VOLUME 10 ISSUE 1
ASIA’S HYDROGEN HIGHWAY Fintech in Energy
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UPCOMING EVENTS
CONTENTS Editors Note..................................................................................................................... 3 News.................................................................................................................................. 5 South Korea’s Energy Market - An Overview............................................................ 12 State-of-the-Art Gas Engine Technology Leaves Room for Customer-Specific Innovation..................................................... 18 The Role of Fintech in Green Finance Asia................................................................ 22 China Backs Fuel Cell Technology............................................................................... 38 Asia’s Hydrogen Highway.............................................................................................. 44 Hydrogen for better lives ............................................................................................ 50 Hydrogen, Instrumental in Diversifying the Energy Mix in Asia........................... 52 Events Listings................................................................................................................. 58 Advertisers Index............................................................................................................ 58
4 | POWER INSIDER VOLUME 10 ISSUE 1
NEWS
MAN Launch New CHP Plant in Germany MAN Energy Solutions is handing over a new solution for combined heat and power generation (CHP) to energy company EnBW Energie BadenWürttemberg AG. The 30 MW plant in the Gaisburg district of Stuttgart (Germany) commenced commercial operations at the end of December
Ale Completes 1000KM of Wind Components in Thailand
in specialist wind equipment, such
2018. At the heart of the plant lie three
as the unique RA4 tower clamps
MAN 20V35/44G gas engines, which
and the new K1650L tower crane.
produce not only electrical energy
Demonstrating their expertise
Manufactured specifically for the
but also 30 MW district heating.
in logistics, civils works and the
company to transport larger and
Operating at a total efficiency of up
complete turnkey solution, ALE
heavier components, the tower clamps
to 90 percent, the power plant makes
has completed the transportation
enabled ALE to comply with the
particularly effective use of its fuel.
of heavy wind components through
local weight and height restrictions.
The new gas engines are part of an
a challenging 1,000km route to the
Similarly, the tower crane was used as
extensive modernization program
Rom Klao wind farm in Mukdahan,
a cost and time effective solution to
for the HKW3 cogeneration unit in
eastern Thailand.
install the WTGs.
Stuttgart Gaisburg. In addition to the CHP plant, EnBW has also constructed
Starting in April 2018, ALE was
“This is a complex scope of work
a heat storage and a boiler plant with
contracted for the full-service package:
and route to be undertaken. The
up to 175 MW thermal energy output
the transportation, craneage and
new tower clamps enabled us to
to cover fluctuations in supply and
installation (TCI) scope of 13 wind
overcome the large diameters of
demand. The existing coal power plant
turbines, measuring up to 5.4m in
the tower sections and reduce the
was decommissioned when the new
diameter and weighing up to 125t. With
travelling height to pass under the
facility commenced operations.
a hub height of 162m, these will be the
restrictions on route. Combined
tallest wind turbine generators (WTGs)
with the tower crane, our equipment
in South East Asia.
and methodology has driven project efficiency,” explained Project Manager
This project faces numerous
Matt Thomson.
challenges, including the sheer size and scale of the WTG components
“We are really pleased to be involved
as well as the logistics and routing of
in a project of this scale. It really
components over such a vast distance,
showcased how we brought together
Jens Rathert, Project Manager at
with varying obstacles and levels of
different expertise within the Group
EnBW, said: “The reconstruction of
infrastructure across the country that
to achieve the safe and successful
HKW3 is part of EnBW’s strategy
requires additional civils work.
completion of every stage.”
for the energy transition, replacing an existing coal-fired plant with
In order to overcome these challenges, ALE has utilised their local routing and
ALE completed the full TCI scope in
a modern gas-powered CHP and
engineering expertise, and invested
January 2019.
boiler plant. By doing this, we are
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NEWS
significantly reducing the emissions
being brought to fruition in Stuttgart
been installed at Tata Power Delhi
of CO2 and other pollutants, which
Gaisburg. The concept works on the
Distribution’s Rohini substation.
is particularly important given the
modular principle and can be scaled
urban surroundings of the power
up as required from 7 MW.”
plant. Looking at the bigger picture
It is expected to provide better peak load management, system flexibility
of the energy transition, we regard
MAN Energy Solutions enables its
and reliability to more than two million
facilities like the HKW3 as a blueprint
customers to achieve sustainable
consumers, Tata Power said in a
for further fuel-switch projects and
value creation in the transition towards
statement.
relish the opportunity for more
a carbon neutral future. Addressing
projects along these lines.”
tomorrow’s challenges within the
The country’s first grid-scale battery-
marine, energy and industrial
based energy storage system uses
Gas engines provide high flexibility
sectors, we improve efficiency
Advancion Technology of Fluence,
and reaction speed
and performance at a systemic
jointly owned by Siemens and AES.
The CHP plant is a core element of
level. Leading the way in advanced
the modular concept of the new
engineering for more than 250
Battery-based energy storage enables
construction: While the gas boilers
years, we provide a unique portfolio
electricity to be stored and delivered
produce exclusively heat and are
of technologies. Headquartered in
within milliseconds, reducing instability
primarily designed to cover the peaks
Germany, MAN Energy Solutions
of the electric grid and enabling more
in demand over winter, the gas engines
employs some 14,000 people at over
energy to be captured and delivered
will ideally be run continually to
120 sites globally. Our after-sales
on demand.
provide both electricity and heat. By
brand, MAN PrimeServ, offers a vast
combining the facility with a district
network of service centres to our
India is working on a plan to increase
heating accumulator, EnBW can fully
customers all over the world.
installed renewable energy generation
utilize the flexibility offered by the
www.man-es.com
capacity to 225 Gigawatt by 2022 and
engines and react to price signals. When demand for heat is low, the waste heat from the engines can be stored. This flexibility is made possible
energy storage provides the flexibility
TATA Comission South Asia’s Largest Grid Scale Storage System
to better integrate intermittent solar and wind energy resources into the electric grid.
by the high reaction speed of the MAN gas engines, which reach their full
Commenting on the development,
output in less than five minutes and
Tata Power Chief Executive Officer
can handle load changes effortlessly.
Praveer Sinha said grid-scale energy storage will pave the way
Dr. Tilman Tütken, Vice President
for ancillary market services, power
and Europe Sales Manager for the
quality management, effective
power plant division of MAN Energy
renewable integration and peak load
Solutions, said: “Large gas engine
management of Indian grids.
power plants are a new but important
China Coal Projects Causing Discontent in Pakistan
technology in Germany: They help to reduce harmful emissions and guarantee an extremely reliable supply. Gas engine power plants
Tata Power today announced it has
The environmental impact of China-led
have the potential to replace coal
commissioned South Asia’s largest
coal-fired power generation projects
power stations in a way that is not
grid-scale energy storage system
in Pakistan is once again a hot topic
only effective but better for the
in Delhi. The 10 Megawatt (MW)
of debate, weeks after a meeting of
environment. Our modular power
energy storage system, owned by
government officials from both sides.
plant concept for cogeneration is
AES and Mitsubishi Corporation, has
A raft of Chinese power projects,
6 | POWER INSIDER VOLUME 10 ISSUE 1
NEWS
Development and Reform Makhdum
“There are many aspects of how
Khusro Bakhtyar in Islamabad, during
the environment will be damaged,”
which both declared 2019 the “Year of
he said. “These range from direct
Economic Cooperation.”
emissions when coal is burned to the effect on the environment when coal
But such cooperation has given
is transported.”
others second thoughts on China-led projects they criticize as having little
Many experts believe that the
consideration for the environment.
Pakistani government will defend
Analysts say the projects lack
its commitment to CPEC projects. It
including coal-fired ones, have begun
transparency and warn that Pakistan
will likely argue that coal emissions
to ease the acute electricity shortages
has been making blind commitments.
from Chinese power plants “are just
a minority within overall emissions
that dogged Pakistan’s industries and consumers until five years ago. At one
“One of the biggest issues is that we
across Pakistan. This will be meant
point, power cuts lasted for more than
just don’t know the full details [of
to pacify criticism over Chinese coal
half a day in the country’s major cities.
agreements involving CPEC projects].
plants,” noted Abid Suleri, an economic
Now, blackouts have been reduced
Unless that concern is addressed, we
adviser to the government who heads
by half or even more, according to a
remain in the dark on where these
the Sustainable Development Policy
projects will head in the future and
Institute, an independent think tank.
how coal will impact our country,”
Suleri, however, also called for more
Yet, environmentalists are up in
said Kaiser Bengali, a prominent
openness about the projects.
arms and blame China for exporting
Pakistani economist.
government official.
“Overall, we need to have greater
pollution. A senior government official in
transparency on CPEC-related
“It is China exporting messy projects
Islamabad rebutted such criticisms
investments in Pakistan,” he said.
to Pakistan,” one environmental
and instead pointed to the economic
Some Western diplomats who
activist in the southern port city of
benefits of the deals with China.
regularly track economic and
Karachi said. “Rather than relying on
Pakistan now relies on imported coal,
investment trends in Pakistan
coal-fired plants on their own soil, the
but it hopes domestic production will
go further, saying that detailed
Chinese have decided to export these
pick up so that the country can save
assessments of Chinese investments
problematic plants to Pakistan.”
large amounts of money spent on
on the environment may not even
energy, he said.
have been undertaken. “There is a
range of risks to the environment
Beijing’s presence in Pakistan has been a constant source of conflict within
“If we can make this transition from
with any new infrastructure project.
the country. This is in large part due to
imported to domestic fuel, that will
CPEC investments are mostly
power projects it has planned under its
help Pakistan reduce our bill for
infrastructure,” one diplomat said.
$62 billion China Pakistan Economic
energy imports, and that will give us a
“Coal-powered plants pose the biggest
Corridor, which forms a crucial part
very major advantage.”
environment risk. There should have
ambitious Belt and Road Initiative.
But Bengali said the government must
Pakistan and China decided to take
Newly planned electricity generation
assess the environmental impact
them on.”
projects were meant to showcase vast
of not just coal production but also
benefits for the South Asian country.
transportation of the fuel. Coal is
Others said Islamabad is in thrall to
imported via one of Pakistan’s ports
Beijing in part due to China’s clout as
In mid-January, Chinese ambassador
along the country’s southern coastline
the main supplier of military hardware
to Pakistan Yao Jing attended a
and supplied onward by train to coal-
to local armed forces, apart from
meeting with Minister for Planning,
fired projects located in the hinterland.
being the largest source of foreign
been detailed assessments before
of Chinese President Xi Jinping’s
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NEWS
investment. In other words, it is a
solar projects are now becoming
the sustainability and resilience of the
relationship that Islamabad would not
increasingly popular not only in
country, especially in achieving the
want to damage.
Malaysia but around the world.
target of reducing the production of
It is hoped that more Kedahans will
carbon dioxide emissions under the
take the opportunity to get involved.
2015 Paris Agreement.
“It is possible that Pakistan may take up different issues with China from time to time, but this is done
This announcement was made after
The 50-megawatt solar power station,
very discreetly,” one senior foreign
the opening of the 50-Megawatt
which began operations in December
ministry official told the Nikkei Asian
Quantum Solar Park in Malaysia
2018, is the largest in the north of the
Review. “I don’t think there can be an
recently. Quantum Solar Park’s Chief
country, and capable of generating
abrupt change to our commitments
Executive Officer was also present.
electricity for 30,000 households,
to China. This partnership [with
Meanwhile, the Chief Minister stated
while reducing carbon emissions by
China] is vital for Pakistan’s present
that the construction of the solar plant
21,000 tonnes annually.
and our future.”
in the Pendang district had indirectly
Malaysia Seeking More Solar Power Plants
made Kedah one of the leaders in the
According to a report published earlier
country’s solar industry and would help
by OpenGov Asia, the Malaysian
strengthen the state government’s
government (more specifically,
‘green’ efforts.
The Energy, Science, Technology, Environment and Climate Change
It was noted that the project is also
Ministry) announced that it aims to
among the initiatives to support the
have 18% of the country’s electricity be
objectives of the Ministry of Energy,
generated from renewable sources by
Science, Technology, Environment
2030, an increase from 2% currently.
& Climate Change (MESTECC) in
The Minister of Energy, Technology,
increasing the use of renewable energy
Science, Climate Change and
in Malaysia.
Environment had said that the ministry would have a series of meetings to
MESTECC was a Governmental
ensure the national grid is prepared
According to a recent report, the
agency established in 1992. It
to cater for this renewable energy
Malaysian state of Kedah recently
operates as the collection and
generation mix, as well as to study the
announced that it is inviting investors
dissemination centre for strategic
policies to meet its target.
to develop more green technology-
Science, Technology & Innovation
based projects in the state, especially
(STI) information in the country.
The view is to capitalise on future
those relating to solar power.
The agency also provides access
technological innovations, including
to STI information from various
industrial revolution 4.0 elements
The state’s Chief Minister said
institutions and acting as a linking
while retaining customers’ confidence
this would not only create more
mechanism among the policymakers,
through digitalisation of services and
jobs but also establish many new
fund providers, researchers/
improving customer experiences.
business opportunities in terms
developers, the industries and end
of the handling, maintenance
users. Our core business is to collect
RE usually depends more on
and installation of solar panels at
and disseminate strategic information
technology disruption that will come in
commercial and residential premises.
related to STI activities.
the next few years.
The Chief Minister noted that
The Chief Minister noted that the state
will decide on when whether the 20%
the state government is also
government will continue to support
target will be achieved. However, the
evaluating the entry of several new
the growth of green technology as a
Ministry affirmed its commitment to
solar projects, seeing as similar
new development model in enhancing
the cause.
How quick the technology evolves
8 | POWER INSIDER VOLUME 10 ISSUE 1
NEWS
its grids which leads to more older
for areas suffering from drought – and
This is RE is more than just being
plants continuing to be in use. These
could also improve fishing yields while
green; it is to make citizens’ tariffs
old plants would have been redundant
reducing algae growth.
much more predictable, of which
and phased out should China be
electricity right now is hugely
able to better utilize its generated
Google recently became the first
dependent on the global fuel price.
renewable energy.
company to make a purchase under
China’s Coal Plants Almost As Clean As its Gas Fired Facilities!
However, the country is certainly
the Taiwan Electricity Act. The project is expected to be completed in 2020.
making progress in its move towards green energy will coal consumption
The World Bank estimates a global
accounting for just 60% of China’s total
potential of 400 gigawatts for the
energy consumption last year, down
floating solar market. While the US
by 9.5 percentage points since 2012.
lags behind the Asia-Pacific region, the National Renewable Energy Laboratory
At the moment, with many coal
said in 2018 that as much as 10% of
plants still in operation, applying strict
US energy supply could eventually be
emission standards will go a long way
met with floating solar projects.
in helping to keep emission levels now. The capacity for floating solar is
Google’s First Floating Solar Project
soaring: in 2018, total installed
Google will build a floating solar
than 100 times the capacity in 2014
Top marks to the Chinese government
farm above fishing ponds in Taiwan,
of just 10 megawatts, according to a
as it reveals, three quarters of the
in the company’s first foray into
World Bank report published last year.
country’s coal power generation plants
Asia’s renewable energy market.
have been fitted with emission-
The company will work with Diode
In addition to avoiding land acquisition
reducing technology to make them
Ventures, Taiyen Green Energy, J&V
traditionally associated with solar
among the world’s cleanest coal plants.
Energy and New Green Power to build
installations, floating solar has the
To date, at least 700 gigawatts (GW)
the 10MW facility.
benefit, in some cases, of allowing for
worth of power plants have been
Floating solar farms have become
power generation to be sited much
capacity was at 1.1 gigawatts, more
fitted with “ultra-low emission”
popular in the Asia-Pacific regions
closer to areas where demand for
technologies, hitting the country’s
because they can be built over water,
electricity is high, according to the
target of having 580 GW of coal
negating the need for large tracts of
World Bank.
plants being equipped with the
costly land. Japan tops the world’s
technology 2 years ahead of schedule.
installations of floating solar; in China, the world’s largest floating solar farm
Asia Leading in IoT Adoption
Currently, emissions of soot, sulfur
was built last year over a lake that used
More than a third (34%) of businesses
dioxide and nitrogen oxides from
to be a coal mine.
now use IoT, and that 70% of these adopters have moved beyond pilot stage
China’s coal plants are at comparable levels to those of its gas power plants,
While floating solar farms tend to
and 95% of adopters are seeing the
meaning that their emission levels are
be floated directly on the water via
benefits of investment in this technology
lower than that of developed countries
pontoons, Google is considering a
as it moves into the mainstream,
by more than 50%.
canopy system which would see the
according to the findings of Vodafone’s
panels installed on poles, suspending
latest IoT Barometer.
China still continues to have
the structures over the water. The
While use cases for IoT are varied,
significant overcapacity in its power
canopies would provide shade to the
ranging from medical exoskeletons to
generation due to inefficiencies across
ponds, reducing evaporation – a concern
connected tyres, the research has found
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NEWS
that IoT impacts businesses regardless
Nelson, Head of IoT, Asia Pacific,
closer to the network edge, users can
of size and sector. Sixty per cent of
Vodafone Business. “Companies in
expect better performance, less risk and
businesses that use IoT agree that it
this region still have further to go in
faster data speeds.
has either completely disrupted their
developing their programmes to achieve
industry or will do so in the next five
all the possible benefits of IoT, ranging
Commenting on the results, Michele
years. Eighty-four per cent of adopters
from cost reductions to improved
Mackenzie, Principal Analyst at Analysys
report growing confidence in IoT, with
efficiency and even new business and
Mason said: “The Barometer makes
83% enlarging the scale of deployments
revenue streams. Organizations must
it clear that businesses are increasing
to take advantage of full benefits.
stay committed to this journey or risk
their investment into IoT as they gain
operating at a disadvantage. The time to
confidence and begin to develop more
invest in IoT is now.”
advanced solutions. In the short term,
The report also grades businesses in IoT usage by assessing strategy, integration
users of IoT will continue to access
and implementation of IoT deployments.
Stefano Gastaut, CEO IoT, Vodafone
reduced costs and improved efficiency,
Globally the report found that 53% of
Business, commented: “IoT is central
but increasingly ambitious projects
adopters fall into the top two levels out
to business success in an increasingly
will offer the opportunity to change
of five. Regionally, the Americas is the
digitised world, with 72% of adopters
business models. For example, in cities
most advanced, with 67% of adopters
saying digital transformation is impossible
heavy users of roads could pay more,
falling into the top two levels, compared
without it. The good news is that IoT
encouraging the use of different modes
to 51% in APAC and 46% in Europe. This
platforms make the technology easier
of transport with knock-on benefits to
suggests that businesses in the Americas
to deploy for businesses of all sizes and
public health and the environment.”
are progressing faster than those in other
NB-IoT and 5G will improve services and
markets, moving from individual projects
potential. In this climate, companies need
Vodafone IoT technologies are
to coordinated, strategic programmes.
to be considering not if but how they
embedded within connected vehicles
will implement IoT, and they must also
built by Aston Martin, Audi, BMW,
The most advanced companies also
be fully committed to the technology to
Mercedes Benz, Ford, Jaguar Land Rover,
saw the greatest return on investment
realise the strongest benefit.”
Lamborghini, Porsche, VW and Yamaha
in IoT. Eighty-seven per cent of those in
scooters. Vodafone’s IoT network and
the top level reported significant returns
Looking to the future, new technology
services also support smart meter
or benefits from IoT, compared to just
will continue to power the performance
capabilities for energy companies
17% in the “beginner’s” level. These
of IoT. Over half (52%) of adopters plan
including Centrica, EDF and nPower
benefits breed increasing reliance on IoT.
to use 5G, which promises to support
and provide connectivity for consumer
Seventy-six per cent of adopters say IoT
higher volumes of data, increase
electronics products such as the Amazon
is mission-critical. Some are even finding
reliability and offer near-zero latency.
Kindle and devices manufactured by
it hard to imagine business without it —
Combined with mobile edge computing,
Bosch, Panasonic, and Philips Lighting.
8% of adopters say their “entire business
which will process application traffic
depends on IoT”. “Asia Pacific is leading the world in IoT adoption with 43% of the companies in the region having adopted the technology in a bid to achieve a hyperconnected future. IoT delivers positive outcomes never envisaged in connected device business cases with insights often delivering fundamental transformation to marketing and distribution functions,” said Justin
10 | POWER INSIDER VOLUME 10 ISSUE 1
Dangjin Unit 4 in South Korea, which features our multi-fuel CFB technology, produces 105 MWe of power from palm kernel shells, wood pellets and coal.
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South Korea’s Energy Market An Overview South Korea relies on imports to meet about 98% of its fossil fuel consumption as a result of insufficient domestic resources. The country is one of the world’s leading energy importers.
improve the nation’s energy security,
South Korea’s economy is heavily
oil and natural gas companies are
dependent on export markets,
aggressively seeking overseas exploration
particularly within Asia. Exports in the
and production opportunities.
region have increased over the past two years, which has boosted South
South Korea was the world’s eighth-
Korea’s energy use. The country’s
largest energy consumer in 2017,
ageing population is expected to
according to estimates from the BP
dampen domestic energy demand
Statistical Review of World Energy 2018.
and the overall economic landscape over the long term.
South Korea’s highly developed South Korea ranks among the world’s
economy drives its energy
Although petroleum and other liquids,
top five importers of liquefied
consumption, and economic
including biofuels, accounted for the
natural gas (LNG), coal, crude oil, and
growth is fuelled by exports, most
largest portion (44%) of South Korea’s
refined products. South Korea has
notably exports of electronics,
primary energy consumption in 2017,
no international oil or natural gas
semiconductors, and petrochemicals.
its share has been declining since the
pipelines and relies exclusively on
The country also is home to one of the
mid-1990s, when it reached a peak
tanker shipments of LNG and crude
world“s top shipbuilding industries.
of 66%.This trend is attributed to the
oil. Despite its lack of domestic energy
Real gross domestic product (GDP)
steady increase in natural gas, coal,
resources, South Korea is home to some
has edged up since 2015 to 3.1% in
and nuclear energy consumption,
of the largest and most advanced oil
2017 as demand for the country’s
which has reduced oil use in the power
refineries in the world. In an effort to
exports strengthened.
sector and the industrial sector. Higher
12 | POWER INSIDER VOLUME 10 ISSUE 1
vehicle efficiencies have also reduced
recovery, higher industrial output,
beginning of 2017 by a joint venture
oil consumption (Figure 1).
more residential consumption, higher
between GS Energy Corporation and
volumes from private sector LNG
SK E&S Company. The facility added
importing companies, and restocking
about 145 Bcf to capacity. Both of
inventory levels by KOGAS.
these privately owned terminals have
South Korea currently has six LNG
very small capacities compared with
regasification facilities with a peak
the capacity owned by KOGAS.
capacity of 6.1 Tcf per year and an average estimated utilization rate of
However, these private operators
35%. KOGAS operates four of these
have been key contributors to the
facilities (Pyongtaek, Incheon, Tong-
rise in Korean LNG imports in 2017,
Yeong, and Samcheok), accounting for
and their terminals operate at high
about 97% of current capacity. The
utilisation rates compared with the
Following Japan’s Fukushima disaster,
Samcheok terminal, located on the
national average. Because of KOGAS’
South Korea’s problems with false
northwest coast, is KOGAS’s smallest
monopoly power and high LNG resale
safety certifications of nuclear parts in
terminal and was added in 2014.
prices, private industries have a greater
Figure 1. South Korea total primary energy consumption by fuel type, 2017
late 2012, and several earthquakes that have occurred over the past two years, the government scaled back its long– term plans to rely on nuclear power in its first basic energy plan in 2008 to its most recent power plan, the 8th Basic Plan for Electricity Supply and Demand, unveiled at the end of 2017. In its most recent plan, South Korea is
incentive to invest in regasification
South Korea now ranks as the third– largest global importer of LNG after Japan and China.
attempting to balance its fuel portfolio
capacity and purchase less expensive LNG on the global market. KOGAS purchases most of its LNG through long–term supply contracts, and the company uses spot cargos primarily to correct small market imbalances. Nearly half of 2017 LNG imports came from Qatar and Australia
to meet high energy consumption, to
KOGAS is constructing a small
(Figure 2). Indonesia was South
moderate its nuclear power generation,
terminal at Jeju Island and expects to
Korea’s first source of LNG and supplied
to reduce greenhouse gas emissions
commission almost 50 Bcf per year
more than half of South Korea’s LNG
and fine dust particle pollution, and
of capacity by 2019. South Korea
imports before 2000. As South
to offset some fossil fuel imports. As
is well–endowed with natural gas
Korea diversified its LNG imports to
part of this effort, the government is
storage capacity at its LNG terminals,
secure more sources of natural gas to
also promoting greater demand–side
and KOGAS’ goal is to hold 20% of
meet its growing demand, Indonesia
management, energy efficiency
their natural gas demand in storage
measures, and use of renewable energy.
by 2029.
Liquefied natural gas
The first privately–owned
After China surpassed South Korea
regasification terminal in South Korea
in LNG imports in 2017, South
came online in 2005. Pohang Iron
Korea now ranks as the third–largest
and Steel Corporation (POSCO) and
global importer of LNG after Japan
K–Power jointly own the Gwangyang
and China. In 2017, South Korea
regasification facility located on the
imported more than 1.9 Tcf of LNG,
southern coast. A second privately
rebounding after a recent low of 1.6
owned regasification facility at
Tcf in 2015. LNG imports rose 13%
Boryeong, located in the northwestern
in 2017 because of an economic
region, was brought online at the
Figure 2. South Korea LNG imports by source, 2017
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OVERVIEW: SOUTH KOREA’S ENERGY MARKET
lost market share to other countries
South Korea produced an estimated
Several large coal–fired plants came
including Qatar, Oman, Nigeria, Russia,
1.6 million short tons (MMst) of coal
online in 2016 and 2017, adding nearly 12
and Australia.
from its anthracite reserves, which
gigawatts (GW) of incremental capacity,
was a small fraction of its estimated
and South Korea’s manufacturing sector
Several South Korean firms own
primary coal consumption of 151
began to recover in 2017.
shares in liquefaction projects in the
MMst in 2017 (Figure 3).
Middle East, Australia, Indonesia,
These factors contributed to a 9%
and Canada and signed long-term
increase in South Korea’s coal imports
Coal consumption in South Korea increased by more than 50% between 2007 and 2017, driven primarily by growing demand from the electric power sector.
purchase agreements for LNG coming online from new liquefaction projects in Australia and the United States. KOGAS and SK Energy hold flexible destination contracts, which allow the companies to resell volumes in the open market, with the Sabine Pass and Freeport liquefaction terminal projects in the Gulf Coast of the United States. Sabine Pass began operations in 2017, and Freeport LNG is expected to be online in 2019. KOGAS also owns
in 2017. Australia and Indonesia historically accounted for most of South Korea’s coal imports (more than 60% in 2017). Russia and Canada are other notable sources. Coal imports from South Africa, Colombia, and the United States substantially increased in 2017 when South Korea required more coal (Figure 4). Coal consumption in South Korea increased by more than 50% between
shares in upstream exploration and
Because of this wide supply and
2007 and 2017, driven primarily by
production assets in natural gas fields
demand gap, South Korea is the
growing demand from the electric
around the world including Canada,
fourth– largest importer of coal in the
power sector. The electric power sector
Iraq, and Southeast Asia.
world, following China, India, and Japan.
accounted for more than 60% of the
Imports have risen in the past few years,
country’s coal consumption, while
Coal
from 131 MMst in 2010 to 165 MMst in
the industrial sector (primarily steel
Rising coal consumption in South
2017 as a result of the forced shutdowns
and cement) accounted for most of
Korea and negligible domestic
of some nuclear plants in late 2012
the remaining coal demand in 2017,
production resulted in the country
because of safety issues and because
according to KEEI.
having to rely heavily on coal
of precautions taken following a major
imports over the past several years.
earthquake in 2016. However, weakened
As part of the South Korean
In 2017, South Korea was the fourth–
power demand and delays in starting
government’s efforts to mitigate air
largest global coal importer.
new coal–fired plants since 2012 have
pollution and environmental emissions,
slowed the growth of overall coal imports.
the country’s 8th Basic Plan for Electricity
Figure 3. South Korea’s coal production, 2000-17
14 | POWER INSIDER VOLUME 10 ISSUE 1
Figure 4. South Korea, coal imports by source, 2017
OVERVIEW: SOUTH KOREA’S ENERGY MARKET
Supply and Demand, suspended plans
electricity consumption came from
Coal-fired power, which is a base-
for new coal–fired capacity not already
industries, 26% from commercial
load source, is the dominant fossil
under construction and is retiring all
and service enterprises, 13% from the
fuel used to generate electricity, and
plants older than 30 years. Also, the
residential sector, and 7% from other
natural gas–fired capacity is the second
government plans to increase the coal
sectors such as transportation and
largest source. Oil products generate
import consumption tax in 2018.
agriculture, according to KEEI.
very small amounts of power. Nuclear power, also a base-load source, will
Even though South Korea intends to reduce its reliance on coal for power in the longer term, coal is likely to continue playing a large role in South Korea’s energy demand over the next few years. Several coal–fired facilities are already under construction and will come online by 2024, and coal
The government intends to cut its greenhouse gas emissions and reduce fine dust particle pollution
continues to remain more economical
increase capacity in the short term from plants that are already under construction. However, by 2030, the government intends to reduce the country’s reliance on coal and nuclear power generation in favour of renewable energy and natural gas. The country’s new power plan calls for shares of coal and nuclear to decrease
than natural gas and renewable energy,
In the 8th Basic Plan for Electricity Supply
to 36% and 24%, respectively. These
despite the current coal tax.
and Demand, published in 2017, the
shares are slated to be offset by
South Korean government lowered
renewable energy sources rising to a
Electricity
its anticipated electricity demand
20% share and natural gas staying at a
Fossil fuel sources account for
growth to 1% annually through 2030.
19% share in 2030.
nearly two–thirds of South Korea’s
The government intends to cut its
electricity generation, while the share
greenhouse gas emissions and reduce
Generation structure
of nuclear power accounts for almost
fine dust particle pollution through energy
Most of South Korea’s installed
one–third. Renewable energy is set to
conservation measures and through the
generation capacity is fossil fuel-
grow based on government incentives
use of cleaner energy from natural gas,
based, although nuclear power plays
and power plan targets.
nuclear, and renewable energy sources.
a significant role in the power sector.
Also, GDP is expected to grow at a slower
Base-load generation is primarily
South Korea generated more than 553
pace than previously anticipated, leading
made up of coal and nuclear power,
terawatthours (TWh) of gross electricity
to lower power demand.
while peak demand is generally
in 2017, according to KEEI estimates.
met by the natural gas–fired power.
South Korea’s power generation growth
Fossil fuels generated about 65% of
According to KEPCO and KEEI, South
has remained lower than 3% per year
South Korea’s electricity in 2016, while
Korea’s generating capacity at the
since 2012 after averaging about 5% the
30% came from nuclear power, and
end of 2016 was 106 GW, consisting
previous decade.This
more than 5% came from renewable
primarily of natural gas (31%), coal
significant deceleration, especially
sources, including hydroelectricity
(30%), and nuclear generation (22%).
through 2015, is attributed to weaker
(Figure 5).
Oil, hydroelectricity, and other
economic demand and export growth
renewables made up smaller shares
and demand side management
(Figure 5).
measures. After electricity generation growth fell to less than 1% in 2014,
Capacity rose from 98 GW in 2015 as
it began to increase slowly. In 2016
coal, natural gas, renewable energy, and
and 2017, power generation growth
nuclear units were added. South Korea
slightly rebounded to more than 2%
intends to reduce its greenhouse gas
each year as a result of stronger export
emission levels by 26% from business-
growth and some recovery in industrial demand. [54] In 2017, about 54% of
Figure 5. South Korea electricity generation by type, 2016
as-usual projected levels (projections of emission levels absent any carbon
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OVERVIEW: SOUTH KOREA’S ENERGY MARKET
price scheme) and to cut its fine dust
nuclear power stations, which have 25
pollution levels by 62% by 2030. To
individual reactors with a net power
meet these goals, the government
generation capacity of 23 GW. The
is promoting the development of
latest reactor came online in early
renewable energy and natural gas-fired
2016, and the country has added 5.3
plants and phasing out of older, less
GW of capacity at new plants since
efficient coal–fired plants.
2010. Five reactors with 6.7 GW of capacity are under construction and Figure 6. South Korea installed electricity generating capacity by type, 2016
Fossil fuels account for most of the country’s installed capacity, which
scheduled to come online by 2022. Meanwhile, about 7.9 GW of capacity
consisted of 69 GW of coal and natural
economic, and nuclear safety concerns
are scheduled to close by 2030 under
gas power plants in 2016, or about
and is trying to balance its power
the government’s policy not to renew
65% of the total capacity, according to
generation portfolio accordingly.
licenses for older nuclear reactors.
In South Korea plans to retire all coal–
The country’s future slate of fuel for
Although South Korea has historically
fired power plants older than 30 years
power will depend on fuel costs,
relied on nuclear power for a significant
and to suspend any proposed coal-fired
the government’s tax policies and
portion of its generation, public
projects either not under construction
regulations that favour one fuel over
sentiment has turned negative following
and not at least 10% complete, which
another, and the level of investment for
Japan’s Fukushima disaster in 2011 and
is consistent with the country’s goal
clean energy technology.
several incidents of falsified certificates
KEPCO (Figure 6).
to incorporate cleaner sources of fuel
for components of some South Korea’s
into the generation portfolio. By 2022,
Nuclear generation accounts for nearly
about 5.6 GW of coal–fired capacity will
one–third of South Korea’s electricity
be slated for closure.
generation and about 22% of installed
A renewable portfolio standard for
generating capacity. As of early 2018,
South Korea replaced the previous
These closures are expected to be
South Korea ranked sixth–highest for
feed–in tariff system in 2012 and
offset by about 7.3 GW of new coal
nuclear generation capacity in the world
requires South Korea’s major electric
capacity already under construction and
and was surpassed by China in 2016.
utilities to gradually increase the
coming online in the same timeframe.
existing nuclear power plants in 2012.
renewable energy share in their power The country’s first nuclear power plant
generation portfolios to an average of
The government intends for natural
was completed almost four decades
10% by 2024.
gas–fired power plants to replace
ago, and since then, South Korea has
coal–fired facilities after they are retired
directed significant resources toward
Renewable sources (primarily solar,
and the coal–fired power projects that
developing its nuclear power industry.
wind, biomass, and waste) remain a
have been shelved as a result of the
South Korea imports all of the uranium
small share of South Korea’s electricity
latest electricity plan. So far, about 4
needed to fuel its nuclear power plants
generation (6% in 2016), although
GW of these conversions have been
and does not reprocess or enrich
robust growth in generation from
announced and are scheduled to be
uranium as a result of a 30-year nuclear
renewable sources has occurred.
online by 2025.
cooperation agreement with the United States. The countries extended this
South Korea’s latest power plan targets
Currently, natural gas competes with
agreement for 20 years in June 2015,
the share of power generation from
less–expensive coal and nuclear sources
although the new terms did not lift
renewable energy to rise to 20% by
of power, and prices for much of the
the restrictions on South Korea for
2030, mostly by developing wind and
natural gas sold within the country,
producing its own nuclear fuel.
solar capacity.
particularly by KOGAS, is higher than international spot LNG prices. South
Korea Hydro & Nuclear Power Company
SOURCES:
Korea is weighing environmental,
currently operates South Korea’s four
WWW.EIA.GOV - WWW.IEA.ORG
16 | POWER INSIDER VOLUME 10 ISSUE 1
Engie
State-ofthe-Art Gas Engine Technology Leaves Room for CustomerSpecific Innovation
Since late 2016, the new MWM TCG 3016 from Mannheim has been running in the cogeneration power plant at the swimming pool, providing power and heat energy.
Photo Copyright: Caterpillar Energy Solutions GmbH/Germany
18 | POWER INSIDER VOLUME 10 ISSUE 1
Holger Herzberg, responsible Project Manager at Vereinigte Stadtwerke Bad Oldesloe/Germany: “The gas engine is extremely robust, which translates to longer service life.
Though you can’t see it from the outside, the indoor swimming pool in the picturesque town of Bad Oldesloe in SchleswigHolstein is supplied by cutting-edge energy technology. The plant is operated by Vereinigte
says Holger Herzberg, responsible for
TCG 3016 – also comes directly from
Stadtwerke, a municipal operator
heat at Vereinigte Stadtwerke. He is
Caterpillar Energy Solutions and fully
that runs a total of five district heat
pleased to be one of two operators who
controls the generator switch as well
networks in the Stormarn/Herzogtum
have been given the opportunity to
as the dry coolers, pumps, and other
Lauenburg region. Originally designed
thoroughly test the brand-new genset.
auxiliary drives. With the engine and
to supply the swimming pool with
According to Herzberg, the new genset
control software originating from one
heat, the state-of-the-art cogeneration
boasts a number of improvements over
source, the communication for the
technology now benefits a close-
its predecessors.
integrated power plant control with all
by youth hostel, a hospital, various
its components works even better. “Our
customers via the heat network.
The latest MWM TCG 3016 gas genset runs as a fieldtest plant in Bad Oldesloe.
Since late 2016, the new-generation
“The gas engine is extremely robust,
gas engine MWM TCG 3016 of
which translates to longer service
Caterpillar Energy Solutions (CES)
life. Moreover, the new TCG 3016
from Mannheim has been running in
is maintenance-friendly, and the
the cogeneration power plant at the
lubricant consumption has been
swimming pool, providing power and
reduced significantly, making the
heat energy.
genset even more efficient.” The TPEM
“The new TCG 3016 is still something
(Total Plant & Energy Management)
like a ‘mule’ among the gas engines”,
– the new control software for the
schools in the city center, and numerous private and commercial
project presented a challenge for the
The new gas genset MWM TCG 3016 boasts a number of improvements over its predecessors.
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FEATURE: GAS ENGINE TECHNOLOGY
MWM engineers, as the genset had to be installed in an existing cogeneration plant. That is more complicated than
Tailored to Customer Needs
installing an entirely new plant”,
Vereinigte Stadtwerke GmbH
says Herzberg, commenting on the
Contact
Holger Herzberg
planning and construction phase.
State, country
Schleswig-Holstein, Germany
The conversion had to take place
Project manager
Holger Herzberg, Energy Generation department
while the heat supply went on. The conversion phase in late 2016 took
Cogeneration Plant Specifications
about eight weeks from the removal
Go-live
November 2016
of the old genset to the connection
Engine type
MWM TCG 3016 V16
of the new one. The TCG 3016 has
Control TPEM
run smoothly since November 2016.
Electrical output
800 kW
Holger Herzberg has upgraded it with
Thermal output
826 kW
a number of additional features, such
Electrical efficiency 43.4%
as highly efficient, speed-controlled
Thermal efficiency 44.7%
pumps for hot water, engine cooling
Overall efficiency 88.1%
water, and mixed cooling water circuits. Herzberg proudly explains: “In this way, we save about 25,000 kWh of pump energy a year.” MWM plants excel in terms of their adaptability to specific customer needs, by means of which the plants can be made even
New MWM TCG 3016: outstanding efficiency, reliability, flexibility, and environmental compatibility represent the basic pillars of the gas engines in the output range from 400 kWel to 800 kWel
more efficient. This is a key reason why Herzberg appreciates the new TCG 3016. The reduced lubricant
Increased Efficiency
a dynamic market environment in the
consumption of less than 0.1 g/kWh
As a special treat, Herzberg has
age of global value chains. Outstanding
is another positive aspect. “Compared
implemented the inflow of the low-
efficiency, reliability, flexibility, and
to the previous oil change interval
temperature mixed cooling water circuit
environmental compatibility represent
of about 2,000 to 3,000 operating
of the cogeneration plant (47°C) for
the basic pillars of the gas engines in the
hours, the TCG 3016 only needs an oil
the return flow increase in the adjacent
output range from 400 kWel to 800
change once every 5,000 operating
swimming pool. “Normally, this energy
kWel. Their innovative drive is especially
hours, i.e. about once a year.”
is emitted directly to the outside air via
evident from the greatly reduced fuel
the dry coolers. With this modification,
costs, the extremely low lubricant
The generation of heat and especially
we now use the entire heat energy and
consumption, and the digitized power
its effective power production make
thus achieve a higher thermal efficiency
plant control TPEM.
the new engine an extremely efficient
(+5 percent) compared to conventional
product for cogeneration plant
applications.”
operators. The investment has truly
For more information please visit www.mwm.net
paid for Vereinigte Stadtwerke, as
The new MWM TCG 3016 gas gensets
Herzberg has taken care of the entire
are more than merely the next iteration
project engineering and the new
of MWM’s proven gas gensets: The
Source: Caterpillar Energy Solutions
German Combined Heat and Power Act
new gas engines represent an entirely
GmbH, Mannheim/Germany
(KWK) paves the way to attractive state
new development – perfectly tailored
Author: Frank Fuhrmann
incentives. The second TCG 3016 has
to the challenges of Industry 4.0 and
April 24, 2017
already been ordered!
the changed framework conditions of
20 | POWER INSIDER VOLUME 10 ISSUE 1
Ametek Land
W W W. L A N D I N S T . C O M
|
W W W. A M E T E K . C O M
The Role of Fintech in Green Finance Asia
Implementation of the Paris Agreement and achievement of the Sustainable Development Goals (SDGs) will require significant new investment. (World Economic Forum 2013; Global Commission on the Economy and Climate 2014; Organisation for Economic Cooperation and Development 2017; Bhattacharya et al. 2016; Bielenberg et al. 2016).
Indeed, the latter will require additional
The United Nations Conference on
trillion for power and $8.4 trillion for
investment of $2 trillion–$3 trillion
Trade and Development (UNCTAD
transportation, in order to maintain
per year and $1.4 trillion per year in
2014) estimates total global annual
growth, eliminate poverty and address
developing countries, including $343
investment needs as equating to
climate change (ADB 2017).
billion–$360 billion for low-income
$5 trillion–$7 trillion, including $3.3
countries and $900 billion–$944 billion
trillion–$4.5 trillion in developing
Owing to limited public budgets,
for lower-middle-income countries
countries in key SDG sectors
private capital must constitute a large
(Schmidt-Traub 2015; Schmidt-Traub
(comprising infrastructure, food
proportion of this new investment.
and Sachs 2015).
security, climate change mitigation and
The Paris Agreement includes a
adaptation, health and education). The
commitment to “[making] finance
Trillions of dollars in new investment,
OECD (2017) estimates current levels of
flows consistent with a pathway
including incremental investments to
investment as approximately $1 trillion
toward low greenhouse gas emissions
ensure that long-term investments such
per year, i.e., less than a third of the
and climate-resilient development”
as infrastructure are low-carbon and
amount required.
(United Nations Framework
climate-resilient, will be required to meet
Convention on Climate Change
the Paris Agreement’s key objective of
Developing countries in Asia will
(UNFCCC) 2015). Ensuring that capital
ensuring that global average temperature
need to invest an estimated $26
flows to sustainable investment has
increase remains “well below” 2°C and
trillion by 2030 (or $1.7 trillion per
therefore become an important focus
achieves the SDGs.
year) in infrastructure, including $4.7
for policy makers.
22 | POWER INSIDER VOLUME 10 ISSUE 1
The United Nations Environment Program explored the potential for alignment of the financial system to meet sustainability objectives (Zadek and Robins 2018). Innovations in green finance offer the potential to contribute to global goals and reshape the economy in favour of access to services such as energy, poverty reduction and
Innovations in new technologies such as blockchain that have the potential to accelerate the flow of capital to a more sustainable economy technology
economic activity, as well as lowering
The aim of this paper is to survey the potential applications of fintech and blockchain for green finance, with an emphasis on renewable energy as a key element of implementing the Paris Agreement and achieving the SDGs. Moreover, the paper will suggest areas for future policy consideration. Where applicable, it highlights examples from Europe, which has emerged as a leader in blockchain innovation,
aggregate investment and operating
policies that encourage the development
and therefore potentially relevant for
costs and therefore helping to improve
of a more sustainable economy”
developing countries in Asia, especially
our capacity to achieve agreed
(Lindeberg 2014, The Sustainable
in the energy sector.
sustainability outcomes.
Development Goals encompass 17 global goals, including SDG 1 – No Poverty, SDG
Where applicable, the paper highlights
1. Technology innovation and new
2 – Zero Hunger, SDG 7 – Affordable
examples from Europe, which has
financial instruments will be required
and Clean Energy, SDG 8 – Decent
assumed a leadership role in sustainable
to lower costs and raise capital at the
Work and Economic Growth, SDG 9 –
finance and fintech innovation,
appropriate scale and speed. Green
Industry, Innovation and Infrastructure,
including blockchain start-ups.
finance and fintech are relevant to
SDG 10 – Reducing inequalities, SDG
policy makers, particularly in emerging
11 – Sustainable Cities and Communities,
The paper also draws linkages from
and developing countries, as they
SDG 12 – Responsible Production and
these innovations to the People’s
pursue the implementation of the
Consumption, and SDG 13 – Climate
Republic of China (PRC), as a leader in
Paris Agreement and achievement of
Action. p. 1).
both green bonds issuance as well as in
the SDGs.
fintech and blockchain technology. Innovations in new technologies such
Fintech broadly refers to “companies
as blockchain that have the potential
Fintech and Blockchain
or representatives of companies that
to accelerate the flow of capital to a
Fintech in its initial applications involves
combine financial services with modern,
more sustainable economy technology,
“technologies used and applied in the
innovative technologies” (Dorfleitner et
as well as financial instruments such
financial services sector, chiefly used
al. 2016). Green finance can be said to
as green bonds that meet the risk-
by financial institutions themselves
constitute “financial investments flowing
return requirements of investors for
on the back end of their businesses”
into sustainable development projects and
sustainable investments, will help meet
but its applications have enlarged
initiatives, environmental products, and
global policy objectives.
“to represent technologies that are disrupting traditional financial services, including mobile payments, money transfers, loans, fundraising, and asset management” (Marr 2017). Prominent among fintech applications are blockchain or distributed ledger technologies. The concept of a blockchain protocol and its application for bitcoin was first proposed in a white paper published in 2008
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FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
by an unknown person or persons
providing a complete history for
named Satoshi Nakamoto (Nakamoto
every piece of data in the system. Each
2008). Blockchain, which is a type of
transaction on the record is digitally
distributed ledger technology, enables
signed so we know who submitted it
the creation of a distributed database
to the network. Avery asset can also be
that removes the need for trusted
directly transferred in a secure, fast,
intermediaries, such as banks or other
and transparent way.
institutions, to facilitate transactions. A blockchain is “a type of database that
The Blockchain provides
takes records and puts them in a block
unprecedented data security. The
(akin to, say, a sheet in your Excel file).
Blockchain system self-guarantees the
Each block is then ‘chained’ to the
authenticity of all the data within it,
previous block, using a cryptographic
eliminating the need for trust in other
signature. This allows blockchains to
parties. This prevents double spending,
be used like a ledger, which can be
are valid, and anyone in the world can
falsified asset ownership, and other
shared and corroborated by anyone
participate in the consensus process”
forms of data tampering.
with permission” (DiCaprio and Beck
that determines the blocks to be added
2017). Blockchain thereby ensures
to the chain. By dis-intermediating
The Blockchain is highly transparent; a
“the integrity of the data exchanged
institutions that were previously
record of all transactions is permanently
among billions of devices without
required to establish trust, blockchain
available. All users on the system can
going through a trusted third party”
offers the potential of “a world without
see in real time as new transactions are
(Tapscott and Tapscott, 2017; also see
middlemen” (Gupta, 2017).
added to the database.
Public distributed ledgers combine
The Blockchain is also entirely audit-
As Crosby et al. (2015) explain:
economic incentives with cryptography,
able. Every time a new transaction
A blockchain is essentially a distributed
peer-to-peer protocols and data
is added to the record, it is also
Tapscott and Tapscott 2016).
database of records or public ledger
storage to create a transparent,
cryptographically linked to every
of all transactions or digital events
immutable and decentralised record of
previous transaction. Therefore, the
that have been executed and shared
transactions that is visible to all parties
Blockchain ledger cannot be altered
among participating parties. Each
on the blockchain (Gupta and Knight
once it is verified.
transaction in the public ledger is
2017; Meunier 2018). As the Blockchain
verified by consensus of a majority of
Trust Accelerator (2018) explains: The
As a result, blockchain technology has
the participants in the system. And,
innovation of the Blockchain begins
been described as a “trust machine”
once entered, information can never
with the fact that no central entity
because it produces the efficiencies
be erased. The blockchain contains a
owns or controls it. Data is stored
of trust between parties without a
certain and verifiable record of every
across a global network of computers.
central intermediary (The Economist,
single transaction ever made.
When we put an asset of value onto
2015). Blockchain proponents note the
the Blockchain, these transactions are
far-reaching, transformative potential
cryptographically linked in data blocks,
of the technology in financial services
Blockchains can be public (open access) or private (controlled access). Vitalik
and across the global economy, even
Buterin (2015), who created Ethereum,
as blockchain applications remain
a decentralized platform that runs selfexecuting ‘smart contracts,’ describes public blockchains as ones “that anyone
in the world can read, anyone in the world can send transactions to and expect to see them included if they
24 | POWER INSIDER VOLUME 10 ISSUE 1
blockchain offers the potential of “a world without middlemen”.
at an early stage of development. Indeed, Tapscott (2016) describes blockchain as “the biggest innovation
in computer science — the idea of a distributed database where trust is established through mass collaboration
FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
and clever code rather than through
platform for the exchange of value,
a powerful institution that does the
where data is the core underlying
authentication and the settlement.”
element. IoT refers to connecting any
Fintech and sustainable development applications
object or electronic device with a sensor
Fintech – and blockchain in particular –
and that is connected to the Internet,
have important potential implications
while big data refers to the large-scale
for the implementation of a range of
collection, analysis and application of
sustainable development applications,
data, which may generated by the IoT.
owing to the potential impact of fintech
IoT and big data provide a base layer of
on the economy and the fact that
information that can then be managed,
these new technologies will continue
automated and acted upon by either
to develop over the same timeframe
human or automated decision processes.
as the implementation of the Paris
This interrelationship between
Agreement and SDGs.
technologies will enable a future in which these complementary
Fintech and blockchain have already
technologies are integrated.
been related to sustainability
Recent market activity involving bitcoin and other crypto-currencies
applications and use-cases. The United As Outlier Ventures (2016) state:
Nations Environment Programme
has drawn attention to blockchain and
“Blockchains, artificial intelligence,
(UNEP 2016) has identified over two
the related digital ledger technologies
the Internet of Things, autonomous
dozen distinct applications of fintech
that underpin them as having broader
robotics, 3D printing, and virtual and
for sustainable development and in
and deeper long-term societal and
augmented reality are all converging to
varying levels of implementation,
economic implications than the volatile
significantly disrupt existing industries
including four applications in energy
market prices of cryptocurrencies such
and create whole new markets and
described in greater detail below: pay-
as bitcoin. As Johnson (2018) writes:
economic models.” In this future
as-you-go resource utilities; flexible
The true believers behind blockchain
economy, the big data collected by
energy supply and demand, peer-to-
platforms such as Ethereum argue
the IoT are “authenticated, validated
peer renewable energy, and community
that a network of distributed trust
and secured using distributed ledgers,
distributed generation.
is one of those advances in software
consensus and other decentralised
architecture that will prove, in the long
technologies” (Outlier Ventures 2018).
Chapron (2017) has compared
run, to have historic significance. That
As IoT, big data and blockchain continue
blockchain technology “to the
promise has helped fuel the huge jump
to evolve, their gradual convergence
invention of double-entry book-
in cryptocurrency valuations. But in a
will create new possibilities for the
keeping...which enabled the modern
way, the Bitcoin bubble may ultimately
fulfilment of sustainability goals
economy” and has highlighted Citations
turn out to be a distraction from the
where these digital technologies are
from The New York Times, Wall Street
true significance of the blockchain. The
developed with such objectives in mind.
Journal, and the Financial Times.
This interrelationship between technologies will enable a future in which these complementary technologies are integrated.
The potential for blockchain
real promise of these new technologies, many of their evangelists believe, lies not in displacing our currencies but in replacing much of what we now think of as the internet, while at the same time returning the online world to a more decentralised and egalitarian system. Technologies such as the Internet of Things (IoT) and big data can be deemed as complementing blockchain as a
applications that blend cryptography and sustainability. Gupta and Knight (2017) have highlighted innovations in mobile money services such as M-Pesa as an example of how developing countries can leap ahead: “[Imagine] what
full-scale transformation build on
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FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
blockchain might do. It could create
scale over the next five years, they
hyper-efficient government with
could deliver a transformation in
provably trustworthy infrastructure;
global supply chain management.”
new markets and opportunities for citizens to access the formal
Indeed: Blockchain solutions
economy on equal terms; efficiencies
constitute the rare innovation that
of operations that lower prices and
could provide both profits and social
improve the quality of goods for all
purpose. Regulators, social enterprises,
consumers; and a kickstart to high-
and civil society organisations are
tech innovation around the world.”
poised to harness the transparency and accountability available through
The World Bank (2017) has catalogued
Maersk, the world’s largest shipping
blockchain-based tools to help solve
a wide range of blockchain applications
company, based in Denmark, and IBM,
supply chain problems including
in the financial sector, including money
announced plans to form a joint venture
dangerous labor conditions and
and payments, financial services
“to provide more efficient and secure
environmentally destructive practices.
infrastructure, agriculture, governance,
methods for conducting global trade
(Golden and Price 2018)
healthcare records, and humanitarian
using blockchain technology” with the
and aid applications, such as tracking
aim of reducing costs and inefficiencies
Blakstad and Allen (2018, passim),
and delivery of aid.
(White 2018).
from the fintech start-up Hiveonline based in Denmark, have highlighted
Examples of potential use-cases that are relevant to sustainable development include supply chain transparency, identity and financial inclusion, and property rights, as described below.
Supply Chain Transparency A major set of use-cases with implications for sustainable development involves supply chain transparency. Blockchain’s application in tracking assets is expanding into natural
Blockchain-based supply chain solutions reach scale over the next five years, they could deliver a transformation in global supply chain management
the potential of fintech solutions across a number of intervention areas tied to sustainability, as well as diverse ways in which blockchain can improve supply chain integrity, including: the traceability of transactions, allowing consumers to “be confident where
their money is going”; provenance across the lifecycle of an asset or commodity such as location of origin; disintermediation using self-executing contracts that “can be encoded so
that the need for administration and
resources and offers the potential to
central intermediaries is significantly
transform the ways in which natural
Golden and Price (2018) have
resources are recorded and traced
noted the number of pilot projects
reduced or removed, taking much of
across several sub-sectors, including
that have been launched by major
the challenge and cost out of running
forestry and fisheries to carbon
supply chain companies – including
circular economies”; and transparency
accounting and energy. DeCaprio and
agriculture traceability tied farmers’
in “removing the need for third party
Beck (2017) have cited the example of
digital identity, shipping and logistics
auditing” and facilitating identification
a pilot blockchain project to establish a
software to reduce inefficiencies in
of value through a supply chain.
sustainable supply chain in Indonesia
container shipping, mapping to create
to track the provenance of skipjack
transparency in supply chains for
and yellow fin tuna caught by local
consumer goods to improve ethical
Digital Identity and Financial Inclusion
fishermen, which enables compliance
sourcing, and efforts to build solutions
For many people in developing
at origin and could replace the current
for the sustainability of seafood supply
countries, participation in the financial
system of hard-to-verify paper records,
chains – and predict that if “blockchain-
economy (including capital formation
which are subject to corruption. In 2018,
based supply chain solutions reach
through savings, opening a bank account
26 | POWER INSIDER VOLUME 10 ISSUE 1
FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
or borrowing money from a financial institution, or financial leverage to support investment and growth) remains impossible due to a lack of sufficient identity and credit history, which are elements of identity that are often taken for granted in developed economies. Economic identity can be defined as “the marriage of identity and
commerce, resulting in a global, vetted, and manageable asset. This identity consists of the digital or electronic credentials that define a person’s history of economic interactions in the world economy” (BanQu 2018). As the United States Agency for International Development (USAID 2017) has observed:
There may be no single factor that affects a person’s ability to share in the gains of global development as much as having an official identity. Identity unlocks formal services as diverse as voting, financial account ownership, loan applications, business registration, land titling, social protection payments, and school enrolment. A functioning digital economy hinges on the critical infrastructure of digital identity. Emerging trends in digital identity have the potential to offer more inclusive biometrics, leveraging digital footprints to identify those who lack official ID, and potentially providing individuals with more convenient, secure, and portable identification options. cash transfers where the potential
and blockchain for economic identity
Examples of relevant blockchain-
for fraudulent claims is reduced or
and financial inclusion are property
based use-cases include economic
eliminated, and land titling, described in
rights and land titles. In nearly every
identification, in which identification is
further detail below (USAID 2017).
country, the way in which people know
“built up over time through a series
that they own property is dependent
of transactions stored on a blockchain
Property Rights
on a well-established and often
and verified by others,” humanitarian
Closely tied to the application of fintech
complex set of documents certifying
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FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
that the title holder has a legal claim on
however, address problems related
high impact and uncertainty,” with
the property. In some countries, title
to the reliability of records. ... This
IoT blockchain scoring highest in terms
insurance is required in the event of a
suggests that using the technology
of impact and uncertainty among
dispute between the parties about the
to store land records works best in
issues facing the energy sector. In the
validity of the transfer of the property.
places where the existing system for
energy sector, blockchain’s potential
recording land titles is already strong.
implications include dis-intermediation
A wide range of countries, including
of utility business models of centralised generation and grid distribution, with
blockchain platform, thus simplifying
Blockchain Technology for Renewable Energy and Distributed Electricity Systems
the process of transferring title and
In addition to the potential applications
Blockchain is in an early stage of
rendering future disputes less likely.
of fintech and blockchain for SDGs,
the innovation process ... [but] is
blockchain and related technologies have
expected to lead to much more direct
Sweden, where land records are
important early use-cases in the energy
relationships between energy producers
already recorded in digital form, may
sector, including peer-to-peer energy
and consumers, and to strengthen the
represent the country that is furthest
trading, climate finance and carbon
market participation opportunities for
ahead in this pilot testing process. A
credit trading. Applications have drawn
small energy providers and prosumers.
recent report on the second phase
attention from the financial sector,
In a decentralised energy system,
of Sweden’s test for the feasibility of
where the potential for blockchain to
blockchain could enable energy
putting property titles on a blockchain
improve the efficiency of settlement
supply contracts to be made directly
highlighted the significance of this
and other intermediary functions has
between energy producers and energy
application for developed as well as
represented a key attraction.
consumers, and for them to be carried
Estonia, Georgia, Ghana, Honduras and Rwanda, have started to test the potential of putting land titles on a
developing economies:
significant implications for distributed energy systems and decentralised grids:
out automatically (World Energy Council 2017).
For countries without a trustworthy real estate ownership record and land
Europe has been pioneering innovation
registry, a similar project may be the
and financing for blockchain firms
easiest, most cost efficient and fastest
involved in energy and the clean
way to increase GDP in the medium
technology sector. According to data
term. It will serve as a foundation for
from the Cleantech Group, which
better investments in land, enable the
tracks firms spanning energy, logistics
development of a mortgage market and
and supply chains, blockchain and
a credit market in general, and become
IoT, mobility, agriculture and other
an institution for trust in one of the
applications, the number of companies
most fundamental parts of an
or consortia involved in the broader
economy: land and real estate (Kairos
blockchain ecosystem has grown over
Future 2017).
the past year from about 35 to over Energy has been the second major
150. European companies had raised
Moreover, as Pisa and Juden (2017, p.
sector where blockchain has attracted
some $723 million as of May 2018,
28) note:
interest due to its potential role in
compared to $251 million in Asia
[Sharing] a land registry across a
disrupting current business models.
and $140 million in North America (Besnainou 2018).
distributed network greatly enhances
According to the World Energy Council
its security by eliminating ‘single
(2017, p. 3), blockchain was identified as
point of failure’ risk and making
“one of the most critical uncertainties”
An analysis of companies and pilot
it more difficult to tamper with
and “is perceived by energy leaders
projects working with blockchain and
records.... A blockchain cannot,
globally to be an issue of both relatively
energy found that over half were based
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FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
in Europe, followed by North America and Asia, and nearly three quarters had been founded in either 2016 or 2017, reflecting their early stage of development (SolarPlaza 2018). Livingston et al. (2018) have described a range of potential applications of blockchain technology to electric power systems, including peer-to-peer and grid transactions, energy financing,
Blockchain will be able to provide many rapid, lowcost transactions in an electricity market with a growing share of renewable energy
According to Livingston et al. (2018, pp. 9–10), “[even] if blockchain does not
replace the grid, it could enable more participants to trade electricity. For example, Vattenfall, the largest Nordic utility, is running trials in which it uses a private blockchain network to record electricity transactions in which department stores or even individual homes can sell electricity generated by distributed batteries or solar panels;
sustainability, attribution, electrical vehicles, as well as other applications
As of 2017, over 90 companies and
previously, such transactions would
such as smart appliances. Examples of
pilot projects were working with
have been prohibitively expensive or
applications for renewable energy and
blockchain and energy, including
time-consuming to process.”
distributed energy systems described
the United States (US) start-up L03
below include peer-to-peer energy
Energy, which has a pilot peer-to-peer
In his design principles for the power
transactions, carbon credits and
energy exchange called the Brooklyn
markets of the future, Liebriech (2017)
climate finance.
Microgrid; PowerLedger, an Australian
views blockchain technology applied
blockchain-based trading platform
to payments for transmission and
Peer-to-peer Energy Transactions
that enables the decentralised selling
distribution as well as the attribution
A prominent set of use-cases of
and buying of renewable energy; and
of carbon content of imported power
blockchain technology for sustainability
Energy Web Foundation, a consortium
as being part of a broader “digital
applications involves peer-to-peer
of major global energy and blockchain
convergence of energy, infrastructure
energy exchange, including from
companies aiming to develop an energy
and services.”
distributed energy systems using
sector blockchain (Solarplaza2018).
renewable energy (Tapscott 2018).
In Norway, the state-owned energy
In Europe, over 40 energy-trading firms
As PwC (2017) explains: “so called
company Statkraft has demonstrated
have joined forces under the project
‘prosumers’ not only consume energy
the feasibility of energy exchange on a
name Enerchain, a blockchain project
but also dispose of generation in the
blockchain platform and has predicted
to conduct peer-to-peer trading in the
form of solar systems, small-scale wind
that within five years “blockchain will
wholesale energy market: The main
turbines or CHP plants; moreover,
be able to provide many rapid, low-cost
goal of Energy is to deploy a technical
blockchain technology could enable
transactions in an electricity market
infrastructure allowing participants in
them to sell the energy they generate
with a growing share of renewable
the energy wholesale markets to trade
directly to neighbors.”
energy” (Statkraft 2018).
power and gas in a decentralised way, thus avoiding intermediaries and central
As a result, “[b]lockchain based energy
market platforms. ... Operating costs
processes would no longer require
for a decentralised system are different
energy companies, traders or banks
from operating a ‘classical’ central
(for payments). Instead, a decentralised
platform, i.e., dramatically reduced
energy-transaction and supply system
(Merz 2018).
would emerge, under which blockchainbased smart contract applications
Enerchain is at the proof of concept
empower consumers to manage their
stage and is designed to determine
own electricity supply contracts and
whether a decentralized blockchain-
consumption data” (PwC 2018).
based model can support the trading volumes and transaction speeds
30 | POWER INSIDER VOLUME 10 ISSUE 1
FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
required for trade execution in the
reliable and scalable, blockchain
gas and electricity markets (World
technology may ultimately accelerate
Marke (2018) has explored the ways
Energy Council 2017). Other early-
the transition to what the energy
in which blockchain may increase
stage initiatives include Alliander in
industry calls a “distributed world”
the efficiency of emissions trading
the Netherlands, which is piloting a
made up of both large and smaller
schemes, including by suggesting
blockchain-based energy tool to enable
power-generation systems for homes,
more efficient systems to transfer or
consumers to manage and share their
businesses, and communities.
trade carbon credits and proposing
renewable energy, and Conjoule,
the networking of carbon markets using blockchain technology, as well
in Germany, which is developing
Trade and Exchange of Carbon Credits
blockchain-enabled peer-to-peer
According to the World Bank
energy trading and accelerating
energy markets (World Energy
(2018), current markets for climate
international climate finance transfers.
Council 2017).
assets have created a ‘patchwork’ of
a start-up launched by Innogy
as boosting peer-to-peer renewable
climate actions with different units,
A broad group of over 40 organisations,
The International Energy Agency (IEA)
governance structures, registries and
including the International Emissions
(2018, p. 98) has stated: “Although still
rules, resulting in a system that does
Trading Association (IETA), formerly the
early-stage and small-scale, projects
not encourage economic efficiency,
Carbon Disclosure Project (CDP), the
of this kind suggest that decentralised
scale or complexity. At the same time,
Energy Web Foundation, and Power
energy, flexibility from transitive
the rapidly developing technological
Ledger, recently launched the Climate
energy and blockchain could develop
landscape is creating new opportunities
Chain Coalition (CCC) “to cooperatively
together to positive effect.”
for the harmonisation of climate assets
support the application of distributed
among different systems, instruments
ledger technology (‘DLT’, including
Alliander in the Netherlands, which is piloting a blockchain-based energy tool to enable consumers to manage and share their renewable energy
and assets. According to a recent
‘the blockchain’) and related digital
World Bank study, “Blockchain, Big
solutions to addressing climate change”
Data, the Internet of Things (IoT),
(Climate Chain Coalition 2018). The
smart contracts and other disruptive
UNFCCC has expressed support for
technologies hold out the promise
the CCC initiative and “the potential of
of addressing the needs of new
blockchain technology to contribute
generation climate markets post-2020”
to enhanced climate action and
(World Bank 2018).
sustainability” (UN Climate Change News 2018).
For different physical commodities, a digital asset can be created to represent
Blockchain offers significant promise
and provide title to the commodity
for creating new flows of finance for
asset, as well as multiple outputs (e.g.,
climate investments. As Thomason et
Indeed, these use-cases remain at
energy content) and outcomes (e.g.,
al. (2018) note, “blockchain enables
an early stage, and the technologies
greenhouse gas emissions, energy
new forms of finance to address global
and regulatory frameworks for these
access enhancement and poverty
climate finance problems, including
approaches must develop further for
reduction impact) associated with its
crowdfunding and dynamic funding
these use-cases to reach their potential
production and/or lifecycle. Blockchain
mechanisms from private finance
scale or disruptive impact (Medium
technology can provide a digital
markets.” More broadly, Marke and
2018; Metlelitsa 2018). Similarly, as
mechanism for recording and tracking
Silvester (2018,) state:
Basden and Cottrell (2017) argue:
these separate streams of information
Climate finance and green investment
To be sure, as with any new
associated with units. This delineation
provide the best ground on which
technology, blockchain remains largely
and tracking of separate value elements
to apply Blockchain as a ‘fintech’ to
unproven, and significant barriers
in the unit is the central idea behind this
combine technology and finance. ...
remain. ... Nevertheless, if it proves
new architecture (World Bank 2018).
As a loop, the energy sector provides
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FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
valuable production data very useful for the research and development of financial products, whereas new financial products benefit the energy sector reciprocally. Among the fintechs including big data, cloud computing, machine learning, distributed computing technology, Blockchain is the most impactful and revolutionary to the bottom- level (green) finance architecture, especially in lowering regulatory costs and expanding regulatory boundaries. a sustainable economy (McCormick et
high-level of creditworthiness. This can
Financial Innovation and Green Bonds
al. 2015). Nordic countries have also
be achieved by using several levels of
pioneered the use of green bonds to
credit enhancements, which would be
Financial instruments with the ability
mobilize capital for sustainability goals.
cost-prohibitive if applied to individual
to mobilise public and private capital
projects. These enhancements include
Subnational Pooled Financing Mechanisms
reserve accounts, cash flow over-
investment are therefore key to success. One of the most dynamic
One of the key financial innovations
financial transfers and intercepts, partial
instruments in the area of sustainable
at the institutional level for green
credit guarantees, first loss-facilities and
finance comprises green bonds, which
finance has been the use of a structure
subsidies (IISD 2018).
are fixed-income instruments whose
known as subnational pooled financing
proceeds are used by the issuer for
mechanisms (SPFMs) as means of
According to the Global Fund for Cities
environmental projects. Over the past
raising sustainability-oriented capital
Development (FMDV) or Fonds Mondial
decade, investor demand for these
from financial markets. An SPFM
pour le Développement des Villes),
instruments has been growing in
aggregates the financial needs of
SPFMs “have been successfully used
response to shifts in policy and capital
members into a pooled financing
since 1898 in securing finance for both
allocation due to growing concerns
agency (PFA), which then issues debt
large and small local projects, securing
about climate change and sustainability.
and distributes the proceeds from
over $1 trillion in finance in the US
Moody’s (2018) projects that the global
the bond offering to its members. As
and Europe, and over $2.6 billion in
issuance of green bonds will grow to
International Institute for Sustainable
developing countries” (FMDV 2017).
between $175 billion and $200 billion
Development (IISD) (2018) explains:
toward low-carbon, climate-resilient
collateralization, intergovernmental
In Europe, Nordic countries in particular
in 2018, up from $155 billion of green Most SPFMs require the set-up of a
have applied the SPFM model to meet
Special Purpose Vehicle (SPV) that
subnational financing needs. Examples
In Europe, Nordic countries have pioneered
have transparent governance structure
of Nordic PFAs include Kommuninvest
the use of green bonds to mobilise
and processes. These SPVs, whose
(Sweden), an organisation jointly owned
capital for investment in sustainable
structure depends on national laws,
by local government authorities and
infrastructure and related sectors.
are responsible for contracting debt
that acts as an aggregator and conduit
and making debt service payments on
issuer to Swedish local governments
Beginning in the 1970s, Sweden,
this debt. They are usually owned by
and uses proceeds from its green
Norway, Denmark and Finland
governments, though owners can also
bond capital-raising for lending to
have demonstrated leadership in
include the private sector, development
Swedish municipalities in the form
environmental policy, regulation and
partners, NGOs, etc. SPFMs must be
of green loans, which members
changes in behaviour consistent with
structured in such a way as to have a
then use to invest in environmental
bonds issued in 2017.
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FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
projects; Kommunalbanken, Norway’s
concern among investors. Continued
establishing a green financial system,
largest lender to local governments,
momentum in the growth of the green
including “financial instruments such
which has an active green bond and
bonds market and more broadly in
as green credit, green bonds, green
green loan program; KommuneKredit
the expansion of green finance will be
stock indices and related products,
(Denmark), which serves as a municipal
contingent on transparency in the use
green development funds, green
credit aggregation agency and is
of proceeds (Santibanez et al. 2015;
insurance, and carbon finance, as
similar in function to Kommuninvest
Kyriakou 2017; Linsell 2017). In order
well as relevant policy incentives to
and Kommunalbanken; and MuniFin
to raise capital for the implementation
support the green transformation
(Finland), which is the main financial
of the Paris Agreement and the SDGs,
of the economy” (People’s Bank of
services provider to Finland’s local
developing countries in Asia and other
China 2016).
governments and offers a discount
regions may expand the use of green
margin to its borrowers to provide an
bonds, adopt financing models such
The PRC’s growth in activity in the
incentive to propose projects depending
as SPFMs, and further develop and
green bonds market has propelled the
on how ‘green’ the project is in terms of
implement innovative fintech and
country into a leadership position, and
its environmental sustainability (Climate
blockchain approaches to enhance and
green bond issuance from this country
Bonds Initiative 2018).
promote the growth and transparency
represents one of the largest sources
of their growing green bonds markets.
of issuance in the global green bond market (Climate Bonds Initiative 2017).
In addition, an important blockchain use-case has begun to take shape in
Adoption of innovative approaches,
monitoring green bonds proceeds in the
such as the Green Asset Wallet initiative
form of the Green Asset Wallet initiative
described above, could provide
(Repinski 2017).
additional means to boost investor confidence in the underlying quality of
The project, led by Stockholm Green
green financial instruments.
Digital Finance and backed by Norway’s Centre for International Climate
Implications for Asia
Research (CICERO), applies the concept
Major developing countries in Asia
of sustainability attribution to green
have recently begun to adopt and
financial investments. As CICERO
extend innovative approaches to
(2018) explains: The project ... is
promote green finance. The People’s
designed to equip green investors with
Republic of China (PRC) has identified
the technology to better deliver on the
the establishment of a green financial
goals of the Paris Climate Agreement
system as a goal in its Thirteenth Five-
and the SDGs. ... The wallet is based on
Year Plan (Central Committee of the
open-source technology tailored for
Communist Party of China (CPC) 2016)
capital market actors.
and has taken the lead in creating new institutional frameworks and incentives
Green Fintech in the People’s Republic of China
The technology will offer a platform for
for green finance and green bonds.
In the PRC, the ANT Financial Services
validation of, as well as impact reporting
The Guidelines for Establishing the
Group, formerly known as Alipay and
on, green investments. The Green Assets
Green Financial System, released in
a leading fintech company, launched
Wallet will help to effectively channel
2016 by the People’s Bank of China
a large-scale pilot to engage with
private institutional capital to green
(PBOC), the Ministries of Finance
consumers in shaping their behaviour
projects globally, specifically supporting
and Environmental Protection, the
in ways aligned with green finance at
green emerging markets investments.
National Development and Reform
scale. Chen et al. (2017) have explained
Commission (NDRC), and the banking,
the design of the pilot and have
In spite of the rapid growth in the green
insurance, and securities commissions,
highlighted its immediate impact and
bond market, transparency remains a
all emphasise the importance of
long-term potential:
34 | POWER INSIDER VOLUME 10 ISSUE 1
FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
The ‘Ant Forest’ encourages Ant’s
As a recent study on the future of
example to the rest of the world of how
users to reduce their carbon footprint
blockchain technology in the Asia and
the blockchain revolution will unfold
through a three-part approach: (a)
the Pacific region has noted: “Asia could
(Cognizant 2017).
providing individualised carbon
become a dynamic testing ground for
savings data to peoples’ smartphone,
the new business models promised
According to recent statistics, the PRC
(b) connecting their virtual identity
by blockchain, as the region has high
was the most active filer of patent
and status to their earnings of
demand for financial inclusion and the
applications related to blockchain
‘green energy’ for reduced carbon
need for more efficient, convenient
technology, with 56% (226) of the 406
missions, and (c) providing carbon
and affordable products and services”
blockchain related patent applications
offset rewards through a physical tree
(Cognizant 2017).
filed in 2017 (Desouza et al. 2018;
planting program.
Noonan 2018; Thomson Reuters 2018).
The PRC was the most active filer of patent applications related to blockchain technology
products owing to policy uncertainty.
2016 to January 2017, 200 million
For the Asia-Pacific region, blockchain
toward cryptocurrency is very explicit,
people across the PRC have voluntarily
represents the most significant
as it banned initial coin offerings
joined the program, about 44% of Ant’s
technological opportunity of the next
(ICOs) in September 2017 and
user base in the PRC, or about 20% of
decade, and is likely to be a wellspring
later prohibited all cryptocurrency
the PRC’s adult population or 3% of the
of innovative ideas for leaders across
exchanges from operating in the PRC.
world’s total population. Behavioural
the globe. Thoughtful observers of
Yet the regulation on blockchain, the
change over the period has resulted
the blockchain phenomenon already
technology behind cryptocurrencies,
in an estimated 150,000 tons of
recognise that they cannot ignore
remains unclear. Business operators
cumulative avoided carbon emissions
the cost efficiency and business
must be cautious, given the difficulty
and over 1 million trees planted by
effectiveness promises of distributed
of determining if blockchain
January 2017. ... The Ant Forest pilot
ledger technology.
products are fully compliant with
with other digital financial companies
Blockchain offers a once-in-a-lifetime
cryptocurrencies are involved. ...
to encourage billions of people to
opportunity for firms and leaders in
Sorting out the regulatory uncertainty
reduce their carbon footprint.
the Asia-Pacific region to provide an
with blockchain is key to the future
The Ant Forest pilot has far exceeded expectations in attracting large numbers of users in a short period of time, and elicited significant behavioural change.
As Desouza et al. (2018) argue:
Despite a spate of enthusiasm for blockchain business, many companies are keeping low profiles for their involvements in blockchain-related The central government’s policy
Over the first six months from August
government rules, even when no
could be extended in collaboration
innovation trajectory.
Conclusions and Preliminary Recommendations The future development and adoption of blockchain, IoT, big data and other related technologies offers the promise of systemic transformation: a radically different financial and capital allocation system geared toward inclusive and sustainable development. These new technologies are at an early stage of
FOLLOW US ON TWITTER: @PIMAGAZINEASIA WWW.PIMAGAZINE-ASIA.COM | 35
FEATURE: ROLE OF FINTECH IN GREEN FINANCE ASIA
development and their future trajectories are difficult to predict with confidence. However, the net effect of applications of fintech and blockchain technology to the wide range of potential use-cases above will be to substantially improve reliability (such as identity and financial inclusion), increase access to services (such as energy, banking and property ownership) and importantly, lower overall system costs. The aggregate impact of lower costs in each individual organisation or service-provider, and given sufficient competition and market
Fintech and blockchain sector will create new opportunities for countries that wish to reach the next stage of development in terms of financial, economic and technological performance
Policy makers can draw inspiration from a wide range of current and ongoing initiatives led by committed, dynamic fintech entrepreneurs who are focused on developing and implementing their particular technologies with a view to an application or set of applications that often have material direct or indirect bearing on our ability to fulfill the SDGs and the Paris Agreement. However, it is often the case that the deeper opportunity set rather than the agreements themselves are at the forefront of people’s thinking and business models.
dynamics, may have the positive effect of lowering the costs of achieving the
financial and machine processes” and
Finally, policy makers should engage
goals connected to these services.
in “specific, well-defined, and complex
more closely with the fintech and
applications” such as in interaction with
blockchain sector, in part because it
self-driving cars or drones.
is developing quickly, in parallel with
Of course, there will be growing pains, particularly as the system takes shape. According to Tapscott (2016), “[the
and to some extent separately from the ‘real’ economy. For policy makers
biggest problems...have to do with
Preliminary Recommendations for Policy Makers
governance. Any controversy that you
Policy makers responsible for finance
change, engagement with the fintech
read about today is going to revolve
for climate change and sustainable
and blockchain sector will create new
around these governance issues. This
development should pay attention
opportunities for countries that wish to
who can keep up with the pace of
new community is in its infancy. Unlike
to developments in fintech and
reach the next stage of development
the Internet, which has a sophisticated
blockchain. The sector is rapidly
in terms of financial, economic and
governance ecosystem, the whole world
evolving with a proliferation of different
technological performance in a global
of blockchain and digital currencies is
initiatives that have either direct or
economy that is increasingly dependent
the Wild West.” The significant energy
indirect relevance to green finance
on complex, decentralised networks.
use of blockchain consensus algorithms
and sustainable development. Many
Recognition of this potential will
relying on proof-of-work, as compared
initiatives are at an early stage and,
create opportunities for approaches
to the more efficient proof-of-stake
if supported by appropriate policy
that provide significant long-term
approach, will also need to be resolved.
and regulation, have the potential to
advantages in strengthening green
develop into business models that can
finance for low-carbon, climate-
However, even critics such as Roubini
both reduce the cost and improve the
resilient investment and achieving the
and Byrne (2018) who labeled
prospects of achieving the objectives
sustainable development goals.
blockchain “one of the most overhyped
of the Paris Agreement and the SDGs,
technologies ever” due to its inefficiency
particularly with respect to the areas
Nassiry, D. 2018. The Role of Fintech
compared to existing databases
described in this paper, including
in Unlocking Green Finance: Policy
and its superior demand for storage
supply chain transparency, identity
Insights for Developing Countries.
space and computing power, among
and financial inclusion, property
ADBI Working Paper 883. Tokyo: Asian
other limitations, have conceded that
rights, expansion of renewable energy,
Development Bank Institute. Available:
blockchain could have “potentially
decentralisation of electrical power
https://www.adb.org/publications/
far-reaching implications” if combined
systems, carbon credit trading and
role-fintech-unlocking-green-finance
with “secure, remote automation of
improved access to climate finance.
Email: dnassiry@gmail.com
36 | POWER INSIDER VOLUME 10 ISSUE 1
Karpowership
www.karpowership.com
power for asia
China Backs Fuel Cell Technology Stung by the impact of the financial crisis, the hilly city of Yunfu in China’s southern Guangdong province decided in 2009 it was time for a makeover.
Known over hundreds of years for
Attracted by generous government
“When we moved here it was all
producing delicate stones for arts
subsidies, a whole suite of companies
barren hills,” says Frank Ma, chairman
and crafts, the city had few modern
covering the supply chain have now set up
of Guangdong Nation Synergy
industries apart from consumer
in the park, which is producing hundreds of
Hydrogen Power Technology, walking
appliances. So officials decided to
buses and small trucks using fuel cells that
along a line of bright blue fuel cell
lop the top off the surrounding hills
run on hydrogen gas. So successful has it
buses. “Your first impression [of
and build a 13.4 sq km industrial
been that local officials now plan to flatten
the area] is that this is not the
park focused on fuel cells — a rival
two more hills to create a neighbouring
kind of place to do this kind of
technology to internal combustion
vehicle manufacturing plant and a
manufacturing. [But] this is a special
engines and electric batteries.
chemicals facility.
kind of industry in China.”
38 | POWER INSIDER VOLUME 10 ISSUE 1
The Yunfu park is the epitome of China’s powerful industrial policy — which is designed to use generous subsidies to develop and dominate emerging industries critical to the
“Made in China 2025” shift to highend manufacturing. Beijing has spent an estimated $58.8bn subsidising its electric car industry over the past decade, according to the US-based Center for Strategic and International Studies,
A hydrogen fuel cell bus in Zhangjiakou, northern Hebei province
creating the world’s largest market for electric cars as well as a dominant
China’s rush into fuel cells could be
village along the Sham Chun river
position in batteries— surpassing Japan
an expensive gamble, however. The
that separates the mainland from
and South Korea. Subsidies have also
vehicles need to be able to compete
Hong Kong into one of its most
helped propel Chinese solar makers
without subsidies just as batteries are
vibrant cities and home to some of its
into the ranks of the world’s largest
becoming ever cheaper, quicker to
largest technology companies. Almost
producers, overtaking competitors in
charge and able to hold more energy
the entire taxi fleet uses electric
the US and Europe.
for the same amount of weight.
cars made by hometown producer
Tesla chief executive Elon Musk has
BYD, the world’s largest electric car
Now Beijing hopes to do the same for
dismissed fuel cells and hydrogen as
manufacturer that is backed by Warren
fuel cells — which along with electric
“mind-bogglingly stupid”.
Buffett’s Berkshire Hathaway. The buses are also all electric.
vehicles could help decarbonise the entire transportation fleet and reduce
The power of China’s subsidy machine
China’s vast reliance on imported oil.
can be seen in the southern city of
Almost half of all battery and plug-in
While fuel cells are unlikely to compete
Shenzhen, which grew from a fishing
hybrid vehicles sold this year will be
with batteries for small passenger cars because of the latter’s continued reduction in costs, they could play a role in larger vehicles such as trucks and buses, as well as in ships and trains.
“If you look at what China did in solar, in wind and in battery electric vehicles the subsidy tap was opened and it brought a lot of capital and companies to these new markets, which resulted in China being the leader in all three of these segments,” says Randy MacEwen, chief executive of Canada’s Ballard Power, one of the world’s largest fuel cell manufacturers. “We expect to see something similar with the fuel cell industry.”
How a typical fuel cell works
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FEATURE: CHINA BACKS FUEL CELL TECHNOLOGY
sold in China. Thanks to government rules that restricted domestic car companies from buying batteries from foreign producers, Chinese battery maker CATL has become the world’s largest producer, overtaking rivals LG Chem and Panasonic. Based in Ningde, in southeastern Fujian province, CATL this year signed deals to sell batteries to BMW and Daimler and announced plans to build a factory in Germany.
China is a market that has proven that with subsidies they will drive production capacity and volume and see significant cost reductions.
initially run on buses using compressed natural gas before the hydrogen infrastructure is built, he says.
“While we talk a lot about these technologies in Europe the Chinese government is actually pushing ahead,” Mr Caldwell says. “They can create the market and create the demand and drive these technologies down the cost curve.”
the US Hybrid Corporation on a Just as it was in batteries five years
hydrogen-powered fuel cell bus to run
Ballard says its joint venture with
ago, China is a laggard in fuel cells,
in Honolulu airport. And in November
Weichai will aim to make at least
behind Japan and South Korea as well
Weichai Power, China’s largest state-
2,000 fuel cells a year for commercial
as the US and Europe. Toyota has
owned diesel engine maker, spent
vehicles by 2021 — the largest planned
consistently bet on the technology
$184m on a 20 per cent stake in Ballard.
deployment to date. The company
and launched its first fuel cell car, the
This month Weichai also paid £48m for
says the total cost for customers to
Mirai, in late 2014, It sells for about
a 20 per cent stake in UK-based fuel
buy and operate a fuel cell bus will
£65,000. Hyundai’s Nexo fuel cell
cell maker Ceres Power.
be the same as for a battery-driven vehicle by 2020.
model goes on sale this year for a similar price.
Phil Caldwell, Ceres chief executive, says the size of the Chinese market
“If you look at the costs we’re
To overcome that laggard status,
was too big for his company to ignore.
[currently] at a premium [compared]
Chinese companies last year began
The company plans to transfer its
to battery electric vehicles,” says Mr
a concerted effort to acquire and
technology to Weichai and jointly invest
MacEwen. “What hasn’t happened yet
integrate foreign technology. In May
in a manufacturing facility in eastern
in the fuel cell market is the power
BYD announced it was working with
Shandong province. The fuel cells will
of volume. China is a market that has
Hyundai’s Nexo fuel cell model goes on sale this year for a similar price
40 | POWER INSIDER VOLUME 10 ISSUE 1
FEATURE: CHINA BACKS FUEL CELL TECHNOLOGY
proven that with subsidies they will drive production capacity and volume and see significant cost reductions.” Benny Oeyen, a former executive for General Motors in Shanghai, stands next to a fuel cell bus made by Feichi Bus in Yunfu and watches the water
Under the current scheme, manufacturers of fuel cell vehicles are guaranteed to make a profit.
come out of the exhaust pipe.
State-owned companies have also started to build hydrogen refuelling stations, with China Energy, the country’s largest power company, building one of the country’s biggest in the city of Rugao in eastern Jiangsu province. The price of hydrogen is also heavily subsidised, often making it cheaper
“I think this is the answer to the
vehicles two years early — around the
energy challenge of mankind,” says
same number of vehicles as California.
Mr Oeyen, now head of market
Industry participants say China could
Fuel cells have a number of advantages
development for platinum group
hit a target of 2m fuel cell vehicles by
for China. They can help reduce the
metals at Anglo American. “It’s no
2030, about 5 per cent of the total
country’s reliance on imported energy
longer pie-in-the-sky PowerPoint
vehicle fleet.
as well as raw materials. While lithium-
presentations.”
than diesel.
ion batteries require a host of metals Under the current scheme,
such as cobalt, lithium and nickel, most
All told, China will have spent about
manufacturers of fuel cell vehicles
fuel cells only require platinum, of
Rmb85bn ($12.4bn) on supporting fuel
are guaranteed to make a profit. They
which there is an abundant supply, as a
cell powered vehicles last year, in a
can receive as much as $30,000
catalyst, at a level of around 0.5 to 0.6
mix of national and local subsidies. The
from the central government per
grammes per kilowatt.
technology received high-level support
vehicle — provided it is driven at least
in October when Wan Gang, a former
20,000km and meets minimum
“In terms of resource adequacy, it’s a
minister of science and technology who
power requirements. They can also
lot easier to see how you do it for fuel
is considered the father of China’s push
receive a local government subsidy
cells than for lithium-ion batteries,”
into electric cars, said “the next era
that varies by region.
says Paul Gait, an analyst at Bernstein.
“If you go to the northern rim of the
belongs to fuel cell technology”. “With the current subsidies the
Bushveld [in South Africa] there’s
While Chinese subsidies for battery
producer of the fuel cell bus is making
enough platinum to electrify the
electric vehicles are expected to be
money from day one,” says Mark Sun,
entire auto fleet.”
phased out by 2020 they will continue
head of marketing in Asia for Anglo
for fuel cells to at least 2025, according
American Platinum, which is looking
China may also have a solution for
to some in the industry.
to boost demand for platinum
being self-sufficient in hydrogen. While
through its use in fuel cells.
most hydrogen is created from fossil
Powered by hydrogen 8,000 - Estimated Chinese national and local subsidies to support fuel cell powered vehicles in 2018
fuels such as methane and used in The subsidies have prompted a
the refining and chemical industries,
host of Chinese companies to start
another method is to produce it using
producing fuel cell vehicles, including
electricity to split water, a process
the country’s largest car manufacturer,
known as electrolysis. This process
SAIC Motor, and its largest electric
is not an efficient use of energy, but
1m - Beijing’s target for fuel cell
bus maker, Yutong Bus. Yu Yi, head of
it makes sense when the cost of
vehicles on the road by 2030. The US
fuel cell research at SAIC, says that
electricity is free.
target for that year is 800,000 (IEA)
when the company reaches a target
The money has helped China reach its annual target of 5,000 fuel cell
of 10,000 fuel cell vehicles the “costs
Beijing’s huge investment in renewable
can be reduced substantially”.
energy over the past decade has caused a lot of electricity to be wasted, since
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FEATURE: CHINA BACKS FUEL CELL TECHNOLOGY
intermittent wind and solar power
“It gets more difficult for fuel cells
Mr Ma in Yunfu is hesitant when asked
cannot be properly integrated into
— it’s not a matter of catch-up,
if he can survive without subsidies.
the grid. China can use some of that
it’s catching up with something
“Subsidy dependence is hard to get
wasted energy to generate hydrogen
that’s moving ahead of you all the
rid of,” he says. Adding that if the whole
cheaply, says Nick Ni, general manager
time,” says Peter Harrop, chairman
experiment fails “the best fuel-cell
of Nantong Angstrom Renewable.
of consultancy IDTechEx. “China is
vehicles are still scrap metal”.
backing all horses just in case.” But he insists that once his company
It is estimated that around 150 gigawatts of renewable energy
Sceptics also warn that China’s push
can produce more than 100,000 fuel
generating capacity is abandoned in
into fuel cells could end up repeating
cells stacks a year, up from the current
China every year because it cannot be
its experience with electric cars, where
2,000, its buses should be competitive
integrated into the grid. That could be
government spending has created
against battery-powered rivals.
used to power 18m passenger cars, says
huge amounts of production without
Ju Wang, deputy secretary-general of
making sure there is real demand. There
the International Hydrogen Fuel Cell
are more than 100 domestic electric
if you can purchase 100,000 vehicles I
Association. “China does not need to
vehicle makers in the Chinese market.
can give you a price 30 per cent lower
“I said to the Guangdong government,
than electric vehicles,” Mr Ma says.
worry about hydrogen supply.”
“Can we identify electric car and fuel
“Our target from the first day was to
Despite this optimism, fuel cells will
cell producers that will survive the
survive beyond government subsidy
face fierce competition from batteries,
inevitable consolidation? At some
and support. Our goal is to keep costs
given the amount of money that is
point there will be a war of attrition,
down and completely commercialise.”
going into that sector. The global
and I’m not clear how they are going
battery market is expected to increase
to go about that,” says Scott Kennedy,
“The government has given a promise
10-fold by mid-century to $500bn,
a senior adviser at CSIS.
to the world that we have to reduce
according to Bernstein Research,
pollution,” he adds.
with costs expected to fall to parity with petrol engines by 2023. That is without any government subsidy. Carmakers from Tesla to Daimler have also launched electric trucks that will compete with fuel cells.
“The government has given a promise to the world that we have to reduce pollution,” he adds. 42 | POWER INSIDER VOLUME 10 ISSUE 1
POWERex Asia 2019
Asia’s Hydrogen Highway Japan’s hydrogen highway system was brought into place because of the 4-year Japan Hydrogen & Fuel Cell Project ( JHFC). Twelve hydrogen fueling stations have been built in 11 cities in Japan. Two hydrogen fuelling stations that
Sagamilhara, Yokohama-Asahi,
were built for Expo 2005 in Seto-
Kawasaki, Yokohama-Tsurumi,
North and Seto-South have been
Yokohama-Daikoku and Kimitsu-shi.
moved to the Chubu International Airport where only one is in operation
The Ome-shi hydrogen station
now. Eight Toyota / Hino FCHV buses
operates by reforming natural gas,
were refuelled at these stations for
hydrogen made by reforming kerosene.
which is readily available. The Ome-
the World Exposition Fair of 2005.
The station built by the Idemitsu
shi station is also a mobile station and
The stations dispensed 1,300 kg of
Kosan Company required extensive
services areas not covered by the fixed
hydrogen gas during the Expo.
desulfurization technology.
hydrogen stations. The Senju station is
One hydrogen fueling station that
The other Japanese cities that
Gas and Nippon Sanso.
had been operational in the city of
currently have operational hydrogen
The Kasumigaseki hydrogen fuelling
Hadano in the Kanagawa Prefecture
fueling stations include Ome-
station is a mobile station located
was the world’s first station to dispense
shi, Senju, Kasumigaseki, Ariake,
near Tokyo. The components of
an LPG reforming station run by Tokyo
44 | POWER INSIDER VOLUME 10 ISSUE 1
this hydrogen refuelling station are
it would oversee the construction
million-$4.7 million), well above 100
brought inside and night and moved
and operation of the new fuelling
million yen for a gasoline station.
outside for use in the morning hours.
stations, nearly doubling the number
The Ariake hydrogen refuelling
at present.
station is equipped to dispense both
The path to adopting hydrogen has been dogged by the difficulty in
gaseous and liquid hydrogen. This is
As countries seek low emissions
driving widespread take-up given
one of only two stations capable of
energy sources to power vehicles,
high costs of fuel-cell vehicles (FCVs),
dispensing liquid hydrogen in Japan.
homes and industry, Japan is betting
limited production capabilities and
heavily on becoming a “hydrogen
low numbers of fuelling stations.
The Sagamilhara hydrogen fuelling
society” despite the high costs and
station was the first of its kind
technical difficulties of a process that
Only a handful of automakers currently
installed at an existing LP gas station.
creates electricity from a chemical
market FCVs, including Toyota, Honda
The station uses alkali diaphragm
reaction of fuel and oxygen.
Motor Co and Hyundai Motor Co.
water electrolysis to generate
Toyota has sold only 5,300 units of
hydrogen gas. The Yokohama-Asahi
its Mirai FCV since its launch in 2015,
hydrogen fuelling station is the first station in Japan to reform high-purity hydrogen from naphtha. The Kawasaki hydrogen fuelling station is the world’s first station to reform methanol in order to attain the hydrogen gas. Methanol reforming is
Japan wants to have 160 hydrogen stations and 40,000 FCVs on the country’s roads by March 2021.
safer than natural gas reforming in that
while it has sold a total of around 11.5 million gasoline hybrids since launching the Prius 20 years ago. Japan wants to have 160 hydrogen stations and 40,000 FCVs on the country’s roads by March 2021. By 2030, it aims to have 900 stations to service some 800,000 FCVs, buses
it can be done at lower temperatures
JXTG Nippon Oil Senior Vice President
with less energy expended.
Yutaka Kuwahara said on Monday
and forklifts.
that a lack of users and high costs to
By then, it expects the price of
The Yokohama-Tsurumi hydrogen
build and operate fuelling stations had
hydrogen to fall to around 30 yen per
fueling station is Japan’s first off-site
slowed construction in Japan, delaying
normal cubic meter, from up to 100
station that refuels fuel cell vehicles
a government target to build 100
yen now.
through a trailer. The Yokohama-
stations by March 2016. Other companies involved in Japan H2
Daikoku hydrogen station uses steam reforming of de-sulfurized gasoline
Japan currently has about 90 stations,
Mobility include Honda, Nissan Motor,
to produce hydrogen. Behind the
with at least 40 operated by JXTG
Idemitsu Kosan, Iwatani Corp, Tokyo
station is a showroom and garage for
Nippon Oil, and another 10 are in the
Gas, Toho Gas, Air Liquide Japan Ltd,
hydrogen fuel cell vehicles.
planning or construction stage.
Toyota Tsusho.
The Kimitsu-shi hydrogen station
“We must lower costs, which will
South Korea aims to install 100
uses coke oven gas (COG) to mass-
remove many of the bottlenecks to
hydrogen filling stations by 2020
produce liquid hydrogen. The
developing more stations,” he told
Nel-Deokyang, a subsidiary of Nel
by-product COG is produced in the
reporters at a briefing.
ASA in South Korea, has received a purchase order for an H2Station
steel-making process and everyday this facility manufactures 0.2 tons of
By about 2020, the Japanese
hydrogen fuelling solution from Joong
high-purity liquid hydrogen.
government aims to roughly halve the
Do Gas, a retail company involved in
Japan H2 Mobility LLC, whose backers
cost of building a hydrogen fuelling
sales of LPG fuel in South Korea.
include Toyota Motor Corp and JXTG
station, which is currently about 400
Nippon Oil & Energy, said on Monday
million yen to 500 million yen ($3.8
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FEATURE: ASIA’S HYDROGEN HIGHWAY
The 2 million euro (US$2.4 million)
Hydrogen fuel breakthrough in
The membrane breakthrough will allow
purchase order marks the first installation
Queensland could fire up massive new
hydrogen to be safely transported
in Korea, and the first compact filling
export market
and used as a mass production energy
station solution to follow a new gas law and local standards.
source. Australian fuel could soon be in high demand for hydrogen-powered cars
“This is the breakthrough we have
across Asia
been working intensively with over the course of the last year. As the first pure H2Station® delivery from Nel, not only in Korea, but in Asia in general, this is a landmark achievement for Nel, as we continue to position ourselves as a truly global hydrogen company,” says Nel CEO Jon André Løkke.
“We are certainly the first to demonstrate the production of very clean hydrogen from ammonia,” Dr
Tipped as the future of green motoring, hydrogen cars are virtually emissions-free and both simple and fast to refuel.
In April, the South Korean government
Dolan said.
“Today is the very first time in the world that hydrogen cars have been fuelled with a fuel derived from ammonia — carbon-free fuel.” Program leader David Harris said Australia has a huge source of renewable energy — sunlight and
established a special purpose company
wind — that can be utilised to
(SPC) which would expand the country’s
It’s the first time hydrogen cars have
hydrogen infrastructure by installing
been powered with a fuel derived
hydrogen filling stations at the most
from ammonia.
produce hydrogen. But the highly flammable element is difficult to ship long distances because
travelled roads and highways in the
of its low density.
capital city Seoul and other major cities.
Both Toyota and Hyundai have
Nel-Deokyang takes part in the SPC
invested millions of dollars into
along with other participants from major
hydrogen-powered cars
CSIRO researchers found a way to
South Korean corporations, state-run
CSIRO principal research scientist
turn Australian-made hydrogen into
utilities and automakers.
Michael Dolan said it was a very
ammonia, meaning it could be shipped
exciting day for a project that has been
safely to the mass market of Asia.
“South Korea is currently one of the
a decade in the making.
fastest movers within the industry,
As of now, there are only five such
with an ambition of having 100
“We started out with what we
cars in Australia, but there are tens of
hydrogen fuelling stations online by
thought was a good idea, it is exciting
thousands across Japan, South Korea
2020. We are very happy to kick-
to see it on the cusp of commercial
and Singapore.
start our deliveries in South Korea
deployment,” he said.
and expect to continue to further
“The key here is we can transport
penetrate the market as we move
What’s the fuss about?
the hydrogen from the place where
forward,” Løkke concludes.
Tipped as the future of green
it is produced from renewable
motoring, hydrogen cars are virtually
energy — let’s say maybe that is in
The H2Station solution will be installed
emissions-free and both simple and
outback WA — and we can ship that
alongside conventional fuels on the
fast to refuel.
form of ammonia anywhere in the world,” Dr Harris said.
existing forecourt of an LPG station, which also marks a first in Korea. The
For the past decade, researchers
station is supported by the Korean
have worked on producing ultra-
Independent industry association
Automotive Environment Association,
high purity hydrogen using a unique
Hydrogen Mobility Australia said
and installation will commence towards
membrane technology.
the technology has the potential to
the end of 2018.
46 | POWER INSIDER VOLUME 10 ISSUE 1
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FEATURE: ASIA’S HYDROGEN HIGHWAY
“From an energy perspective, the ability to move solar energy or wind energy from one place to another using ammonia opens up doors that previously would have been closed because of the difficulties of transporting hydrogen.”
Australia’s next export boom The CSIRO team has already received expressions of interest from Japan, cell electric vehicles (FCEVs) with low-
in three minutes like a normal car and
South Korea and Europe, with industry
emissions hydrogen produced in Australia.
had a range of up to 800 kilometres.
players looking at taking up supplies
“Hydrogen powered vehicles,
“So they are just like driving a normal
including buses, trucks, trains,
car but there will be zero emissions,”
forklifts as well as passenger cars
he said.
initially to fuel commercial vehicles like
are being manufactured by leading
buses, taxis, trucks and trains. Dr Dolan said a million hydrogenpowered cars were expected to hit the
automotive companies and deployed
“Working in and out of South Korea
worldwide as part of their efforts
quite regularly, I know Hyundai has a
to decarbonise the transport sector,”
massive contract to provide hydrogen
Currently hydrogen-fuelled cars sell
she said.
buses to the Korean Government.”
for about $80,000, but, as with
streets by 2025.
electric cars run on power-grid charged
“In parallel, local and state
“It just announced 16,000 hydrogen-
batteries, the price is expected to fall as
governments have also committed
powered cars will go on the road and
production increases.
to build hydrogen refuelling
310 hydrogen refilling stations across
infrastructure with stations set
the country under a five-year plan.”
to come online in the next 12 to18
Mr Nargar said they expected to see price parity with petrol and diesel cars
months,” she said.
“They need to power those cars
Hydrogen-powered cars could be on sale
renewable hydrogen from Australia?”
within a decade.
from somewhere so why can’t it be as good as current gasoline cars, so
in Australia within the next two years.
‘A massive step for Australia’
“But the efficiency of the car is twice
Toyota spokesman Matthew Macleod
you can actually drive twice as far on
said the breakthrough was exciting
a tank,” he said.
because it addressed one of the key Both Toyota and Hyundai have
challenges with hydrogen.
seen as Australia’s next export boom.
invested millions of dollars into hydrogen-powered cars.
Dr Dolan said renewable hydrogen was
“It is a game-changer,” he said.
“It could potentially rival our LNG export industry,” he said.
Today’s road test will be on Hyundai’s
“When it gets to where it is going
flagship eco car the Nexo SUV, and
they can actually pull the hydrogen
“As of this year Australia is the world’s
out using the CSIRO technology,
biggest natural gas exporter. Hydrogen
which opens up fuel cell technology to
could be in the same position in the
Hyundai spokesman Scott Nargar said
markets that previously did not have
next couple of decades.”
the main advantage of hydrogen over
the technology.”
Toyota’s Mirai.
electric cars was they could be filled up
48 | POWER INSIDER VOLUME 10 ISSUE 1
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FEATURE: SPI CONSULTING
Hydrogen for better lives Renewable energy consumption in the Eurozone has been growing, 8.5% in 2008 16,7% in 2015( eurostat), with the goal of achieving a 20% reduction by 2020 and 27% by 2030. The renewable plants are differently
The gas once produced and stored can
spread in every country, some countries
be used to:
have more photovoltaic other eolic, by
•
Green mobility
the way all renewable energies have
•
Electricity production
a common problem: they are not on
•
Thermal energy production
now becomes a source of
demand energies, the production rate
•
For industrial application
financial gain.
•
risk diversification, as it can enhance hydrogen in different ways are not tied to a single market.
it’s not related to production request.
•
•
Solution
What before was being wasted
improved overall efficiency of the system for the use of surplus.
See Fig 1
SPI Consulting proposes to use
AEM Technology (anionic exchange
hydrogen generator to transform
Using renewable energies and hydrogen
the surplus of renewable energy into
together, they lead you to realize a
hydrogen gas, which can be exploited in
stand-alone energy island without
different markets.
create a very expensive net.
Advantages
Environmental advantages
Combine a hydrogen gas generation
The average renewable energy
system to a renewable energy source
consumption stands at 16.7% this
has several advantages.
means that the energy produced is
Economic advantages
greater, whereas not all the energy produced is used, then being able to
membrane)
The benefits of Transforming the
also use the surplus there would be a
Spi Consulting suggests to use the
surplus electricity into hydrogen are:
net reduction of nuisances.
surplus of renewable energy to produce
•
hydrogen via electrolysis of water.
breakeven point much more accurate
See Fig 2
Figure 1.
50 | POWER INSIDER VOLUME 10 ISSUE 1
Figure 2.
FEATURE: SPI CONSULTING
SPI Consulting is an engineering
Expertises
Enstack electrolytic stack
Company founded on 31 March 2011
Completed and under construction
SPI Consulting produces an Alkaline
by Ing. Alberto Valli and Mr. Emanuele
projects
Electrolytic Stack with an innovative
Castioni, President and Chief Operating
•
Design and manufacturing of
technology. Our anionic-exchange
Hydrogen Generators
polymeric membrane splits the
Officer and registered at the Chamber of Commerce of Verona. The Company is
•
Fuel Cell System integration
hydrogen and the oxygen directly
involved in the research & development
•
Manufacturing of Range Extender
during their generation permitting
for the production of hydrogen gas by
hydrogen-based for electric
an high differential
water’s electrolysis, and these studies
vehicles Hydrogen FC bycicle
pressure
Design and manufacturing a
between
power unit Hydrogenbased
anode and
Power Unit design and
cathode
manufacturing for Drone.
up to 20 bar(2MPa).
have led to significant achievements
•
such as the creation of a system for the production of hydrogen by water’s
•
electrolysis. The Company designs energy systems based on renewable
•
UPS fuel cell based
/ alternative energy, having also done
•
Energetic Audit for industrial plant
research and developed the concept of
•
Industrial design for a on-site
small smart-grid where in the following
MANUFACTUR
The Corporate’s core business is the manufa The Company also designs and produce Hy
Enstack Series
concrete plant
areas: •
Home
Manufacturing and Sales
•
Small residential construction
The Corporate’s core business is the
•
Automotive
manufacturing of electrolytic stack
•
Small electric boats
to provide hydrogen. The Company
The modus operandi developed has
also designs and produce Hydrogen
G-Enstack
Generators, with compressor (optional).
Hydrogen generator with integrated
led the Company to achieve important
compressor up to 300 bar.
results in terms of operating and
Some features: AMES ELECTROLYTIC
organizational structure:
Consulting produces an Alkaline Electrolytic Stack w • SPI Hydrogen production 500Nl/h Our anionic-exchange polymeric membrane splits the • during Compression 15:1 permitting an high differenti their generation cathode up to 20 bar(2MPa).
•
High Know- How on several engineering field
•
Scientific update
Some examples of our achievements
•
Water Maker
•
Remote Control
STACK
G-ENST During these years the Company
Hydrogen
has created an extensive network of
•
Financial Analysts
•
Market Analysts
•
Radio Broadcasting
•
Mechanical industries
•
System integrator
The current management team is composed of founding members, Eng. Alberto Valli and Mr. Emanuele Castioni, which is accompanied by Eng. Mauro Gamba, with many years of experience
g-enstack
in various sectors such as:
™
national and international relationship
in logistics and organization.
FOLLOW US ON TWITTER: @PIMAGAZINEASIA WWW.PIMAGAZINE-ASIA.COM | 51
Some featu Hydrog Compre Water M Remote
Hydrogen, Instrumental in Diversifying the Energy Mix in Asia The potential for the widespread use of hydrogen as a zero-emission fuel is gaining traction in Asia Governments and investors in Japan,
Achieving the Hydrogen Council’s
funding are planning new utility-
China, South Korea and Australia are
target will require investments of up
scale renewable projects to produce
increasingly turning to hydrogen as a
to $25bn annually through 2030
hydrogen for export to Asia.
long-term alternative to fossil fuels,
to double hydrogen production,
suited to a decarbonised world.
provide distribution infrastructure,
“Making the two-degree scenario a
and produce equipment such as fuel
reality will require hydrogen solutions
Hydrogen’s range of potential
cell electric vehicles (FCEV), trains,
across the whole energy system,” the
applications include diverse forms of
heating equipment and components at
global chief-executive-led Hydrogen
energy use from power generation
decreasing costs.
Council noted in its November 2017 report Hydrogen Scaling Up. This sets
to transport, heating and industrial processes. According to the Hydrogen
About 20 countries—led by Japan,
out a pathway to achieve significant
Council, the international hydrogen
South Korea, Germany, China and the
hydrogen penetration by mid-century,
market could be worth $2.5 trillion by
US state of California—are initiating
including requirements for hydrogen
2050, meeting 18% of total global
the market scale-up through public-
infrastructure and manufacturing
final energy demand, provide 30m
private partnerships and targeted
capacity, as well as the steps needed
jobs globally and reduce CO by 6
incentives.
to achieve competitive costs and mass
2
gigatonnes per year.
market acceptance. In Asia, China is targeting the
The International Energy Agency has
installation of 1,000 hydrogen
Fuel for transport
identified hydrogen as instrumental
refuelling stations (HRS) by 2030
Hydrogen has long been considered
in diversifying the global energy mix
serving over 1m FCEVs. By 2025, it also
a pariah as a transport fuel following
and reducing emissions, while Shell
expects to have transformed the city
the May 1937 Hindenburg passenger
is predicting that hydrogen will be
of Wuhan into the country’s leading
airship disaster. But technological
a major energy carrier from 2040.
hydrogen hub.
advances mean it can now be produced, transported and used for
By the end of the 21st century, it’s envisaged that hydrogen could supply
Japan expects to have over 900 HRS
power generation, heating, industrial
a quarter of all transport energy
operating by 2030 and South Korea
processes and transport in a stable,
demand, according to KPMG advisory
around 310 by 2022. In Australia,
sustainable and cost-competitive way.
service.
investors backed by government
52 | POWER INSIDER VOLUME 10 ISSUE 1
Himoinsa Far East
HIMOINSA FAR EAST 101 Thomson Road, #15-05 | United Square | Singapore 307591 Tel.: +65 6265 10 11 | Fax: +65 6265 11 41
FEATURE: DIVERSIFYING THE ENERGY MIX IN ASIA
On the production side, the falling cost and widespread deployment of utility-scale wind and solar photovoltaics, provide the opportunity to generate hydrogen with zero emissions. Norway and Australia are leading the field, with both looking to produce hydrogen
The overarching appeal of hydrogen is that, when burnt in pure oxygen, its only by-product is water.
Japan expects to have over 900
In Asia, Japan is leading the field in policy, regulatory and infrastructure investments to support the transition to a fully-fledged hydrogen-based society. The aim is to improve air quality, significantly cut emissions from generation and transport, reduce reliance on imported fossil
from renewable power on a scale for export in large volumes.
Rising demand in Asia
a stable cryogenic liquid state, albeit
fuels and improve emergency
at even colder temperatures than
response capabilities.
liquefied natural gas. As outlined in its Strategic Roadmap
hydrogen refuelling stations operating At present, ammonia is considered
for Hydrogen and Fuel Cells, Japan’s
the most promising hydrogen
Ministry of Energy, Trade and Industry
Target markets are countries which
carrier due to its relatively low
(METI) is coordinating a long-term
face obstacles in decarbonising their
cost, high energy density and ease
strategy to accelerate the uptake of
heat and power processes. Some
of liquefaction. In 2017, Japanese
FCEVs, fuel cell buses and hydrogen-
lack the space to install renewable
researchers also discovered a new
fired power generation facilities, both
generation capacity on their own.
method of producing hydrogen from
small and large-scale. METI expects
Others, with off-grid markets, rely on
ammonia at room temperature, giving
Japan’s annual consumption of
imported diesel or heavy fuel oil to
a significant boost to hydrogen’s long-
hydrogen will grow from 4,000 tonnes
generate electricity.
term potential.
in 2020 to 300,000 tonnes by 2030
by 2030
and 5-10m tonnes by 2050. The potential for large-scale
On the consumption side,
renewable-to-hydrogen production
technological advances in fuel cells
Since 2013, Japan has been
is supported by advances in liquefied
and other combustion technologies
developing a network of commercial-
natural gas transport, which has
mean hydrogen can be used in fuel
purpose hydrogen refuelling stations
proven that gas can be shipped
cell batteries for large and small-
to support FCEV uptake through
safely in large quantities around the
scale power generation, heating and
JHyM Japan H2 Mobility, an alliance
globe. Carrier compounds such as
transport. The overarching appeal of
of 16 utilities and car makers set up to
methanol, formic acid and ammonia
hydrogen is that, when burnt in pure
coordinate and expand the network.
enable hydrogen to be transported in
oxygen, its only by-product is water.
54 | POWER INSIDER VOLUME 10 ISSUE 1
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FEATURE: DIVERSIFYING THE ENERGY MIX IN ASIA
The roll-out will support Japan’s plan to have over 40,000 FCEVs on the road by 2020, when Tokyo will host the Summer Olympics and Paralympics, rising to 200,000 by 2025 and 800,000 by 2030. At least 1,200 fuel cell buses are also expected to be on the roads by 2030. In terms of pump pricing, METI expects FCEV owners will be able to buy imported hydrogen for approximately Y30 ($23) per normal cubic metre by 2030—equal to around $3 a gallon of petrol-falling to Y20/normal cm by 2050. At present, pump prices for imported hydrogen in Japan are tracking around Y100/normal cubic metre. In power generation, Japan is looking at switching from coal and imported LNG to hydrogen for its gas-fired power plants and coal gasification stations, using liquid import shipments
High investment in peak renewable energy production means Australia has considerable scope to develop hydrogen as an export product.
Development (AHEAD) project is being developed by Japanese companies Mitsubishi, Nippon Yusen, Chiyoda and Mitsui, with Brunei’s Sungai Liang Industrial Park to produce hydrogen from gas from Brunei LNG.
Australian production potential The investment is one of many taking place in Australia, which is also waking up to its vast geographic potential
from Brunei and Australia. To this end, Japanese companies such as
liquefied hydrogen to Japan through
to supply hydrogen produced from
Kawasaki Heavy Industries, Iwatani,
a $375m Hydrogen Energy Supply
renewable energy sources.
J-POWER and Marubeni are investing
Chain (HESC) project. This will gasify
The existence of vast swathes of
in hydrogen production projects in
brown coal to extract hydrogen with
available land for renewable facilities,
Australia and Brunei.
carbon capture and storage (CCS).
plentiful solar and wind resources, and
The coal-to-liquids project is targeting
high investment in peak renewable
In Australia, Japanese groups are
commercial start-up by 2030.
energy production means Australia
partnering with AGL Energy and Shell
In Brunei, the Advanced Hydrogen
has considerable scope to develop
to establish a supply chain to import
Energy Chain for Technology
hydrogen as an export product.
56 | POWER INSIDER VOLUME 10 ISSUE 1
FEATURE: DIVERSIFYING THE ENERGY MIX IN ASIA
The overarching appeal of hydrogen
Neoen and Megawatt Capital are
In Western Australia, the Asian
is that, when burnt in pure oxygen, its
already partnering with Siemens and
Renewable Energy Hub project is
only by-product is water.
Hyundai to build a small 1.25MW
considering using part of its planned
hydrogen electrolyser, which converts
utility-scale wind and solar project
In South Australia, French renewable
electricity to hydrogen, in the
in the Pilbara region to split water
developer Neoen recently announced
Australian Capital Territory.
into hydrogen and oxygen using
plans to build a hydrogen super-hub
electrolysis. Backed by CWP Energy
at Crystal Brook to export renewable
Asia, Intercontinental Energy and
hydrogen to Asia. The 50-megawatt
Vestas, the $15bn project is targeting a
hydrogen electrolyser would be
final investment decision by 2021 and
powered by a 300MW wind and solar
is also anticipating exporting power
farm and 400 megawatt hours of
to Southeast Asia through a subsea
battery storage, and could produce up
cable.
to 20,000kg (20 tonnes) of hydrogen a day.
In recognition of Australia’s potential to become a world leader in hydrogen exports, the Commonwealth Scientific and Industrial Research Organisation Hydrogen Utility (H2U) and Germany’s
(CSIRO) is investing $10m into
Thyssenkrupp are also planning
hydrogen fuel research through its
to build a renewable-hydrogen
Future Science Platforms.
electrolyser plant at Port Lincoln in South Australia with a 5MW hydrogen
As Karl Rodrigues, CSIRO’s Deputy
fuel cell and a 10MW hydrogen-fired
Director for Energy, put it “we could
gas turbine fuelled by wind and solar.
literally bottle our sunshine through electrolysis and sell it”.
“We could literally bottle our sunshine through electrolysis and sell it” FOLLOW US ON TWITTER: @PIMAGAZINEASIA WWW.PIMAGAZINE-ASIA.COM | 57
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