both a personal and grid level (using incentives such as feed-in tariffs) in recent years, with varying degrees of enthusiasm and success. Whatever the method, there is much promising data that suggests to the naysayers that solar can outperform traditional generation methods in many instances. Without further ado, here are the top 10 solar producing countries. W R I T T E N B Y: NYE LONGMAN

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T O P 10

10 Pakistan (10GW)

While Pakistan only became a solar country in 2012 when its first on-grid PV plant came online, the Southern Asian country has high ambitions. Central to its solar strategy is the Quaid-e-Azam Solar Park billed for completion this year which, once fully operational, will have a 1GW capacity and will be the largest of its kind in the world. Due to the recent fall in global tariffs, Pakistan is set to adopt power auctions which could further push down solar energy prices.

09 A ustralia (12.2GW)

Since 2009, Australia’s solar presence has snowballed, with its cumulative PV capacity of a few hundred megawatts growing to a healthy 5.7GW in 2015. To date, the country has nearly 20 solar projects (with a capacity exceeding 1MW) at various stages of completion. But these promising results don’t show the full picture. Despite high levels of sunshine and economic development, many have criticised the country’s relatively low global ranking and are demanding that the government do more to encourage the industry

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08 France (12.8GW) With a strong economy and welldeveloped energy sector, it is little wonder that solar took off in France. In 2016, French President François Hollande stood with India’s Narendra Modi to lay the foundation stone for the headquarters of the International Solar Alliance (ISA) in India. The institution aims to develop solar capabilities in countries between the Tropics of Cancer and Capricorn.


THE BIGGEST SOLAR PRODUCING COUNTRIES

07 UK (14.2GW)

The United Kingdom overtook France and Spain in 2015 in terms of installed capacity. Alongside major commercial solar installations, successive governments have supported initiatives that encourage solar panel uptake among schools and homeowners. Between April and September 2016, the UK’s solar panels produced more electricity than coal – on one particularly sunny day solar farms produced six times more energy than coal.

06 I taly (22.6GW)

Italy’s presence in the rankings is atypical since it is a net energy importer and lacks many of the assets of its peers. In spite of this solar makes up almost 10 percent of the country’s energy mix and is set to double in the next decade; Eurostat has even suggested that Italy could exceed its 2020 target. This method of power generation not only represents an opportunity for Italy to exploit a resource it has in abundance, but also a chance to reduce dependence on foreign generation.

Solar farm in Germany

05 Germany (48.4GW)

Germany has hit the headlines in recent years for making a number of significant commitments to renewable energy. Its Energiewende strategy aims to ensure that, by 2050, the country obtains at least 60 percent of its energy from renewable sources as part of its drive to slash carbon emissions. As Europe’s leading country for renewables, Germany boasts nearly 30 significant PV generation plants, which each generate at least 20MW annually. And, similar to the UK, the country is breaking its own solar records this year. 23


T O P 10

04 India (57.4GW)

Entering into the solar game as recently as 2011, India is predicted to make massive strides in production by 2020, with the World Bank providing $1 billion in lending in this year alone. And according to PowerWeb, its solar boom has only just begun, with the Modi government aiming to have an installed capacity of 100GW by 2022. As a developing country, solar also plays an extended role in heating

and purifying water in many Indian regions and exemplifies the potential to leapfrog generation methods used by more developed countries.

03 J apan (63.3GW)

With long established technology and manufacturing sectors, Japan was a natural early adopter of solar generation and continues to innovate in the sector, aiming for solar to meet 10 percent of the country’s energy demands by 2050. Japan is notable

A series of large solar panels forms a symmetrical line at a power plant in the San Luis Valley of central Colorado

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THE BIGGEST SOLAR PRODUCING COUNTRIES

for its Solar Ark building completed in 2002 which is one of the world’s largest solar buildings and serves to educate visitors about sustainability. A Japanese company recently made the world’s most efficient solar panel.

02 USA (85.3GW)

The USA has the technology, talent and environmental conditions required for large-scale solar rollout (not to mention the ever-increasing demand). But political support for renewables has been patchy to say the least, and with Trump threatening to withdraw America from the Paris Agreement the future for solar in America is far from certain. Nevertheless, the country’s solar prospects are far from bleak. A number of states have set high renewable energy goals and solar will inevitably make a significant contribution to these. As it stands, the US is home to many of the world’s largest solar installations, as well as advanced domestic capabilities.

01 China (130.4GW)

Frankly, China’s environmental record leaves a lot to be desired. This perception goes a long way

to explain why its recent efforts haven’t received much attention, despite the country expanding its solar capacity by 81 percent last year. The country is aiming to generate 20 percent of its power using renewable means by 2030 – a feat made all the more exciting given its previous track record. By 2014 the country accounted for as much as 70 percent of the world’s total installed solar thermal capacity – a trend it is keen to see continued. 25


An energy

BOOST for Dynegy Managing Director of Dynegy’s supply chain, Shaun Anderson, describes the company’s sensational growth and to what it attributes its increasing success

Written by Nell Walker Produced by Denitra Price



T

he Houston-based independent power producer (IPP) has 50 generating facilities in 12 states throughout the Northeast, Mid-Atlantic, Midwest and Texas. Dynegy has transformed from a coal-heavy portfolio of plants largely dependent on one power market, to one that is geographically diverse, generating more than 31,000 megawatts (MW) that are predominately natural gas-fueled – capable of producing enough energy to power the homes of 25 million U.S. families. Managing the supply needs of a group of this size can be a challenge. Shaun Anderson, Dynegy’s Managing Director of Supply Chain, explains how altering some of the most basic processes proved critical to driving down operational costs. “When I started two years ago, there was no supply chain organization,” he says. “Instead, a procurement group used a transaction-based process where a group of buyers would support the needs of each site individually. Recognizing there was an opportunity to put a purchasing strategy in place, we first established a true supply chain organization with three value streams of Strategic Sourcing, Supply Chain Services and Procurement.”

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“I intentionally named it

‘SOURCE-TO-PAY’ to build in strategic thinking” – Shaun Anderson, Managing Director Supply Chain

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“What you see in the market – the presentations, the articles, the talks about trading values, terms like ‘game change’, ‘new paradigm’, ‘transformative’, ‘disruptive’ – so much of that is hyperbole,” says Stefan Bungart, Head of Digitalization in the Power Generation Services Department of Siemens.

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performance. Really, what we’re trying to do is help our customers understand how they can use digitalization strategically.”

Power generation customers look to the company for simplified, focused, and tailored solutions. Siemens delivers a wide range of data-driven products and services to meet changing industry requirements, bringing technology together with customer challenges to generate real and meaningful value. Generally the focus lies within three focus areas – profitability, mitigating risk, th and improving performance – and Siemens supports customers to drive these goals.

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End-to-end cyber security is of paramount importance to Siemens, and that emphasis is what sets it apart from many competitors. It boasts a suite of services based on data and analytics targeted to a range of needs, including data protection, to ensure information and infrastructure are fully protected.

"While some see data as gold, simply collecting data for data's sake is no remedy. It requires the best possible technology to protect it and the best possible minds to interpret and realize its full value. It's not a question of waiting 10 years for digitalization to develop - it's here now and Siemens is at the forefront.

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DYNEGY INC.

Instead of setting up a centralized group to dictate to the rest of the company how things work, Dynegy’s approach is center-led. The team actively gathers input from members of the operations group to meet collective goals with standardized processes across the business. It focuses on leveraging and optimizing spending across the company, instead of just addressing

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opportunities on a site level. Dynegy’s supply chain group tailors the way it operates to meet specific business needs. Setting the company apart from others in the industry, Anderson has a ‘source-to-pay’ (S2P) process in place, rather than the standard ‘procure-to-pay’ (P2P) approach. “I intentionally named it


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‘source-to-pay’ to build in strategic thinking about sourcing as an early part of the process,” says Anderson. “The added step at the beginning gets our supply chain group involved even earlier to add even more value across the organization. Also, we initially had multiple systems within systems as part of the P2P workflow.

Now we use one common system, Maximo, to streamline activities.” The S2P process has been a key challenge to implement, but also a significant source of improvement to Dynegy as an organization. By the third quarter of this year, Anderson expects the S2P process

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to deliver significant efficiencies throughout the entire work flow, including operational site-level needs, inventory, work order creation, requisitions and purchase orders. Dynegy has grown through a number of strategic acquisitions in the last several years. As might be expected, some initial push-back was

present early on as cultures came together from different companies. To help manage the change involved with shifting to a different way of doing business, cross-functional teams were developed to enable strategic sourcing, regular meetings with key administrators, policy changes and other activities.

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A key element of the company’s drive towards integration is the ‘voice of the customer’ program, which ensures customer needs are heard and addressed to become part of the process. “The VoC program is where we have monthly meetings with the key administrator of each site,” explains Anderson. “We not only talk about things we’re trying to do differently

and changes we’re implementing, but we also get feedback from them as our internal customers on what’s working and what isn’t. We’ve had tremendous feedback in terms of the recent company changes.” In sitting down with Dynegy’s crossfunctional team members across the operations group and asking for advice from their perspectives, Anderson and his team can gather an

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“Inspired Energy ensures how people do things is as important as what they do and is based on Dynegy’s organizational values” – Shaun Anderson, Managing Director Supply Chain

accurate reading of how the company is performing. Similarly, there is now a center of excellence team which goes beyond the supply chain, where operational members can makes alterations on a policy level. “We utilize this team as a sounding board not only to get feedback on change, but also to help communicate and drive that change forward,” Anderson says. “Opposing cultures is an inherent challenge of company change,” he adds. “Dynegy is unique in that we have put things in place to address this from the first day an

employee joins the company.” For a company to be successful, it needs to win the hearts and minds of its people. ‘Inspired Energy’ is Dynegy’s program designed to consciously create a culture. The initiative is a system of shared language and concepts to build an environment allowing employees to be at their best. The program sets a tone to enable people to build camaraderie and focus on the task at hand. It helps them realize they each have a part in the company’s success and that their individual contributions matter.

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“Inspired Energy ensures how people do things is as important as what they do and is based on Dynegy’s organizational values,” he says. “Every employee goes through an initial Inspired Energy orientation, followed by a training several months later. The Inspired Energy culture gets

everyone is working on the same page. This type of change management at a foundational level is definitely an asset as we move forward.” Despite of the growing pains common with the kind of expansion Dynegy has experienced, the company is positioned for longevity

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and sustained success. With a strong, strategic focus concentrated on improving business processes, systems and tools while leveraging spend opportunities, the supply chain organization works on continuous end-to-end improvement that emphasizes total cost of ownership, and the integration of critical suppliers into business solutions for a lean, agile and responsive process. “We’re making sure we have the right systems in place that align with the business,” says Anderson. “Just

like Dynegy as a whole, the supply chain organization has gone through a transformation. We are intentionally integrated focus on aligning business needs with corporate objectives while providing added value, efficient processes and cost-saving throughout the company. Dynegy prides itself on being a lean organization that succeeds because we have the ability to get more out of less. We work smart and take full advantage of the technology we have at our disposal.”

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LAKE TURKANA AND THE FUTURE OF

KENYA’S ENERGY

LANDSCAPE W R I T T E N B Y DALE BENTON P R O D U C E D B Y KIRON CHAVDA


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Construction of the 310 MW Lake Turkana Wind Farm nears completion. However, there will be no time for celebration as Lake Turkana Wind Power plans to provide clean, low cost energy to Kenya for the next 20 years

A

fter nine long years of negotiation and preparation, 2.5 years of construction (including the installation of 365 wind turbines), the end of the incredible Lake Turkana Wind farm journey is just over the horizon. In June 2017, the 310 MW capacity Lake Turkana Wind farm will be ready for full commercial production. The goal? Providing the whole of Kenya with low cost wind power (to the national grid equivalent) to around 16 percent of the country’s current installed electricity generating capacity. All over the next 20 years. A moment of celebration surely, as the single largest private investment in Kenya’s history, but for Phylip Leferink, General Manager, and everyone involved in the project, the end of this

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journey is really only the beginning. “When we finish and Lake Turkana is online of course there will be some celebration, but we enter a new phase. Construction work may be over, but the work really is just beginning as we need to operate it over the next 20 years.” Everything has a beginning Leferink has been involved in the project from the very start, working in a sales director role with Vestas, the turbine manufacturer that has provided all of the turbines for the project, as well as operating in a joint venture (JV) capacity. “When construction started in late 2014, it soon became apparent that Lake Turkana Wind Power needed some additional experience, someone


“When we finish and Lake Turkana is online of course there will be some celebration, but we enter a new phase�

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who knows the various elements in the construction of wind farms. They felt I was the right person to help bring the project over the finish line and into operations,” he says. Leferink became General Manager in 2015, and through his work with Vestas he was best placed to fully understand the challenges that faced the company and more importantly, how to mitigate them. The location of Lake Turkana Wind Project is no coincidence. The area has been known for many years for its incredibly strong winds that swoop through the Kenyan Rift Valley, a “fantastic wind resource”. “The Lake Turkana Wind Power project is in a truly unique environment, with a unique wind resource. This whole process is the culmination of a project on a scale that has not been done anywhere else in the world,” says Leferink. But a fantastic wind resource is only one small element of the project. Lake Turkana is an isolated lake in northern Kenya. This presented a major challenge that needed to be overcome in order to push forward with the project - accessibility.

2014 THE YEAR WHEN CONSTRUCTION OF LAKE TURKANA WIND POWER BEGAN The lack of solid infrastructure pushed the project back into what Leferink describes as akin to an “offshore operation”. The assets required for the construction of the project, including some 360+ wind turbines, were shipped in to the port of Mombasa – the closest port. These assets, some 1,600 components, were then transported 1,200 km to Lake Turkana. “The existing roads quite simply were not good enough, so we upgraded some 208km of road in order to make it accessible,” he says. This lack of infrastructure created a real sense of risk with Leferink understanding that without a smooth supply chain, the project would not be delivered on time, if at all.

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LAKE TURKANA WIND POWER

“The value in identifying the logistical risks, mitigating them and planning for them accordingly, proved to be instrumental�

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May 2017


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Smoothing out the supply chain Fast forward to 2017 and Leferink can proudly point to a zero loss in time throughout the construction of the project. The secret to this success? Identifying the supply chain risk from the very beginning. “The value in identifying the logistical risks, mitigating them and planning for them accordingly, proved to be instrumental,” he says. “Taking the time out at the very beginning in the minutiae of detail has really allowed us to get to where we are today so successfully” A project of the size and scale of Lake Turkana Wind Farm can only come together through the successful collaboration of a number of key partners and contractors, each working on specific elements of the construction of the wind farm. The power of partnerships The final project, switched on and operating, could be considered the biggest achievement, but for Leferink, the successful and smooth interfacing of all the separate contractors and elements have

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been the key success criteria. Lake Turkana Wind Power invested in the services of Worley Parsons to act as the employer representative and manages the construction contracts. “The interface management has really been exceptional in scheduling and planning of work, so if a contractor were to fall behind, which is inevitable in this field, you can look at how we can bring it back on track,” he says. “You keep a daily watch on

the scheduling to ensure that nothing goes by without noticing, even if the smallest of changes happen you are on top of it almost before it happens.” The partners involved in the project have been influential, from Vestas as the turbine manufacturer, Physical building the local access roads, Siemens facilitating the substation and collection grid, RXPE supplying the STATCOM system and SECO, which built accommodation to house all of the contractors on site.

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LAKE TURKANA WIND POWER

The power of the people There is one partner in particular that Leferink feels is significant – the local community. Lake Turkana Wind Power has strived since the very beginning of the process to prioritise local employment in every aspect of the construction. Prior to Lake Turkana Wind Power’s investment in the local area, it was scarcely populated with little to no economic development whatsoever. “We are very committed to supporting local development of the area to make is as sustainable as we can,” he says. “The local employees we have employed will benefit from liveable pay, training and development so that when the construction is complete and they move on, they do so with the skills and capabilities to attain future work.” To date, Lake Turkana Wind Power (directly and through its contractors) has employed around 800-900 local employees out of the 1,700 people working on the project. Local employment is not the only visible benefit brought upon by the project. Through a commitment

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to sustainable development of the region, the company invests in a 20-year programme to provide infrastructure to the local area through the building of schools, health facilities and water provision. The importance of being a good corporate citizen is something that Leferink does not take for granted. The project represents an opportunity not only to benefit Kenya through clean low cost energy, but also to change the lives of the people in the local community. “A lot of the positive local developments happening in the area are largely incentivised by Lake Turkana Wind Power,” he says. “We believe a harmonious relationship with the communities around us not only benefits them but it helps in the development of the project.” One true vision As a private investment, Lake Turkana Wind Power does not rely on any governmental funding, but Leferink is keen to highlight the important role that the government has played and will continue to play

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LAKE TURKANA WIND POWER

in the success of the project. “The Kenyan government has been so supportive of this project from the start, the appeal of the project and the size of it makes it such an attractive development,” he says. This is evident in the significant role of Lake Turkana in the wider Kenya Vision 2030. Launched in 2006, the Kenya Vision 2030 is a vision of transforming Kenya into a ‘newly industrialising, middle-income country providing a high quality of life to all its citizens by 2030 in a clean and secure environment’. The vision is built upon three pillars: economic, social and political. The vision looks at large infrastructural developments in order to achieve its ambition – and Lake Turkana was well placed within that vision. “Kenya has a large energy landscape, which is quite unique both in Africa and on a global scale. You are looking at a 40-50 percent generation that is purely renewable energy,” Leferink explains. “In the bigger landscape, Turkana is

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quite fitting with what the government is trying to achieve in the long term – cheaper, cleaner energy,” To the future With construction nearing completion, all eyes are firmly set on the future. Working closely with its partners, Lake Turkana will closely monitor the performance of the wind farm over the initial 8-12 months. This will allow the company to overcome any teething problems from an operational perspective, enabling a smooth functioning facility for the remaining years. “It’s been a great journey,” says Leferink. “There will be a certain sense of emptiness when construction is over as the people will change and new teams will come in. We’ve had a strong relationship with all our contractors and we will feel sorry for when the end is there. But at the same time, we have accomplished what we set out to do and the next stage is upon us.”


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“IT’S

ABOUT LEAVING A

LEGACY” Written by Niki Waldegrave Produced by Josef Smith



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How do you update 72 kilometres of rail track while freeing up 225,000 square metres of green open space? Elevation! Brett Summers, Project Director for the Level Crossing Removal Authority, explains why.

T

he Level Crossing Removal Authority was established in May 2015 when the government pledged $2.4 billion from the 2015-2016 budget to remove 50 dangerous and congested level crossings across Melbourne by 2022. The Authority will ensure all level crossings are removed in a coordinated and efficient manner, and is responsible for all aspects of the project including planning and development, stakeholder engagement, procurement, through to construction and delivery. Project Director Brett Summers, a civil engineer, is heading up the $1.6 billion Caulfield to Dandenong Level Crossing Project to remove nine

Brett Summers project director for the Level Crossing Removal Authority

Brett has extensive leadership and project management skills developed in a range of multi-disciplinary large scale projects over varying industries spanning 18 years in both the private and public sector. With 12 years of rail specific experience he has delivered projects in both green and highly complex brown field environments. Brett previously worked with the Regional Rail Link Authority, Victoria Australia.

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of these level crossings, creating more capacity for trains to access the city, which is renowned for its ‘four seasons in one day’ weather. With six kilometres of elevated track involved, this is the first elevated rail project of this scale in Australia. He says: “Being in Victoria we have our own unique challenges with the operational environment. We’ve certainly looked to other projects around the world, to

take lessons from them and adopt them where we can.” What’s particularly interesting is the massive potential for innovation and design presented by the project’s use of an elevated rail option. Raising up three sections of the rail line will open up a linear corridor for the public to use, replacing what would be typically functional, uninspiring transport infrastructure with playgrounds, parks, cycle and pedestrian paths.

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“One of the reasons we were really intrigued by this solution is that of all the areas in Melbourne, this has some of the least amount of green open space,” says Summers. “That kind of set off a light bulb moment for us where we thought, ‘let’s take a nontraditional approach and consider elevating the structure’. Basically, everything we elevate, we open up that space underneath. “Historically, when level crossings have been removed in Victoria, the train line is dropped into a ditch and that’s it. But on

this particular job we’ve flipped that whole concept on its head.” In the end, there were several compelling factors that led to the choice of ‘rail over’ for the project, which is tackling all nine crossings as a package. Putting the rail line down into a trench would require three times the amount of rail closures and a dramatic increase in the number of trucks – particularly excavators - on the road. The innovative plans mean the area opens up to 225,000 square metres – that’s a whopping 11

“It’s actually about leaving a legacy behind that improves everybody’s lives”

RILEY RESERVE ACTIVE SPACE

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Melbourne Cricket Grounds’ worth of green open space. Local involvement But the proposed development of the nine-metre-high elevated rail hasn’t been without controversy. In December 2016, protest group Lower Our Tracks lost a Supreme Court bid to stop the project, claiming the Government failed to properly consult the public and kept the plans secret to avoid a political outcry.

Residents opposing it claimed it would lower property values due to being ugly and noisy, but Summers says opinions are slowly changing. “Obviously, the biggest challenge we’ve faced on this job is changing that perception and history that’s come before us,” he says. “Early on, that was a challenge, but over the last 12 to 18 months we have seen the pendulum swing from the broader community that can see the benefits.” Summers stresses the

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importance of the community having an active role in the future of the new open space, and has formed an independent expert panel to make sure the right mix of local knowledge and technical expertise feed in to the design. Chaired by the head of the Royal Botanic Gardens, Professor Tim Entwisle, the Community Open Space Expert Panel also includes members of local communities, councils, and organisations such as Bicycle Victoria, Victoria Police and the Office of the Victorian

Government Architect. They will present their recommendations to LXRA later in 2017. “A lot of it came back to wanting to leave a legacy behind,� he

51-200

Number of Employees at LevelsCrossing Removal Authority

& 2,000+ jobs created as a result of project

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explains. “This isn’t just about removing level crossings in a transport project. It’s actually about leaving a legacy that improves everybody’s lives there. A dedicated $15 million maintenance fund will be established to make sure the space is well-cared-for long after the project has wrapped up. But getting the community on board early on is just as important, says Brett. “If we want it to be nice and green – not graffitied or run down within five years, then we have to build something they’re

AU $1.6 BILLION Levels Crossing Removal Authority Annual Revenue passionate about. Because if we build something the community doesn’t want or embrace, they’re less likely to use it.” Summers says the Panel has spent the last 10 months brainstorming ideas, which they’re now testing with the

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just being a transport corridor to get from point A to point B.

CLAYTON ROAD ACTIVATED SPACE

broader public via an online portal. The community have also been given ‘carte blanche’ to submit ideas, which have so far ranged from bike repair stations to activity hubs and markets. “One idea is an open outdoor art gallery,” he reveals. “Taking the structural columns that actually hold up the elevated bridge and putting local community and artist artwork on there - you can wander between the columns and it becomes an open air, outdoor art gallery. So far the response has been overwhelmingly positive. People see it as a real key to those local precincts and it’s trying to change the mindset from it just being a transport corridor to get from point A to point B. “This flips that concept

Year Founded

2015

on its head and tries to turn some of these precincts into a destination. We see it as a catalyst for broader improvement around those local precincts. It’s no longer about catching a train to go through an area, it’s actually trying to encourage the community to visit, to shop and spend money in that area.”

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Sustainable He says raising the rail line rather than lowering it has benefits from an environmental sustainability point of view, including not needing to move infrastructure, like gas or water mains, or dig up contaminated material that’s been in the rail corridor for a long time. “All we do is once we actually elevate the train line,” he says, “is strip the surface off, so get rid of any of the nasty stuff, and then reinstate a beautiful linear park. And we can actually improve the natural environment. “One of the key design elements is capturing all of that storm water run off from the elevated structure, so from the bridge up in the air, and using it to irrigate the linear park.” It’s a game of many parts involving stakeholders from councils, Vic Track – who own the land asset – and Metro Trains, who run it. Summers believed it will be the local councils who are ultimately responsible for maintaining each element, “because it’s their constituents

that will actually be using it”. An initial payment of $15 million, funded through the Level Crossing Removal Project, will be set aside exclusively for maintenance. “It’s been hard,” he admits. “Trying to find that balance between green open space, plus car parking and playgrounds to support the rail environment and get the right mix. But another opportunity that comes with this linear park is we can actually replant trees. If you put a ditch in the ground, there’s no opportunity to really landscape. But we can replant thousands of plants that can grow to a mature height because the train line is now up in the air, which creates an ecological corridor for flora and fauna. “One of the key concerns from residents is there might be a community of birds or wildlife that live in an adjacent park. But by elevating the train line and reinstating a linear park, we’ll actually draw more wildlife to the area.”

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MAINTAINING

POWER Written by Wedaeli Chibelushi Produced by Vince Kielty


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TNB REMACO

WE INTERVIEWED TNB REMACO’S MANAGING DIRECTOR ANUAR YUSOFF ABOUT THE COMPANY’S DIVERSIFICATION PLANS

T

NB Repair and Maintenance Sdn. Bhd. (TNB REMACO) is constantly diversifying itself in riding the changing landscape of the industry. Leveraging on technological development and clientele everchanging expectations, TNB REMACO is set to become a premier brand with holistic solutions in delivering customer’s trust in its services. TNB REMACO is wholly-owned by Tenaga Nasional Berhad (TNB), of which is the largest electricity utility in Malaysia and one of the largest in the region with an asset base totaling USD30 billion and customer base of more than three million users. TNB REMACO was first incorporated as a subsidiary of TNB in 1995. The company is managed independently as a business organization within the corporate structure of the TNB group. While it shares the group’s core vision, values and culture TNB REMACO nonetheless remains steadfast in the

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realization of its own corporate destiny. Managing Director Anuar Yusoff explains the transformation in structure: “TNB REMACO used to be a small department supporting TNB generation. We did repair, maintenance and overhaul for their generating plants - their gas, steam and hydro turbines. It was in 1995 when we became a wholly owned subsidiary of TNB that we diligently gearing our resources and expertise in realization of the vision and mission of the company.” How does TNB REMACO balance diversification with loyalty to its parent power plants? “Previously, we are exclusively servicing TNB’s existing fleet of power plants but has expanded our services for newly developed power plants and has also actively providing services to independent power producers (IPP’s) such as Malakoff and Powertek, as well as oil and gas (O&G) sector,”


ASIA

ANUAR YUSOFF

MANAGING DIRECTOR TNB REPAIR AND MAINTENANCE SDN. BHD. (TNB REMACO)



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Anuar Yusoff explains. Among the O&G clients serviced by TNB REMACO are Petronas Gas Berhad (PGB), Petronas MLNG and GE Power. Not only is TNB REMACO diversifying from the traditional energy market, it’s also exploring different geographical spaces. “In the middle of 2004, we started going into international markets,” Anuar Yusoff explains. The company has business presence within the SouthEast Asia and MENA (Middle East and North Africa) region, such as in Myanmar, Singapore, Brunei, Indonesia, Yemen, Kingdom of Arab Saudi and Vietnam. Anuar Yusoff explains that TNB REMACO’s goal is to achieve 10 to 20 percent growth from overseas businesses: “I have to look at every opportunity to grow business locally as well as internationally. For the last three years,

we started going aggressively into the Middle East,” he says. Currently, TNB REMACO has three operations and maintenance (O&M) contracts in Kuwait, two in Pakistan and one in Kingdom of Saudi Arabia. Although TNB REMACO has built a global presence, its roots are firmly planted in Malaysia: “As of December 2016, we have executed a contract for a Long-Term Service Agreement (LTSA) with Petronas Gas Berhad (PGB), the national petroleum company of Malaysia,” Anuar Yusoff says. PGB awarded a MYR160 million contract to TNB REMACO for the maintenance of its gas turbine and related equipment for Central Utility Facility (CUF) in Gebeng and Kerteh, for a duration of 6 years. “Customer requirements keep on changing,” Anuar Yusoff says. “They keep on pushing their expectations.

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For an example, TNB used to carry out a planned maintenance outage for roughly 50 days in the late 80s, but now client requested for a shorter outage period, and we have to work 24/7 to fulfill their requirements. To support that, we need to have highly skilled and dedicated personnel, and the latest equipment.” When the petroleum price rise in the early 2000s, TNB REMACO losing some of these employees to the O&G sector. However, the firm worked hard to develop teams of adept and robust personnel, and during the last five years has managed to maintain a low turnover. Anuar Yusoff adds, “We have a good remuneration package that is within the best in Malaysia. In terms of competencies, we have a systematic training system which is conducted by TNB owned technical training centre, namely ILSAS. We have a training module where for the first three years of entering into TNB REMACO, all personnel will enrol into dedicated training modules that covers both

technical and management courses.” And in embracing the rapid development of the technological changes, TNB REMACO is keeping abreast with the changes by continuously developing highly skilled personnel. “In terms of technology adaption, we regularly maintaining the integrity of that equipment by sending our personnel for various training and certification program, as we definitely cannot afford to have failed equipment or incompetent personnel,” Anuar Yusoff explains. TNB REMACO also has established a comprehensive condition monitoring program for its client in ensuring reliability and efficiency of their equipment. TNB REMACO also prides itself by having a Repair Centre, which is located in Connaught Bridge, Klang. The Repair Centre can be considered a gem for the industry in view of its capabilities for performing various repair and refurbishment activities. TNB REMACO is collaborating with Original Equipment Manufacturers

1,000

Number of employees at TNB Remaco


TNB REMACO (OEM’s) for refurbishment of turbine parts and its components, apart from capability to perform bearing re-metalling, and reverse engineering services, just to mention a few of Repair Centre’s capabilities. TNB REMACO also prides itself on having a varied field of services offering to the potential customers. Anuar Yusoff says: “We call ourselves a one-stop service provider - any client in energy related industry can utilize our expertise and services. We can assist them to design and build a power plant, perform the O&M of the power plant, conduct scheduled maintenance for the equipment, perform the test and diagnostic activities and also refurbish the turbine parts. At the end of the power plant life or its Power Purchase Agreement (PPA), TNB REMACO can also perform the decommissioning of the power plant and sell the parts. In a nutshell, TNB REMACO is capable to perform various activities during the whole life cycle of the plant”. We ask Anuar Yusoff whether TNB REMACO has reached its full capacity. “Our target revenue in 2020 will be MYR1.9 billion and we will be

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going more aggressively to overseas market, especially Pakistan,” he stated. TNB REMACO also wanted to increase its presence in the oil and gas industry. Currently, its revenue comprises approximately 90 percent from power sector and only 10 percent from oil and gas sector. “In the current market condition for O&G sector whereby the petroleum price is dipping below USD60 per barrel, there is a promising chance for us in offering our services to the industry players. This is due to the fact that most of the O&G


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“WE CALL OURSELVES A ONE-STOP SERVICE PROVIDER - ANY CLIENTS CAN UTILIZE OUR EXPERTISE AND SERVICES” companies are currently opening its door for alternative service providers rather that exclusively engaging the OEMs, of which is of premium pricing,” Anuar Yusoff says. TNB REMACO also aspired to establish its name in EPC (Engineering, Procurement and Construction) business. “We aspire to be one of the reputable EPC contractor, because before this we were more involved in the Project Management and Consultancy (PMC), but not in the construction side. We are currently preparing ourselves

to enter into the EPC business.” Anuar Yusof’s vision for TNB REMACO is clear, and the expansion of business plan for TNB REMACO was built on a solid track record and coupled by its impressive expansion strategy. TNB REMACO is no longer in a single market platform, and has huge potential to grow rapidly whether it be internationally or into other sectors. We can’t wait to see what TNB REMACO does next.

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