Pimav7i4

A S I A’ S

LEADING

POWER

REPORT

VOLUME 7 ISSUE 4

ASIA’S MICROGRID

EXPANSION LUBRICATING TURBINES AIR POLLUTION IN CHINA GEOTHERMAL CHALLENGES” “INDONESIA’S BIOMASS MARKET”

INTERVIEWS

Etienne Droucet - Engie Mohamad Selim - Aetra Manuel Aguilera - Himoinsa

W W W. L A N D I N S T . C O M

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W W W. A M E T E K . C O M

Editors Note Well there is never a dull moment in the energy market that’s for sure!

News this week in the UK that Fracking licenses are being granted, which is great for accessing a huge amount gas reserves. I’ve watched with interest the media on this issue. I’m yet to see a story in the National press actually covering all aspects of the process. Many locals have complained but the shout from the green sector has been pretty quiet, or at least it hasn’t been reported! I have my own views on Shale and fracking, feel free to ask me anytime face to face, but as editor I will keep my opinion to myself until an upcoming edition where we look at these developments.

Moving away from the international market, we are here for news on Asia, and we have some fantastic content. We are in the process of launching an exciting event for the Indonesian Micro grid market, we also have some great coverage in this edition!

As it’s coming to the end of events season and we look tie the year up, I would like to thank you all for your continued support, stories and press releases.

Please keep us on point for 2017, we have huge things planned and always look for new and exciting content!

Well, I hope you enjoy this edition, it’s rammed with great interviews, and articles and overviews that I am sure will keep your attention.

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Power Insider Media Limited, Ashford Old Farm, Ilton, Ilminster, UK, TA19 9ED. T: +65 31586864, M: +44 (0) 7930572199, E: sean@pimagazine-asia.com, W: www.pimagazine-asia.com Power Insider media limited are the publishers of pimagazine asia. Pimagazine asia is published bi monthly and distributed to senior decision makers throughout Asia and the Pacific. The publishers do not sponsor or otherwise support any substance or service advertised in this publication; nor is the publisher responsible for the accuracy of any statement in this publication.

Copyright: the entire content of this publication in print and digitally is protected by copyright, full details of which are available from the publisher. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electric, mechanical, photocopying, recording or otherwise without the prior written permission of the copy right owner.

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Contents Inside This Issue 12 20 26 32 56 36 34 42 44 48 52

FEATURES The Right Turbine Oil Provides Advantages that Result in Turbine Reliability for Power Plants China’s Air Pollution Costing More Lives!

Indonesia’s Geothermal Challenge Indonesia Can Secure its Energy Future through Renewable Microgrid Jump Starting the Dormant Indonesian Biomass Sector Running the world without consuming the earth: Solar Impulse demonstrates the potential of microgrids AMI Infrastructure Developments across Asia – Progressing the Digital Utility Technology Driven Alternative Approaches with Conservative Capital Requirements Trends Impacting Global Microgrid and Virtual Power Plants

INTERVIEWS 18 Mr Jaroslav Kucera • Regional Director Comap Asia Pacific

24 Mr Mikkel Gleerup • Director, sales & commercial, at global marine systems limited

30 Manuel Aguilera • HIMOINSA • Gas Product Manager

34 Mr. Mohamad Selim • President Director of Aetra, about the company’s activities in Jakarta

40 Etienne Drouet • Director, ENGIE Lab Singapore 4 | POWER INSIDER VOLUME 7 ISSUE 4

A new generation is born

02/2016 - Petergraf

New products.

New technologies.

New service capabilities.

Ansaldo Energia: a global player in the power generation market.

www.ansaldoenergia.com

COMPANY NEWS

GE IN TEPCO DIGITAL UPGRADE Today, the power segment of General Electric Company (NYSE:GE) and Japan-based Tepco Fuel & Power, Inc. entered into an agreement for mutual development and introduction of Industrial IoT solutions.

These products will be implemented throughout Tepco thermal power plant fleet through GE’s Predix platform.

The implementation will start from Tepco’s LNG-based Futtsu Power Station Unit 4. The company will install General Electric’s Asset Performance Management (APM) software in the vicinity. This installation is scheduled to get started in 2017.

On the signing ceremony, Tepco Fuel & Power, Inc President, Toshihiro Sano expressed his remarks: As we look at the future energy needs of our customers, we must invest in the latest digital solutions that can help us increase the productivity, efficiency and reliability of our existing power plants. With the help of General Electric’s Predix and APM, the company is likely to collect and analyze its industrial data in real-time manner. This will result in improved 1,520-megawatt power plant performance with enhanced operations at Tepco’s Futtsu power station site.

GE Power President and CEO, Steve Bolze penned his remarks: GE is honored to collaborate with Tepco to deploy our

6 | POWER INSIDER VOLUME 7 ISSUE 4

advanced digital solutions to increase the reliability and performance of its thermal power plants and enhance Japan’s energy supply.

SCHNEIDER IN RURAL ELECTRIFICATION PROJECT Schneider Electric announced that it has launched Light It Up, a corporate social responsibility (CSR) program to bring access to electricity to rural communities across the Asia Pacific region. From midSeptember to early November, Schneider Electric employees will distribute more than 1,800 units of the Mobiya solar lamps to rural communities in 12 countries across the region.

Economic and social development is largely driven by access to energy. However, around 1.3 billion people on this planet still lack access to modern energy today, while another one billion people have access to only unreliable electricity networks.

A significant proportion of the world’s energy poor are living in Asia. In countries like Myanmar and Cambodia, the rural electrification rate can be as low as 18 per cent.

Schneider Electric believes that access to energy is a basic human right, and it is committed to put reliable, affordable and green energy within reach of a great many

households across the Asia Pacific region.

SAFE AND CLEAN ACCESS TO ENERGY Schneider Electric’s commitment to promote sustainable development and provide safe and clean access to energy is in its DNA. In the past six years, Schneider Electric has contributed to providing 5 million people with access to energy. The goal is to reach 50 million people within the next 10 years.

With Light It Up, Schneider Electric employees, as well as sponsors from Schneider Electric’s partners and customers from 17 countries in Asia Pacific have bought and sponsored a total of over 1,800 Mobiya solar lamps.

These lamps will be distributed to rural communities across 12 countries: Bangladesh, Brunei, Cambodia, Indonesia, Laos, Malaysia, Mongolia, Myanmar, Pakistan, the Philippines, Thailand and Vietnam, connecting a total of over 1,300 families to electricity and lighting, and helping to improve living conditions for these communities.

LIGHT IT UP WITH INNOVATION AT EVERY LEVEL At Schneider, we believe that access to energy is a basic human right which should be made available to everyone. I am happy that this project brings many

parties together who want to contribute meaningfully in helping remote communities gain access to safe, reliable, efficient and sustainable energy, said Damien Dhellemmes, Senior Vice-President of Global Supply Chain, East Asia, Japan & Pacific at Schneider Electric.

With the Light It Up program, we look forward to sharing our innovation at every level in energy with the rural and remote communities in this region.

via a sustainable entrepreneurship plan.

The fishing community in Dreamland Rosario at Cavite in the Philippines is considered one of the poorest districts in the province. The 50 families in the community cannot afford electricity in their homes, and have to rely on kerosene and candles for their lighting needs. Schneider Electric will donate Mobiya solar lamps to the 50 affected families to not only help

DROP IN RE INVESTMENT IN CHINA Government cutting subsidies for the sector as a result of slowing economy BEIJING • After installing more wind and solar farms than anywhere else on the planet, China is ratcheting back the pace of growth in an industry that has helped lower the costs of green energy worldwide.

Here are some of the key projects that will take place this year: 162 households in the Kawhmu Village in Myanmar are living in poverty and have no access to the outside world. Upon recommendation from the Department of Rural Development, Government Ministry (DRD), Schneider Electric aims to equip each household with a Mobiya solar lamp to improve the lighting situation for late night studying and increase the safety for nighttime transportation.

96 low-income households in the suburban area on the hills of Ulaanbaatar in Mongolia do not have access to electricity and rely on candles as their main source of light. In collaboration with the FrenchMongolian Chamber of Commerce and Ulaanbaatar’s Social Welfare and Service Department, Schneider Electric aims to provide every household with a Mobiya solar lamp to extend childiren’s study time and adults’ productivity.

Installations of new wind and solar farms in China are expected to drop 11 per cent next year, from a record high this year, according to Bloomberg New Energy Finance (BNEF). That would be the first decline in the history of the modern renewables business, now a little more than a decade old, for a nation that has provided about a third of the investment for the industry.

After five years of breakneck growth in supply, China’s electricity demand is stagnating, along with a pause in the nation’s economic expansion. President Xi Jinping’s government has started re-calibrating subsidies for the business, a move that’s likely to hit the industry’s leading manufacturers, Xinjiang Goldwind Science & Technology and Trina Solar.

275 households in Tan Loi Village in the An Giang Province of Vietnam from the Khmer ethnic minority group are living off-grid with no sustainable source of income. In partnership with GreenID (a local NGO) and the Women Union of Tan Loi, Schneider Electric will be providing 192 Mobiya solar lamps to the village, which will be distributed to the villagers

the families to cut down their spending on kerosene fuel, but also as fish bait and safe use on fishing boats.

The Mobiya range of portable products for lighting and mobile charging is an award winning energy- efficient and eco-friendly LED lamps that provide up to 48 hours of lighting with one day of solar charge.

China shapes the whole world market, Mr Paolo Frankl, head of the International Energy Agen- cy’s renewable energy division, said in an interview.

The move is crucial for renewables because China has been the single largest developer of the technology for eight years. Its demand for panels and turbines

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has pushed manufacturers to build factories throughout Asia, and the scale of its projects helped bring down the cost of electricity from low-polluting sources everywhere.

The insanity in China gave a false sense of security to manufacturers to ramp up new capacity, said Mr Charles Yonts, an analyst at CLSA Asia-Pacific Markets in Hong Kong.

Mr Jules Kortenhorst, chief executive officer of Rocky Mountain Institute, an energy consultant based in Boulder, Colorado, said: In the long run,… China is committed to a low-carbon future.

While global clean energy capacity is expected to swell 17 per cent next year, it’s still the slowest in at least a decade, according to BNEF, a researcher based in London. China’s wind and solar capacity will grow 41.8 gigawatts next year, down from a record 46.9 gigawatts this year, BNEF estimates. A nuclear reactor generally produces a gigawatt of power.

The slowdown could be short-lived.

China has a history of working to prop up its manufacturers, and if makers of turbines and photovoltaic panels stumble, the authorities may unleash new incentives. China’s current plans for investing in clean power suggest that installations will rise again by 7 per cent in 2018, BNEF estimates.

Even so, the fall-off expected for next year is notable because the industry has come to rely on China since it started its rapid expansion early in the last decade. Renewables manufacturers and developers are not accustomed to slow growth and now are facing tougher times, as highlighted by the bankruptcy of Sun- Edison in April.

China’s easing stems from a shift in government green policies. Last December, Chinese officials announced they would gradually start curtailing rates paid to wind and solar development starting in the middle of this year.

The lower prices for clean electricity reflect declining construction costs and will be cut again in 2018. The move triggered a flurry of building in the first half by companies pushing to break ground before the lower rates kicked in.

Just how the slump will impact overall company earnings is not clear yet. But the lull may help China digest a building binge in clean energy.

8 | POWER INSIDER VOLUME 7 ISSUE 4

backing militant groups operating in the Himalayan state of Jammu and Kashmir, through which several of the countries’ shared rivers flow.

INDIA & PAKISTAN DISAGREE ON HYDRO DEVELOPMENT PLANS Disagreements over how to share the waters of the Indus and other rivers have dogged relations between the nuclear-armed archrivals since independence in 1947

Pakistan denies the allegations and says India has not provided adequate proof to support its claims. A spokesman for Pakistan’s foreign office did not immediately respond to a request for comment about Modi’s hydropower plans.

India will accelerate its building of new hydro-power plants along three rivers that flow into Pakistan, a source familiar with the plan said on Monday, in a move likely to aggravate already tense relations with its neighbour a week after an attack on an Indian army base.

At Monday’s meeting, Modi and officials discussed ways to increase exploitation of the Chenab, Jhelum and Indus rivers but said they would not violate a long-standing water treaty between the countries in the process.

The dispute looks set to be reignited after Prime Minister Narendra Modi told officials on Monday that India

We want to see that all these (hydro-

construction of thousands of upstream dams has continued to annoy Pakistan, which depends on snow-fed Himalayan rivers for everything from drinking water to agriculture.

India says its use of upstream water is strictly in line with the 1960 agreement.

The potential for a military conflict between India and Pakistan over water has long worried observers. The neighbors have fought two of their three wars over Kashmir.

India currently generates about 3,000 megawatts of energy from hydropower plants along rivers in its portion of Kashmir, but believes the region has the potential to produce 18,000 megawatts, the source said.

New Delhi will also review whether to restart construction of the Tulbul navigation project, which was suspended several years ago. The project proposes diverting water from one of the shared rivers to a city in Indian-administered Kashmir that could impact flows downstream, the source said.

A spokesman for Modi’s office declined to comment.

INDONESIA’S LARGEST WIND PROJECT Indonesia’s national energy company, PT. PLN, has signed a deal with an international group of investors led by Singapore-headquartered energy and infrastructure specialist Equis to build the country’s first large-scale renewable energy project.

should use more of the rivers’ resources, speaking a week after the September 18 attack on an army base in the disputed region of Kashmir that New Delhi blames on Pakistan, a source with knowledge of the meeting attended by Modi said.

India has vowed to respond to the raid, in which at least 18 of its soldiers were killed, but any military option risks escalation. Some officials have called for a renewed diplomatic offensive instead.

Modi said on Saturday that India would mount a global campaign to isolate Pakistan, including through the United Nations, where Foreign Minister Sushma Swaraj spoke on Monday.

India has long accused Pakistan of

power) projects are put on a really fast-track basis, the source told Reuters, speaking on the condition he was not named because of the sensitivity of the meeting.

Our entire approach was done to create an atmosphere of goodwill. But in this atmosphere, we want to exploit all our rights under the (Indus Water) treaty, the source said.

The Indus Water Treaty was signed in 1960 in a bid to resolve disputes, but India’s ambitious irrigation plans and

Signed on September 19 in Copenhagen, the 60MW capacity South Sulawesi wind farm will be Indonesia’s largest wind farm yet and is seen to help achieve the country’s ambitious goal of adding 35,000MW of additional energy to its current supply, with 23 per cent coming from renewable sources, by 2025.

Rini Soemarno, Indonesia’s minister for State-Owned Enterprises, and Lars Christian Lilleholt, Danish minister for Energy, Utilities and Climate, witnessed the signing ceremony. Danish company Vestas Wind Systems, the world’s largest producer of wind turbines, also signed a conditional agreement to provide the wind turbines for the project.

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We are confident this project can help pave the way for additional wind power investments in Indonesia.

private sector companies.

accidents killing 20 and injuring five.

EVN SUFFERS MORE BREAKDOWNS

The start of construction and commissioning dates for the wind farm project has yet to be announced, but a news site said the wind farm project comprising 21 wind turbines is expected to be completed by 2017.

The number of electrical breakdowns in the south in the first six months this year increased sharply compared with the same period last year, said the Safety Department under the Southern Power Corporation of Vietnam Electricity (SPC EVN).

Reasons included short circuits, unsafe wires and carelessness while using electricity, he said.

Green energy proponents and investors are viewing the South Sulawesi project as an impetus for Indonesia, the fifth biggest CO2 emitter in the world, to transition to green energy.

The country signed the Paris Agreement at COP21 last year where it announced a goal to reduce greenhouse gas emissions by up to 29 per cent by 2030. Indonesia has yet to ratify the Agreement.

Casper Klynge, Danish ambassador to Indonesia, said: I am proud that Denmark and Danish companies can assist Indonesia by providing state-of-the-art green energy solutions to support the government’s objective.

Vestas CEO Anders Runevad said Indonesia’s wind energy has great long-term potential. We are confident this project can help pave the way for additional wind power investments in Indonesia.

The collaboration for the wind farm project is a result of a long-running cooperation between Indonesian and Danish government authorities and

10 | POWER INSIDER VOLUME 7 ISSUE 4

A total of 12 breakdowns happened on the 110kV electric system, an increase of nine compared with the same period last year.

According to Vị the electric system at present still has several faults, so the risks of electric accidents remain high.

Some parts of the 110kV electric system pass rubber tree planting areas and there is little safe space between the trees and the electric wire.

The 22kV electric system has bare wires and passes crowded residential quarters with many trees.

As many as 37 breakdowns happened on the 22kV electric system, an increase of six cases.

Besides, many houses and other construction works were built in the electric safety corridor, he said.

Several provinces and cities witnessed a high number of electrical breakdowns such as Bình Dương, Đồng Nai and Đồng Tháp.

Moreover, some provinces planted trees in the electric safety corridor.

Dương Văn Vị, director of the Safety Department, told the Tiền Phong (Vanguard) newspaper that the reasons for the breakdowns were residents cutting down trees and flying kites on the roads damaging electric wires. Several vehicles collided into the electric poles and construction work also affected the wires.

Nguyễn Văn Tư, deputy director of the Đồng Tháp Electric Company, said that besides electric breakdowns, accidents related to electricity were on the rise.

Last year the province saw 24 electrical

Bình Dương Province planted trees along roads in the province and in the safety corridor of the 22kV system creating difficulties for electrical operation, said Vị.

Vị said that departments under the EVN SPC conducted different measures to reduce the electric breakdowns.

A steering committee was set up to protect the electric system and more workers were assigned to check the electric safety corridor.

The EVN SPC co-operated with localities to mete out punishment for violations.

mtu 1

THE RIGHT TURBINE ADVANTAGES THAT R RELIABILITY FOR PO

Indonesia’s government plans to build hydroelectric plants at 239 dams owned by the Public Works Ministry, as part of its renewable energy initiative.

I

n recent years, increased demand for electricity has caused power producers to operate their power production turbines differently. In times of heavy need, commonly called peak demand times, they have to push their turbines harder to maximize production. Yet, the cost of fuel sources have continued to increase, so during non-peak times, they either dramatically slow down or completely shut down some of their turbines to reduce fuel consumption and emissions. This type of production is called peaking operating cycle.

Within the past few years, many power producers using the peaking operating cycle have realized that they were having turbine operation reliability problems.

Coincidentally, in the late 1990s, turbine oil producers began producing newer formula turbine oils. In the laboratory, these new turbine oils looked amazing, but in the field they were not performing as well. Many of

12 | POWER INSIDER VOLUME 7 ISSUE 4

the reliability problems seemed to be traced back to the turbine oil.

Since then, a significant amount of research has been conducted, and it has been determined that it is not just one factor; instead, it is a perfect storm of various factors causing these problems.

Among the major concerns in gas turbines are oil consumption and the formation of varnish and sludge. Steam turbine operators have experienced increased problems related to foaming, oxidation, loss of water separation and sludge buildup. Subsequent studies have determined that the combination of the new operating conditions and the new turbine oils has resulted in these problems. Fortunately, continued research has begun to point out new ways to help mitigate these problems.

One obvious suggestion is to evaluate the current condition of the oil in the unit, and - if the condition is problematic - change the oil.

Turbine Problems The highest profile turbine oil-related problem experienced at power plants

has been the formation of sludge and varnish, but various other problems also have been reported. These problems include: Lubricant consumption The formation of a gel-like material on the turbine chiller bundles Electrostatic spark discharge in the turbine filtration systems Corrosive wear on the turbine thrust plate bearings Reduced life from the turbine oil For obvious reasons, turbine owners and manufacturers have become frustrated with the performance of many turbine lubricants. General Electric, one of the major turbine manufacturers, issued a service bulletin regarding varnishing (10}. These types of problems did not occur in the past, which leads to the question: why are they occurring now?

At the 2007 Lubrication Excellence Conference in Louisville, Ky., one of the presentations was based on a paper by William Moehle and his associates titled Practical Approaches

E OIL PROVIDES RESULT IN TURBINE OWER PLANTS to Controlling Sludge and Varnish in Turbine Oils (11}.

Moehle’s paper provides an accurate, concise description of the mechanism for the varnish and sludge formation in turbines. Figure 2 in his paper is a flowchart that illustrates the complex mechanism that results in the formation of turbine sludge and varnish. Moehle pointed out that turbine oils were not the sole cause of the problems. He summarized this by using an illustration of a chain, shown in Figure 3 in his paper.

The problems identified by Moehle and his associates were the result of a chain reaction from various combinations of inferior lubricant formulation, thermal degradation, additive depletion and poor fluid maintenance.

With its properly formulated lubricants and its reliability partner products and services, such as filtration systems, sight glasses, oil analysis and training, Lubrication Engineers, Inc. can provide a comprehensive solution for all of these problems. This paper, however, will focus primarily on the lubricant formulation link of the chain.

Lubricant Formulation Compared to some of the other types of lubricant formulations, turbine oil formulations are quite simple. They are a mixture of the following ingredients: Base oil Corrosion inhibitors Oxidation inhibitors Defoamants Demulsifiers The base oil is usually 97 percent or more of the turbine oil formula.

Additives are blended into the base oil

at low levels to protect both the oil and the turbine parts. Additives should be chosen so that they provide optimized performance in the turbine, per OEM requirements.

Recently, however, many turbine lubricants have been formulated with base oils that were refined with newer techniques. Most laboratory bench test data indicated that the use of these new base fluids should provide longer lubricant life in field applications.

Unfortunately, this has not been found to be true. In addition to the newer base fluids, studies have linked certain antioxidant combinations to the formation of sludge and varnish (11}.

Lubrication Engineers has found that its Monolec® Turbine Oils eliminate the problems mentioned above, as demonstrated by field performance.

How? LE’s Monolec Turbine Oils are formulated using a specially optimized mix of base oils and additives, including Monolec, LE’s exclusive wear-reducing additive. Field experience has shown that this formulation provides the proper synergy between the turbine and the turbine lubricant. The LE technical staff has conducted many hours of literature research to understand why this would be the case. Prior to three to four years ago, the oil analysis industry did not have much in the way of tests that would reliably predict a lubricant’s tendency to form sludge or varnish. New tests have been developed and are being used to evaluate varnish-forming tendencies.

One of these is the Quantitative Spectrophotometric Analysis, QSASM, a test developed by Analysts, Inc. from which is produced a varnish potential rating, VPR (7, 8}. The LE technical staff continually monitors the industry for developments and evaluates new test

methods as they become available.

Although the main evidence of Monolec Turbine Oil success thus far has been field performance, it is also possible to use good science to explain this success.

Literature Research Findings Literature research can be used to describe the various causes of turbine oil sludge and varnish as noted by Moehle and his associates. Literature also can be used to answer How? LE’s Monolec Turbine Oils eliminate these problems.

Oxidative Degradation As previously noted, the largest part of any given turbine oil formulation is its base oil. While in service, turbine oil will eventually begin to break down through a mechanism known as oxidative degradation. Varnish and sludge in turbines are attributed generally to oxidation and degradation of the lubricant. Most lubricant base fluids are produced from crude oil through a process known as refining.

During the refining process, crude oil is heated and treated in such a fashion as to separate it into certain viscosity cuts that can be blended with additives to formulate industrial and automotive lubricants. Through the late 1980s or early 1990s, the majority of lubricant base stocks were finished through a process known as solvent refining.

Solvent-refined oils were finished through complex mixing and distilling cycles with various solvents.

In the late 1980s, many refiners began to finish lubricants using a process called hydrotreating. Hydrotreating involves subjecting crude oil fractions to hydrogen gas under high temperatures and pressures. Hydrotreating removes many of the impurities that naturally occur in the oil fractions, such as sulfur

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compounds, aromatic compounds and nitrogen compounds. Solvent refining techniques were not as effective in removing these, so they were still present in the finished lubricant base fluids. In general, hydrotreating causes the complex mixture of crude oil to become a much tighter cut of single types of hydrocarbon molecules as compared to that processed through solvent refining.

Use of hydrotreated base fluids began to increase dramatically during the late 1990s and early 2000s. Turbine owners began to install these newer lubricants, anticipating longer life for the oil and increased turbine reliability. Instead, varnishing problems began to appear in many turbines. Some of these turbines had run flawlessly for years, without varnish, using what was considered inferior lubricating oils.

Researchers are discovering that some of the naturally occurring compounds that were removed by hydrotreating might provide performance benefits in turbines. The two major ones are sulfur-containing compounds and polyaromatic hydrocarbons. This is referenced by Moehle and his group as well as other researchers. The following paragraph points out the findings of several research groups that specifically support this premise.

Scientists at the Institute of Chemical Technology in Prague, Czech Republic,

14 | POWER INSIDER VOLUME 7 ISSUE 4

conducted research in which they tested nine hydrocracked base oils, as well as a polyalphaolefin (PAO} base oil, for oxidative stability (1}. They found that the oxidative stability of the hydrocracked oils was affected largely by their sulfur and

aromatic hydrocarbon content. The natural sulfur was shown to act as an inhibitor in these oils. In another study, researchers at Ethyl Petroleum Additives (now Afton Chemical} conducted research on 15 different base stocks, including hydrocracked oils and PAO oils (3}.

Like the previous researchers, they characterized these products for paraffinics, aromatics and napthenics content. What they determined was that low levels of multi-ring napthenics and polyaromatics affected volatility and oxidative stability of the base oils more dramatically than they expected.

Careful selection of antioxidant type was determined to be critical.

Another study was completed by scientists at the Institut Francais du Petole in RueilMalmaison, France (4}. Like the two preceding studies, these researchers evaluated the composition of various lubricating base fluids, including solvent-refined mineral oil, hydroisomerized (hydrocracked} mineral oil and 6-cSt PAO oil. They found that the normal solvent-refined mineral oils performed the best because they contained compounds that act as natural oxidation inhibitors. To make the study even more interesting, they extracted these naturally occurring ingredients from the mineral oils and added them to the hydroisomerized and PAO oils, which resulted in increased oxidation resistance with both of these

fluids.

Aside from the base fluids, antioxidants are added to oil to defend it from oxidative degradation. However, some antioxidants have been found to contribute to varnish and sludge.

Moehle and his associates note that it is best to use a combination of phenolic and aminic antioxidants. The aminics alone contribute to varnish.

The phenolics alone do not sufficiently protect the oil. The proper combination provides a synergy that protects the oils, and minimizes sludge and varnish formation.

Oxidative Degradation & Monolec Turbine Oil. How does the above-mentioned research describe why LE’s Monolec Turbine Oil performs better than other turbine oils? In any turbine oil, the highest concentration ingredient is the base fluid. The base fluid used in Monolec Turbine Oil might best be described as an API Group I+ base fluid. While technically API does not have a Group I+ category, a brief explanation of how it is refined might clarify the use of this LE-defined description. While industry experience and lab testing seemed to prove the increased value of hydrotreated oils, field performance proved the value of the solvent-refined oils. The base fluid

chosen by LE takes advantage of both technologies. It is first solvent-refined and then hydrofinished. This means that it is not hydrocracked, but it is hydrofinished.

By comparison, most of the API Group II and Group III oils are two-stage hydrotreated, meaning they are first hydrocracked and then hydrofinished.

The two-stage process removes nearly all of the aromatics, branched paraffinics, napthenics and sulfur. The almost complete removal of aromatics, branched paraffins and napthenics also results in base oil with lower solvency properties. The importance of this will be pointed out in subsequent discussions.

The Institute of Chemical Technology researchers found that low levels of sulfur provide natural antioxidant properties to the lubricant base oil.

They and the Ethyl researchers found that base fluids with higher levels of aromatics or napthenics possessed less oxidative and thermal stability properties. The Ethyl researchers noted that the structural deficiencies were overcome easily by proper additization of the base fluid. Because the base fluid used in Monolec Turbine Oil is both solvent-refined and hydrotreated, it contains a low level of sulfur that provides some natural oxidation resistance. Because it is hydrofinished, it does not contain very high levels of aromatics, so it resists

thermal degradation, yet it has enough to provide improved solubility for additives and oxidation byproducts.

As noted by the Institute of Chemical Technology researchers, lubricants with less than 20 ppm of natural sulfur and no aromatics actually had worse oxidation properties.

The base fluid in Monolec Turbine Oil gives the user the best of both refining technologies. The additive technology blended with the base stock provides a synergistic blend that provides maximum turbine oxidation and thermal stability properties, thus minimizing the formation of carbon, varnish and sludge.

Thermal Breakdown Thermal breakdown is similar to oxidation and likely increases the rate of oxidation. Like oxidation, it can result in varnish and sludge. Many assume that the temperatures and pressures experienced by the lubricant in turbine bearings are minimal, but recent field experiences indicate that these assumptions may be incorrect.

Phenomena known as cavitation and microdieseling are partially to blame for thermal breakdown. Cavitation occurs when entrained air is passed from the compression side of the turbine bearing

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to the discharge side. There is a dramatic increase in pressure applied to the gas bubbles. According to gas laws, the gas temperature increases dramatically in the range of 100° to 1,800°F (38° to 982°C} (2}. At these temperatures, a phenomenon called microdieseling can occur that causes increased oxidation and possible formation of carbon particles similar to the soot that forms in a diesel engine during combustion.

So, how does this relate to turbine applications? Turbines contain journal bearings that operate in the hydrodynamic wear regime (full film lubrication - no metal-to-metal contact}. In some turbines, the ends of the turbine shaft come near or make contact with a thrust plate because of front-to-back, or axial, movement of the turbine shaft. As the shaft contacts the thrust plate, the contact pressures are high enough to cause dramatic changes in pressure and temperature.

The spot temperatures noted above are high enough to result in thermal breakdown of the lubricant.

Researchers at the National Institute of Standards and Technology (NIST} and Cummins Engine Co. conducted a study on the oxidative stability and volatility properties of lubricants at elevated temperatures (5, 6}.

They found that although the sump

reactions cause the polymerization of the lubricant, they would cause the lubricant molecules to degrade into lower molecular weight, more volatile products. When this sort of volatility occurs in the engine, it results in a decrease of actual oil in the sump and an increased concentration of oxidation byproducts in the bulk oil due to a reduction in total oil. This results in

enough to cause oxidative volatilization of the lubricant, vaporization of water and cavitation of entrained air. The cumulative result is an increase in the amount of oxidative free radicals and carboxylic acids that form because of oxidation of the oil and form what have come to be known as precursors of sludge and varnish. When the concentration of the precursors gets

temperatures in engines averaged around 170°C (388°F}, the crown land temperatures averaged around 370°C (698°F}. Their goal was to create a bench test that would evaluate a lubricant’s thermo-oxidative properties, such as volatility, deposit forming tendency and hot metal surface catalytic effect. They described a phenomenon called oxidative volatility.

At the high temperatures noted in the crown land and ring zones of the engine, not only would oxidation

accelerated oxidative polymerization (formation of sludge and varnish} of the oil. Moehle and his associates also referred to thermal degradation of the lubricant in Table 2 of their paper.

It is also possible that cavitation and microdieseling result in oxidative volatilization of the lubricant, coupled with spontaneous releases of water vapor and entrained air on the lowpressure side of the turbine bearing.

As described above, the temperatures caused by microdieseling are high

too high for the base fluid to keep solubilized, they are deposited on turbine parts. As described earlier, the solvency properties of Group I base oils are superior to that of Group II base oils. Therefore, the Group I oils have been found to be more forgiving as varnish precursors form in the oil. By forgiving, this means that they can suspend more contamination than Group II oils.

16 | POWER INSIDER VOLUME 7 ISSUE 4

www.karpowership.com

power for asia

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Mr JAROSLAV KUCERA Managing Director ComAp SE Asia

Welcome to PiMagazine Asia, can you tell us a bit about how you made your way into this industry?

All my professional life I have been working on sales and marketing positions in companies active in the global market. Five years ago I joined ComAp, a company with activities all over the world and leader in control solutions for generators and industrial applications. In the beginning of my career in ComAp I was working in the position of Area Sales Manager for Central Asia and United Kingdom and especially market in India was great experience for me. It was also very interesting to see differences in customers´ behavior in India and UK. But even from the beginning my intention was to move on managerial position in one of ComAp´s subsidiaries. And because of my previous experience from Asian market, the subsidiary in Singapore was an ideal option.

Genset control and instrumentation is an integral part of a power facility. How does the correct technology help to increase profitability and ensure local standards are met?

The correct technology can increase profitability by providing accurate information. It is very difficult to make decisions about power outputs, maintenance cycles, and fuel usage without correct information. Profitability of any company is based on how well they utilize their assets, and by using the correct technology to get information about their assets, a company is almost guaranteed to be more profitable.

Information can also help ensure local standards are met by providing accurate baselines and historical information that can be compared to the standards.

Gas is growing in Asia at a massive rate and has been forecast to overtake diesel in the coming years.

What types of technology do you have to ensure that not only new facilities but also aging facilities can meet their generation responsibilities?

Recently ComAp has released InteliSys Gas, a controller developed specifically for the gas power generation market. The InteliSys Gas is an industrial grade controller for gas engine generator sets in power

18 | POWER INSIDER VOLUME 7 ISSUE 4

generation applications. The InteliSys Gas controls, monitors and protects the generator set according defined setpoints and comes pre-installed with predefined adjustable functions tailored to gas engine specific needs. The InteliSys Gas also is within compliance to grid code standards for low and medium voltage distribution networks to protect the grid and your generator set from faulty electrical conditions in the system.

The InteliSys Gas is easily fitted to an existing power generator, (old or new) and features ‘read-in’ of all relevant mechanical and electrical signals via sensors, voltage and current transformers to control the entire generator set.

What projects are you most proud of in Asia?

The most prestigious project, even from the global perspective, is without doubt the F1 night race event here in Singapore. ComAp provides complete synchronizing control system for generators powering special lighting rigs which are the critical part of this night race. The part of control system is also special monitoring system which provides 24hrs generators status monitoring, continuous evaluation of actual conditions and alarm management allowing immediate troubleshooting. It is very helpful for service and technical support personnel as they know in any time of the day if generators are running properly or if there is any issue which needs to be solved immediately. Such project also requires extensive support. Our work starts two months before the event when our engineers work closely with the generator´s manufacturer and help them with design, installation, configuration and commissioning of the control and monitoring system.

During the race our engineers are present at the venue and provide immediate technical support in case any unexpected situation occurs.

ComAp has been supplier of control and monitoring system for this event for last 4 years which I believe proves high level of quality and reliability of our products and professionalism of services which we provide.

Asia is growing faster than pretty much any other region in the world.

What countries in particular are you focussing on and why?

Our office in Singapore is responsible for the whole South East Asia territory which includes around 12 countries. All these countries represent interesting business opportunities even not only in power generation industry. We can see very good potential also for our products for marine and industrial applications. There is a lot of shipyards in Philippines, Indonesia or Vietnam whom we can offer our marine certified solutions for ship power and alarm management system.

Hybrid solutions are also becoming very success for ComAp. Hybrid systems feature a combination of diesel or gas generators with renewable source of energy which can be PV, wind or hydro. There is a growing trend towards these installations we can see globally and South East Asia is not an exception. ComAp developed a control solution with specific functions for hybrid applications. This solution integrates the generator and renewable system and provides complete control and monitoring of the whole hybrid installation.

Specific functions, which I mentioned before, allows maximum penetration of the renewable source of energy but also allows for a possible sudden drop in power supply from the PV or Wind source in order to secure necessary power for the actual load. It helps to optimize running time of generators and brings significant savings from operation of the whole site. I can see an important market for these solutions in Philippines or Maldives where are lot of holiday resorts on islands with no electrification.

These resorts are powered from conventional diesel generators and this is exactly area where hybrid solution brings savings in operation costs.

What are the biggest challenges you face in the Asian market and could you explain what you are doing to overcome them?

The Asian market is very specific and includes countries with very diverse cultures and environment.

You have to use completely different approach to customers in Japan and in the Philippines. To be successful we need to bring

business strategies which are adapted to specific conditions of a particular country or market. And it includes of course, not only specific approach to customer or using different negotiation tools but also in many cases adaption of products or solutions for specific market needs. With our R&D team we can flexibly react on various market requirements and provide solutions tailored to customers´ needs. It is one of the factors which brings us a significant competitive advantage.

For Asian customers, when deciding about a business partner, it is also very important support and services which must go hand in hand with the product. Through our extensive distribution network in Asia we can provide professional technical and commercial support in any country. We are proud of fact that our customers can get the same level of support regardless of if it is provided by ComAp directly or by our local distributor. We are facing to strong competition from Chinese manufacturers, and these advantages help us to stay at the top of manufacturers of control systems for power generation, marine and industrial applications.

What has been the most important development in generator monitoring in the last few years and why?

I think communication via mobile phone, tablets, and the internet has become one of the most important developments in generator monitoring. Being able to monitor and control generators via the internet, receive text messages about fuel levels, or even if the generator moves outside a predefined location is undeniably beneficial for generator users. GPS tracking is also an important development, especially within the rental market – being able to know exactly where your generator is at all times is essential for effective fleet management.

The ability to tailor your products to a specific customer application is very important and many companies do not have this flexibility. Can you give our readers an example of how you have tailored your solution to meet a

customer requirement and the benefits they received on receiving your solution?

A good example of this was when ComAp upgraded the control system for a power station on Bora Bora Island in French Polynesia.

Two of the sets were brand new, still under warranty, and had a fully integrated control system which could not be removed or altered. To accommodate this unusual situation, ComAp installed an InteliSys control system operating in GeCon mode. AC measurements were derived at the existing main switchboard and all other parameters are obtained via a MODBUS interface to the Wartsila control system. This includes commands for pre-start, start, stop, speed control and voltage control. Then after an initial pre-start command, the GeCon waits until a ready to start status is received. After this, an engine start command is sent to the Wartsila. The entire engine startup, stabilisation, synchronising and CB control is performed by the Wartsila. Once online, the GeCon will bias the speed and voltage to maintain power levels according to the operational mode (load sharing or baseload).

This sounds very complicated, but was relatively easy to achieve because of the flexibility of the ComAp controller, but also the willingness of ComAp staff to be flexible in their thinking, and really understand the needs of our customers.

I would like to thank you for your time today, it’s been a great experience and an interview I’m sure our readers will love. Before we sign off here, can you summarise why any company would benefit from working with you?

I think the wealth of experience that ComAp has, along with the flexibility of our products, and the local support provided by our network of distributors around the world is a huge benefit to our customers. At ComAp we are willing to work with our customers to make sure that they aren’t just using a ComAp product, but to ensure that they are provided with best ComAp solution.

CHINA’S AIR POLL

COSTING MORE L Despite a strong push to improve air quality, China’s citizens will suffer over 2 million premature deaths annually due to pollution for decades to come, according to a recent report. with wood, coal and biomass fuels.

One-third of the deaths are occurring in China, including 1 million from outdoor pollutants and 1.2 million indoors, the IEA said in its 266-page study, which also profiled other countries and regions including India, Africa and the United States.

Bad air has shortened the average life expectancy in China by over two years, it said.

The huge toll is continuing despite major environmental efforts and an antismog action plan announced by China’s government in 2013.

T

he study released last month by the Paris-based International Energy Agency (IEA) follows World Health Organization (WHO) estimates that air pollution causes at least 6.5 million premature deaths a year worldwide.

In 2014, the WHO put the death toll from air pollution for 2012 at 7 million, calling it the world’s largest single environmental health risk.

The new IEA estimate includes 3 million

20 | POWER INSIDER VOLUME 7 ISSUE 4

fatalities due to outdoor air pollution and 3.5 million more from poor indoor air quality, largely from cooking and heating

Over the past decade, the country’s total sulfur dioxide (SO2) emissions fell by one-third thanks to power sector controls, while releases of the most dangerous fine particles, known as PM2.5, dropped 19 percent, the report said.

China also leads the world in renewable energy investment, pursuing its goal of doubling the low-carbon share of its energy mix to 20 percent by 2030, said the IEA. But all the progress in China has made only a dent in its pollution problems, since coal continues to be its main source of power.

LUTION

LIVES!

A six-fold surge in car ownership rates over the past decade has helped to drive up smog-forming nitrogen oxide (NOx) emissions by one-third.

New policies scenario One striking conclusion of the study is that even if China follows through on all of its current air quality policies and plans through 2040, the annual number of air pollution fatalities will rise rather than fall.

Under its new policies scenario for China, the IEA projected that premature deaths from outdoor air pollution will increase to 1.5 million a year from 1 million in 2015, largely because the country’s ageing population will be more vulnerable to health threats, particularly in cities.

At the end of 2015, China had 222 million people aged 60 or older, representing 16.1 percent of the population, the Ministry of Civil Affairs reported last week.

By 2050, one in three registered residents in Beijing will be over 60, up from 23.4 percent last year, a Civil Affairs Bureau official said.

Older citizens are likely to suffer disproportionately from vehicle exhaust in urban areas.

Despite the health effects of pollution, the average life span in Beijing has been growing, according to official figures.

Life expectancy in the capital rose slightly in 2015 to 81.95 years, the Beijing Municipal Commission of Health and Family Planning said in February.

The top fatal diseases were listed as cancer, heart diseases and cerebral vascular diseases, the official Xinhua news agency reported.

The IEA study noted that transport is not the biggest source of China’s air pollution, but it stressed that action in this sector is critically important because of the high level of human exposure to transport-related pollutants, in particular PM2.5.

The IEA expects a 40-percent decline in China’s overall PM2.5 emissions by 2040 due to tougher emissions controls on power plants and industry along with cleaner fuels. But it estimated that more than 80 percent of passenger car and nearly 60 percent of road freight activity now takes place in cities.

They just keep building more infrastructure to put more vehicles on the road, said Mikkal Herberg, research director for Asian energy security at the Seattle-based National Bureau of Asian Research.

Even as they improve fuel quality and mileage requirements for new vehicles,

the scale effect of this volume of more vehicles on the road is overwhelming the improvement in standards, he said.

Transport emissions may prove tougher to reduce than emissions from coal, which is expected to cover less than half of China’s total energy needs by 2040.

I think it’s easier to make progress on the coal side than it will be on the transportation side because there’s a less effective substitution opportunity, said Herberg, adding that large-scale electrification of transport is still a long way off.

New fuel standards are expected to cut NOx emissions from passenger cars by 45 percent, the study said.

So far, China’s megacities have tried to control the exhaust problem by slowing the growth of new registrations. Beijing’s current five-year plan would limit the number of cars on the road to 6 million by the end of next year, rising to 6.3 million in 2020, state-run ECNS news said.

The IEA said that efforts to curb indoor air pollution will succeed in reducing premature deaths to an annual rate of

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970,000 in 2040 with demographic shifts, safer stoves and cleaner fuels, but 170 million people will still be using biomass for cooking and heat.

Despite the improvements, the bottom line is that reductions in indoor pollution deaths will not be enough to offset increases in outdoor pollution fatalities with policies that have been laid out so far.

By 2040, the annual rate of premature deaths in China will rise from 2.2 million now to 2.5 million, the report said.

The IEA study, which is part of its forthcoming World Energy Outlook, urges a greater environmental commitment by all countries, arguing that a 7-percent increase in total energy investment by 2040 could lower premature deaths by 3.3 million, or some 50 percent.

Clean air scenario The clean air scenario includes a broadly worded combination of more ambitious and accelerated air quality goals, new strategies for the energy sector, more effective monitoring and tougher enforcement.

22 | POWER INSIDER VOLUME 7 ISSUE 4

Strategies would seek to boost efficiency and provide energy without combustion of fuels.

outdoor pollution to 1 million annually while reducing indoor pollution deaths to 560,000 a year.

Among the specifics to reduce deaths from indoor air pollution, countries would ensure access to liquefied petroleum gas (LPG) as a substitute for wood, coal and biomass fuels.

It is unclear whether the IEA’s call for greater investment will be met with an unexpected wave of international political will, but it may help to spur China’s air quality campaign.

The general approach of the IEA’s policy recommendation stops short of setting specific national targets.

Herberg argued that the visible effects of air pollution are more likely to push the Communist Party and the government to take action, compared with the less tangible results of climate change.

There is no uniform policy prescription for air quality that is applicable to all countries and regions, it said.

But the agency argued that major life-saving advances are achievable at a worldwide cost of an additional U.S. $2.3 trillion (15.3 trillion yuan) in advanced pollution control technologies, mostly for vehicles, and another U.S. $2.5 trillion (16.6 trillion yuan) for faster energy sector transformation.

While the study provides no breakdown of the costs for China, it projects that the combination of new clean air policies would limit premature deaths from

That is what’s so dangerous about air pollution. They can’t hide it, he said.

They can arrest people, they can put them in prison, they can make a lot of things go away. But that’s one thing they can’t, Herberg said.

On Sunday, China’s Ministry of Environmental Protection (MEP) issued an upbeat assessment of progress in fighting air pollution in 338 monitored cities.

Beijing, Tianjin and 11 main cities in industrialized Hebei province recorded air quality rated as good in 57.4 percent of the first half of this year, an improvement of 11 percentage points from the yearearlier period, Xinhua said.

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Can you tell us about your company and how you came to be responsible for the region.

A1) Global Marine Systems Limited is a leading provider of engineering and underwater services, responding to the subsea cable installation, maintenance and burial requirements of customers around the world. We have a long legacy working in deep and shallow water projects and operating worldwide from our headquarters in Chelmsford, UK and Singapore. A comprehensive end-to-end solution is offered for multiple offshore industries including oil and gas, telecoms, offshore renewables, power and deep sea research.

MIKKEL GLEERUP D EC SA ES C MME C A A A MA E S S EMS M ED Global Marine Systems Limited, is a leading provider of engineering and underwater services, responding to the subsea cable installation, maintenance and burial requirements of its customers around the world.

With a fleet of vessels and specialised subsea trenching and burial equipment, the company has a 165-year legacy in deep and shallow water cable operations. Global Marine’s primary markets are renewable energy & power, telecommunications, oil & gas, and deep sea research.

Global Marine holds the RoSPA Order of Distinction in recognition of 17 consecutive years of outstanding occupational health and safety results.

Global Marine has two longstanding joint ventures in China, S.B. Submarine Systems and Huawei Marine Networks, and in February 2016 acquired a majority interest in offshore renewables specialist CWind.

24 | POWER INSIDER VOLUME 7 ISSUE 4

I was previously employed by Siemens Wind Power, based in Shanghai, but in 2014, Global Marine’s joint venture company in China, SBSS (SB Submarine Systems) required a managing director, a role which I fulfilled for two years before being given the opportunity to head-up the sales and commercial team operating out of the UK. As a result, since May 2016 I have been Global Marine’s Director, Sales & Commercial, and although I have a global outreach, Asia is one of my prime areas of responsibility.

What do you feel are the current challenges in ubmarine cable in Asia?

A2) Although the telecoms industry is very strong in Asia at present, there are undeniably a lot of contractors prepared to do the work. For this reason, prices have been driven down, which makes the submarine cable market a more challenging business environment for everyone. At Global Marine, throughout our 165-year legacy we have remained focussed on continued improvement to ensure we stay highly competitive and maintain our leading position in the marketplace.

Of all the world regions, it’s fair to say that Asia currently has the highest rates of growth and activity level in the telecoms arena – there’s a lot of cable infrastructure development at present. Offshore wind is also gaining momentum in places like China, Korea and Japan, which means there are numerous power cable projects arising in Asia. Overall, Asia is a healthy business area for Global Marine, but increasing competition is for sure the

biggest challenge. o in light of this what are the primary risks involved with subsea cable installation in Asia?

A3) To give an example of the main challenges, there are strict permitting rules in many Asian countries.

In Indonesia, for example, you get a six month time limit to complete the work. If you don’t finish within this time period, it’s your risk.

Fortunately, at Global Marine we have an experienced and knowledgeable permitting team that is responsible for obtaining and assisting with any consents, licences, permits or other permissions. Such permits are subject to an array of legislative requirements, particular to each country, which can be complicated by international, national and local legislation.

We hold an extensive live database of the various requirements of each country - meaning that each country’s or territory’s requirements can be reviewed quickly, and the necessary contacts made. In more geographically remote or dangerous areas of the world, the experience of a provider such as Global Marine is invaluable, and can ensure that delays are kept to a minimum and risks mitigated as far as possible.

Another major risk specific to the Asia-Pacific region is the weather, in particular typhoon season between May and October. nexploded rdnance is a challenge faced in urope, is this a problem faced in Asia, if so what experience do you have?

A4) Unexploded ordnance can be a challenge in all parts of the world.

Conflicts such as World War II were also prevalent in Asian waters so it is definitely something which needs to be factored in for installation and burial projects. For all projects, a bespoke project implementation plan including all critical path items is created, based on the provision of cable route services, including desk top studies, route surveys, environmental assessment reports and route engineering.

In short, we take every precaution to ensure we do not encounter issues such as unexploded ordnance. Where it is unavoidable, professional disposal teams would have to be engaged.

What projects are you most proud of in Asia and why?

A5) There are many projects in Asia of which we are proud, but in my short time with Global Marine there are a couple that spring to mind. In

early 2016 we secured a significant contract to install fibre optic submarine cables as part of the SEA ME WE 5 (South East Asia Middle East Western Europe) project. Likewise, another major recent project is the landmark 1,300km MCT (Malaysia Cambodia Thailand) subsea telecommunications cable project.

Looking further back, a key milestone in Global Marine’s track record was during the Pulau-Ketam power cable installation, a project completed by the company’s shallow water barge, the Networker and burial jetting tool, the Injector. During the installation, linking the small island back to the Malaysian mainland, the company achieved the deepest burial of a cable at 13.8m below the seabed. We’re very proud of all our engineering feats and are pleased to continue to set the bar high for project delivery in the industry and Asian-Pacific region in particular. ou have been in the market for many years, what distinguishes you

from other suppliers in the region?

A6) Well, not only do we have a facility in Singapore, but we have two joint venture companies in China, one providing systems and another that effectively mirrors our operation in the UK. We also have strong customer interfaces in Asia. For instance, we have been active in the Chinese market for more than 20 years and have relationships with the biggest state entities there.

Thanks to this experience, we feel at home in Asia. It seems that there is always a senior member of the Global Marine team in Asia at any one time. I am due to go next week, in fact. rom a development perspective what are your remaining plans for Asia this year and into ?

A7) We are active in all business segments within Asia, and bidding in all areas. Demand for energy in this region is forecast to surge over the coming decades, with the International Energy Agency predicting a demand increase of 80% through to 2040 in Southeast Asia alone, not to mention rapid growth in China.

Sure enough, oil and gas is slow worldwide right now, but markets are cyclical and we believe this will change. In the meantime, telecoms and offshore wind continue to represent the biggest areas of opportunity in the Asian submarine cable market, which is where we will focus our attention.

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INDONESIA’S GEOTHERMAL CHALLENGE

C

olumns of steam shoot from the ground at an Indonesian power plant sitting in the shadow of an active volcano, as energy is tapped from the red-hot underbelly of the archipelago.

Pipes zigzag up rugged mountainsides covered in tea plantations, carrying steam from the Earth’s core to power enormous, electricity-generating turbines at the Wayang Windu facility on Java island.

Indonesia, a seismically active island chain studded with scores of volcanoes, holds an estimated 40 percent of the world’s geothermal energy reserves,

26 | POWER INSIDER VOLUME 7 ISSUE 4

but has long lagged behind in its use of the renewable power source.

Now the government is pushing to expand the sector five-fold in the next decade, although the challenges are huge in a country where the burden of red tape remains onerous, big projects are often delayed and targets missed.

The potential is tremendous, said Rully Wirawan, field manager at Wayang Windu. The current government is trying to tackle the challenges so I believe the development of the sector will be better in future.

Geothermal, a clean energy source, which releases negligible amounts of

greenhouse gases, unlike burning dirty fossil fuels, is mostly found in seismically active areas around tectonic plate boundaries.

Indonesia is home to around 130 volcanoes and 40 percent of the world’s geothermal energy potential.

The Earth’s heat emanating through the fault lines warms underground reservoirs, and the resulting steam can be channeled to geothermal energy plants.

The majority of Indonesia’s power is generated from its abundant reserves of coal and oil.

It currently has installed capacity to produce about 1,400 megawatts of

electricity from geothermal, enough to provide power to just 1.4 million households in the country off 255 million.

That is less than five percent of geothermal estimated potential and behind the world’s two leading producers of the energy source, the United States and the Philippines.

But the government is aiming to increase Indonesia’s generating capacity to around 7,200 megawatts by 2025, as part of a broader plan to boost the renewables sector, which would likely make it the world’s top producer of the power source.

A major part of the drive is a law passed two years ago that means geothermal exploration is no longer considered mining activity, as it was previously.

The old definition had held up the industry, as mining cannot be carried out in the country’s vast tracts of protected forests, believed to contain about two-thirds of Indonesia’s geothermal reserves.

The government is also seeking to sweeten local administrations — which had sometimes resisted the construction of the steam-belching facilities — by offering them up to one percent of revenue from any geothermal plant in

their area.

Abadi Poernomo, chief of the Indonesian Geothermal Association, which represents companies involved in the sector, is upbeat about future prospects: A lot of investors from abroad are coming to Indonesia with the intent to develop geothermal.

Still, the challenges are enormous.

While achieving the 2025 target may be possible, it will be extremely difficult, said Daniel Wicaksana, an energy expert at consultancy Frost and Sullivan Indonesia.

One of the biggest problems is the high

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exploration costs needed at the outset, as checking for potential geothermal reserves is a complex, time-consuming business, that is not always successful.

offered by the state-run power company to buy electricity from a geothermal facility, which they claim usually doesn’t cover the large initial outlay.

Building a geothermal plant costs the equivalent of $4 to $5 million dollars per megawatt, compared to $1.5 to $2 million for a coal-fired power station, according to the association.

To top it all off, Indonesia’s complicated bureaucracy puts many off — 29 permits are required from different government agencies and ministries for a geothermal plant, and timeconsuming negotiations with powerful local administrations can also hamper

Investors have also complained about what they say is the relatively low price

progress.

The level of complexity to complete the necessary paperwork, at the local level especially, also adds to the slow development of geothermal, said Wicaksana.

Green groups have also questioned authorities’ commitment to geothermal in the near term — a plan by the government to ramp up electricity-producing capacity dramatically by 2019 seems more focused on building coal-fired power stations than expanding the use of renewable energy sources.

Wayang Windu, which is jointly managed by independent company Star Energy and state-owned energy giant Pertamina and takes its names from the active volcano near the plant, illustrates some of the challenges.

Exploration first began at the site in 1985 but it was not until 15 years later that the plant began producing electricity commercially, while work on a new unit to boost power generation has been delayed due to negotiations over cost.

Even officials admit achieving the government geothermal target will be tough.

Ego Syahrial, the head of the government’s geology agency, which assesses geothermal energy reserves conceded: The progress is not very encouraging to be honest.

28 | POWER INSIDER VOLUME 7 ISSUE 4

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Welcome to PiMagazine Asia. As Gas Product Manager of HIM I A, can you tell us what has been the evolution of the Gas power range in the company and in what direction is it going?

The HIMOINSA Gas range was introduced in the market in the beginning of 2012 and we manufacture gas generators from 10 kW to 2.500 kW COP Power. Our growth has been constant and secure by improving our product and training and supporting our dealers and sales teams worldwide. Our Gas Range is now consolidated and we are working on the development of new products for niche markets, like the new gas range specifically designed for the rental market or the innovative AS4012 LPG lighting tower, which is the first one in the market fueled by LPG gas.

Manuel AguileraHIMOINSA as ro ct Manager Mr. Aguilera holds a Degree in Industrial Engineering and was awarded with honors by the Polytechnic University of Cartagena for his work on Microgeneration with Natural Gas as a Sustainable Energy Alternative He has extensive experience in Cogeneration projects with diesel and gas engines and as an Engineer in the Solar Energy sector and the HVAC sector (Heating, Ventilation and Air Conditioning).

He started his work in HIMOINSA in 2011 as Cogeneration Sales Manager for the Spanish market.

One year later he was promoted as Gas Product Manager. Among his outstanding achievements in the company are the development from scratch of the HIMOINSA Gas Range and the commercial network for the distribution of gas generators and lighting towers internationally.

30 | POWER INSIDER VOLUME 7 ISSUE 4

The new PG ighting Tower was a unique launch this year as it is the first one in the world with this characteristics. To what sectors is this lighting tower recommended and what are its advantages when compared to diesel lighting towers?

This LPG lighting tower is a good solution for the Oil and Gas applications, since the gas used in oils wells as standby supply (propane) can be used to power the towerâ&#x20AC;&#x2122;s engine that lights up the working area. This tower can illuminate an area of 32.000 square meters and guarantees 24h running time, meaning 3 nights of con-

tinuous work.

The AS4012 is also suitable for rental companies who provide the service for events where low noise and low emissions are appreciated, and for construction companies who suffer from fuel theft.

The main advantage of this new tower is that it provides a much lower OPEX: longer maintenance intervals than the diesel versions and lower fuel price in many countries, not to mention the reduction of CO, CO2 and particulate emissions, like gas generator sets.

What are the advantages of Gaspowered generators and how do they compare to diesel generators in terms of P and efficiency? What added value does HIM I A provide in their Gas generators? espite a lower electrical efficiency than their diesel brothers, gas gensets have a lower OPEX thanks to cheap fuel and longer maintenance intervals. They also have lower emissions, less noise, no black smoke, longer engine life and they are a much better choice for cold weather environments, where diesel can freeze easily.

Our gas range includes only engines that are capable of continuous duty. They include a full gas train with all the security elements from the smallest to the biggest genset. We cover almost all the gaseous fuels: NG, LPG, Biogas, Syngas, CSG, wellhead gas, etc. which allow us to be ready for any need that our clients may have.

In what sectors are gas generators most effective and what are the

these markets?

It is clear that due to low emissions requirements, natural gas generators will be the trend for the coming years.

The truth is that the low oil price is not helping to increase the market share, as diesel has a very competitive price at the moment. Fortunately, HIMOINSA has a strong distribution network in APAC that allow us to collect information of every market through our distributors. For example, the needs of the Chinese market have nothing to do with the needs of the Australian market or the Indonesian market, and this is where our unique expertise and capabilities come into play, as we are highly flexible and able to adapt our product to the specific needs of our clients. We have recently designed gensets with maintenance intervals of 10.000 hours for the Australian market and 400kVA gensets that are operating in important plants of oil and gas in China.

A new ental ange for gas generators has been recently developed by HIM I A. What new features has this new range to offer to the market?

main challenges for the Gas market in APAC? The main markets for gas generators in APAC are Bangladesh, Myanmar, Indonesia, Thailand and Australia. The demand for gas generators comes mainly from big power generation plants and oil and gas applications.

The main challenges that we are facing nowadays in the gas market is the lack of legislation in the majority of the countries to limit the emissions, a low price in oil and strong competition from Chinese OEMs HIM I A also has a factory in China, in the city of Changzhou. How does this affect the competition in the country?

The product that we make in China and any other of our factories around the world follow the standard quality levels that we have in Europe. All our factories follow the design from Spain and also the same production procedures, which ensures that the quality of the product is not jeopardized in any case.

The product that we deliver from China meets the highest quality standards and that together with our excellent sales team and

distributors is the reason behind our big growth in this country. ecent studies show that Gas generator sets are increasingly being the norm in Asia. The Paris Climate Talks have pressured all countries to reduce emissions and countries like Thailand and Indonesia are already demanding clean power and low emissions for power generation projects. o you think this trend will extend to other APAC countries? How does HIM I A meet the needs of

We have designed this new solution with versatility as our main goal. This range has LPG tanks inside the chassis for 28 to 45 hours autonomy depending on the model. The integrated tanks are PG certified for vehicles, making them a great option for the rental sector, where there is demand for mobile machines that are easy to transport. You can place them on a trailer and refill them in the petrol station or on site by truck. In addition, these generators allow to use them either with internal or external LPG tank or Natural Gas from the pipeline. They offer 25, 40 and 60 kVA of continuous power with a rental canopy that provides the excellent soundproofing uality that all HIMOINSA generators have, which is an excellent advantage for densely populated areas where noise pollution needs to be controlled. As an option, we also offer dual-frequency capability for 50 and 60 Hz. Asia-Pacific is a very important market for HIM I A. What are your plans for the future in this region?

APAC will be 50% of the gas market in less than 10 years. Of course we are focused also in this area for gas gensets and lighting towers and we are sure the growth is going to be sustainably strong. We will continue to provide our sales force with the right tools and get the support of our distribution network to increase our presence in the market and developing new solutions for specific needs.

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INDONESIA CAN SECURE ITS ENERGY FUTURE THROUGH

RENEWABLE MICROGRID

I

ndonesia has set an ambitious target of achieving 99.7% electrification by 2025 in its recently unveiled Electricity Supply Business Plan for 2016-2025, Rencana Umum Penyediaan Tenaga Listrik (RUPTL). This would require 80.5 GW of new power plants to be constructed by 2025. While fossil fuels such as coal and gas will still account for more than 79% of the fuel mix, renewables such as geothermal, min-hydro and solar PV are expected to increase their share to nearly 20%.

While the economic development in West and more recently in China was powered through large fossil plants, emerging

source. Microgrid can integrate a variety of locally available clean energy sources such as solar, micro hydro, biomass, biogas, wind, and so on.

It can also provide stability of supply when combined with battery storage and advanced automation & controls for demand-supply balancing. Microgrid is increasingly becoming affordable due to reduction of its component costs and also when one accounts for the economic losses because of poor quality power supply.

countries such as Indonesia have the opportunity to leapfrog using new energy technologies such as microgrids, and not overtly rely on risky investments in centralized power generation projects.

Indonesia’s 17,508 islands (of which slightly more than 900 are permanently inhabited) not only present a huge challenge, but also a unique opportunity for energy planners. Indonesian power grid has eight interconnected power networks spanning across populated regions such as Java, Madura, Bali, and Sumatra and 600 isolated grids operated by PLN. The network is besieged by generation capacity addition delays and severe transmission bottlenecks, thus leading to power outages.

Microgrid, which is a self-sufficient localized grouping of electricity load and generation source, can help to provide stable power supply both in islanded and grid connected situations. PLN is looking at converting many of the islands using only diesel generators to include solar photo voltaic and thus making it a hybrid

Panjang, Pulau Balang Lompo, Pulau Tankake, and Pulau Kelang with solar PV, wind, and diesel hybrids. However, for the country to reach its goal of 99.7% electrification, such installations should increase multi-fold within the next decade.

The following are some of the critical success factors and enablers for microgrids in Indonesia: Decentralization of Decision Making: The local PLN Regional Unit office & local government administrative office should be involved in the decision making of power generation for the said administrative region, with focus on energy security and independence.

Localization: One of the key objectives of regional power supply plans should include local skills development and utilization of locally available resources for building and operating such facilities.

Foreign Investment: Projects less than 10 MW should be opened to foreign equity investments. Participation of local

32 | POWER INSIDER VOLUME 7 ISSUE 4

Indonesia has several microgrid installations such as those in Nusa Penida, Baron Techno Park, Morotai Island, Pulau

government body and regional PLN as a shareholder would ensure their involvement and commitment of the region toward successful and timely project execution.

Standardized Packages: System vendors and design & integration companies should develop several standardized microgrid packages rather than customize those for every single project. This will help in significant cost reduction for both hardware and services.

Modular Approach: Microgrid projects can start small to address a particular community’s needs or specific loads and then be scaled up as more funding is available or the project becomes selfsustaining.

Industrial Microgrids: Providing incentives for industries and mining facilities to develop captive renewable microgrid systems using their own sources of funding will ease the pressure on PLN’s grid and thus help cater to other customers.

Tourism Resorts: Tourist resorts and high end developments are low hanging fruits for microgrid developments because of relative affordability to invest and also obtain better value through green branding.

New Business Models: The Indonesian Government, regulator, and PLN should create conducive business climate for private investors to explore new business models such as microgrid as a service.

In this model, developers will build microgrids and sell electricity directly to a single large or numerous small customers.

Indonesia’s estimated potential for renewable energy includes more than 1,000 MW of micro/mini hydro, 32,654 MW of biomass apart from significant quantum of solar PV and wind power, all of which are spread across the archipelago. This creates the perfect resource condition for microgrid market development.

The rapidly growing demand for electricity cannot be satisfied only by PLN or a few large IPPs. With innovative approaches to technology, financing, equipment sourcing, construction, and revenue models, Indonesia can secure its energy future using microgrids. Such projects can also become a catalyst for job creation in far flung locations.

Feature - Standby Power Asia

Mr. Mohamad Selim resi ent Director o Aetra a o t t e compan s acti ities in a arta PT Aetra Air Jakarta is one of Indonesia’s top rated water suppliers, and is responsible for managing, operating and maintaining the water supply in parts of Jakarta.

Aetra operational area, east of the river Ciliwung, covers most of North Jakarta, parts of Central Jakarta and East Jakarta. Aetra is focused on improving the lives of residents through improved water infrastructure, investing to optimize, expand and develop the water service. As a result, the number of subscribers increased to 380,000 by 2008, and the water supply service coverage ratio increased from 57.4% in 1998 to 65.2% in 2008. This means that an estimated 2.9 million people in Aetra’s operational area have gained access to clean water. PI Magazine Asia spoke to Mr. Mohamad Selim, the President Director of Aetra, to find out about Aetra’s successes and challenges.

34 | POWER INSIDER VOLUME 7 ISSUE 4

What challenges do Aetra have to overcome to provide an adequate water supply in akarta?

tors.

There are several factors that create challenges for Aetra, such the reliability of the raw water supply. Aetra’s raw water is supplied through the open West Tarum Canal from Jatiluhur Dam. Along this route, the quality of raw water deteriorates, getting worse downstream. The turbidity of the raw water can reach 20,000 NTU, whilst pollutants are also dumped in the canal, such as heavy metal and oil. In some cases, the treatment technology can’t separate the pollutants from the water, causing a pause in production.

This increases production costs, as more chemicals are required to treat the water.

To ensure that raw water requirement will be fulfilled, Aetra has developed a close relationship with PJT II. Aetra is involved in some of PJT II’s work to minimize disruption in the raw water supply. Aetra also developed initiatives in water treatment plants (WTP) to ensure reliability and quality of clean water supply, such as refurbishing mechanical and electrical equipment, building production monitoring systems, and installing automation in dosing processes. In the last three years, investment in WTP reached 80 billion IDR. In line with ensuring continuity of supply, Aetra plans to build a new reservoir with a capacity of 20,000m3.

Aetra has been experiencing a shortfall in cash, as a dual tariff scheme with PAM Jaya caused water tariffs to be frozen in 2007.

Aetra recently implemented the Master Agreement/Master Plan, which involved a rebalancing co-operation agreement between Aetra and PAM Jaya, which was agreed in several principles: there would be no initiative to increase water tariffs, no indexation for water charges and shortfall elimination by year 2016, and no additional shortfall after 2017.

In order to increase the service to customer, reduce levels of NRW and increase coverage, Aetra has invested in improving the network.

For the last three years, investment in the network has reached 300 billion IDR. Aetra also conducts a regular event on health and environmental issues in Jakarta

Aetra also faces challenges in nonrevenued water (NRW), collection of bills and service coverage. The Master Plan has implemented measures to reduce NRW water through a number of initiatives, such as pressure management and asset rehabilitation. Aetra also boasts of a 92% current month collection, which helps to reduce the cost of operations. The Master Agreement has also helped Aetra with the service coverage, as the fixed business scheme has to maintain a 40:60 ratio between subsidized customers and nonsubsidized customers in order to balance revenues, customers numbers and cash return.

Other challenges for Aetra include the development of separate infrastructure: Jakarta as the capital city of Indonesia develops mass infrastructure, which is not well integrated. Aetra’s pipe network is often relocated or damaged due to no coordination among the opera-

What is Aetra doing to improve access to clean water in akarta?

related to water consumption from shallow wells. Some inhabitants use shallow wells on a daily basis, without realising they are often contaminated with e-coli bacteria.

Aetra has plans for a water treatment plant in Buaran and Pulo Gadung, with a total capacity of 9,000 LPS. Aetra is also working on the pipe network, looking at 6,000 km of secondary and tertiary pipes.

We also have a number of booster pump projects in the pipeline:

developed a water balance approach for monitoring each area. Based on this water balance, Aetra develops specific action plans for each area, both for the physical and commercial sides. For the physical detection of leaks and repair, Aetra takes the following measures:

Booster pump Sungai Bambu: 225 LPS,

Active leak detection and repair

Illegal settlement areas in Jakarta are served through the master meter, and water kiosks were built to serve areas throughout Aetra’s network. The local community manages both schemes.

Inline Booster pump Tugu 700 LPS,

Pipe Rehabilitation

Booster pump Sumur Batu 500 LPS,

Action for Commercial

Inline Booster pump Halim 1,000 LPS,

Audit Meter Reading

Booster pump Pasar Rebo 600 LPS,

Meter Replacement Program

What technology does Aetra employ at the water treatment plants of Indonesia?

Inline Booster pump Kiwi 250 LPS.

Illegal Sweeping

What is Aetra’s process for identifying and dealing with leaks and W? Is water loss a big issue for Aetra and its customers?

What specific techniques has Aetra implemented to ensure success and longevity of your water networks?

Aetra has also implemented a master meter and water kiosk system to serve the community.

Aetra employs two types of technology at the water treatment plants: Pulsator: coagulation, flocculation and sedimentation in one basin/chamber is used at the Buaran WTP with 5000 litres per second (LPS) capacity.

Conventional: coagulation, flocculation and sedimentation in different chamber is used at the Pulogadung WTP with 4000 LPS capacity. oes Aetra have any water infrastructure projects in the pipeline, such as water treatment facilities or desalination plants?

Water loss is big issue for Aetra. NRW reduction is needed to increase customer satisfaction and to expand the services.

NRW reduction is key to fulfilling demand, since reliability of raw water and the WTP capacity is at maximum capacity. Aetra has had great success in reducing NRW, bringing the figure down from 57% in 2008 to 43% in 2013.

Aetra has a number of processes to indentify and deal with leaks. There is a built in monitoring system, and Aetra has

Aetra has developed a standard design for the network, and developed that network on an aerial basis. Aetra has also implemented a standard installation of the network, engaging the professional contractor to ensure high quality of workmanship, making sure the quality of the materials meets specification, and using asset management system to evaluate and recommend timelines for pipe replacement. Routine maintenance for surface pipes and pipe bridges also assists in Aetra’s efforts to maintain top quality networks.

Can you share with us some details about the Workshop Meter project?

What made Aetra decide to invest in this laboratory? What results have you seen?

The purpose of this investment was to recommend appropriate types of water meter for specific environments e.g. quality of water, pipe connection type, and level of pressure. The Workshop Meter Project also ensures that water metering is performed well, has calibrated water meters to indicate inaccuracies and fraud, and has helped to conduct cost savings through meter reconditioning. inally, can you indicate specific future plans you are making to further enhance akarta’s clean water supply?

We are implementing the Master Agreement to address stakeholder concerns on the shortfall and cash shortage. Additionally, we are ensuring the reliability of supply by building a clean water reservoir with a capacity of 40,000m3, co-operating with the raw water supplier to rehabilitate the canal by building a siphon, and aim to replace 280 km of pipe network and 425,000 water meters, infill 70 km of pipe network to enhance the coverage, and reduce the NRW level by 25%, all of which Aetra wishes to complete by 2022.

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JUMP STARTING INDONESIAN BIO T

he electricity demand is expected to grow in the world’s 16th largest economy and the fourth most populated country, Indonesia at an average of 10.1% per annum till 2031. In December 2012, Indonesia had a total installed capacity of 32,951 MW. As mentioned in the Draft General Plan of Electricity (RUKN) 2012-2031, peak load power demand is expected to be 168 GW in 2030, which is 5.09 times the total installed capacity in December 2012. Further, as per the national electrification policy, the government of Indonesia is planning to supply electricity to 90% of its population by 2020 from the current electrification rate of only 75.8%. As provision of stable and reliable electricity would sustain the country’s economic growth momentum, it becomes highly imperative to look at different ways to generate power.

Source: Draft General Plan of Electricity (RUKN) 2012-2031 By 2025, Indonesia might have to import over 70% of its national oil requirement due to the dwindling oil production in the country and the rising electricity demand. Hence, the government is planning to replace the consumption of oil for power generation with increased usage of coal and renewable energy (RE) sources. So far, indigenous use of RE sources for power generation (except geothermal) have been dismal in Indonesia due to several factors, such as lack of policy

and regulations, poor incentives, lack of data, low awareness, financial barriers, and bureaucracy.

Advantages of Switching To Biomass Acknowledging the looming threat of energy scarcity in the coming years and to move away from oil dependency to meet its surging energy needs, the Ministry of Energy has already taken initiatives to increase the nation’s reliance on new energy alternatives including RE sources. As a first step, the government has set an ambitious target to generate 17% of energy from renewable sources by 2025, through the effective utilization of biofuel, biomass, geothermal, hydropower, and solar resources.

Amongst the various RE sources, Indonesia is a hotbed for biomass producing nearly 146.7 million tons of biomass feedstock with a potential to generate 49,500 MW of energy (as estimated by the Indonesian Renewable Energy Society). But currently, it has only realized a capacity of 1,600 MW, largely generated by palm oil and sugar industries. To achieve the above RE target, the country needs to install around 33,000 MW of biomass based power plants by 2025, or 2,385 MW of installation annually till 2025. Biomass is the only renewable source of power that can support conventional fuels for the base-load generation, as these plants can run with a high availability rate of 90%. Effective utilization of indigenous biomass feedstock and coal fired power

Fuel Type

2010

2015

2020

2025

Biofuel

3.14%

3.72%

3.57%

6.73%

Biomass & Waste

-

0.47%

1.03%

2.37%

Geothermal

1.37%

1.40%

1.83%

2.24%

Hydro

1.89%

2.79%

5.17%

5.26%

Sea wave

-

-

0.17%

0.26%

Solar

-

0.23%

1.03%

1.97%

Wind

-

0.09%

0.34%

0.79%

Nuclear

-

-

0.69%

1.84%

CBM

-

0.47%

3.45%

3.53%

Oil

48.82%

38.60%

29.31%

23.68%

Gas

20.13%

19.53%

18.97%

19.74%

Coal

24.65%

32.70%

34.43%

31.58%

Source: Indonesian MOE (ESDM)

36 | POWER INSIDER VOLUME 7 ISSUE 4

2012

2015

2020

2025

2030

G THE DORMANT OMASS SECTOR plants will enable the country to reduce its imports on oil substantially.

Biomass is a natural fuel that in form of agricultural waste, crop residues and forest waste has been used for many years in rural parts of Indonesia. Biomass feedstock can be mainly obtained in Indonesia from rice waste, palm-kernel shells (PKS), sugar cane residues, rubber wood, other agricultural wastes and garbage. However, feedstock availability especially for PKS has been a limiting factor for several developers in Indonesia, as producers tend to export to lucrative markets such as Malaysia, restricting the availability for the domestic market.

Guaranteed supply of quality feedstock to biomass power project developers would rekindle market interest.

Though feedstock is available from all parts of the country, a significant majority is concentrated in the islands of Kalimantan, Sumatra, Irian Jaya and Sulawesi.

Setting the Baseline: Renewable Energy Target and Feed-in-Tariff Policy Taking cue from its Southeast Asian counterparts where regulations, especially feed-in tariffs (FiT), have played a major role in RE capacity building efforts, Indonesia’s Energy and

Mineral Resources Ministry introduced a ‘Regulation No. 4/2012’ in 2012. As per this regulation, the FiT for biomass power plants was fixed at 975 IDR (for feeding in at medium voltage in Java, Madura, Bali and Sumatra region), which is in the close range of FiT for geothermal power plants. This move of the government has encouraged companies to invest in the

biomass power sector. For instance: • In May 2011, Indonesia’s state-run plantation company PT Perkebunan Nusantara and South Korea’s biomass company Eco-Frontier signed a joint agreement to develop $92.0 million worth of biomass projects in Indonesia.

• Growth Steel Group is to invest 220 billion IDR to build a 30 MW power plant in North Sumatra. The project work for the same has started on 9th of July, 2012. Out of the planned capacity of 30 MW, 10 MW will

be utilized for meeting captive power needs and the rest will be sold to state electricity company PT PLN through a power purchase agreement (PPA).

• In Sep 2012, the Korea Electric Power Industrial Development (KEPID) Group announced a project to develop a biomass power plant through the use of the industrial waste products generated through the process of producing palm oil in Pasaman Regency on West Sumatra.

• In Oct 2012, PT PLN announced that it had agreed to construct a biomass power plant of 1 MW that would generate power by incinerating wood chips on Sumatra in partnership with the US-based company General Electric (GE). This plant is likely to be commissioned by 2014.

Waste to Energy Conversion In 2013, the government has decided to increase the FiT for power generated through garbage by around 3.8 US cents/ kwh to approximately 11.4 US cents/kwh to encourage more organizations to invest in the city-waste-fired power plants. This move has been legalized under Decree No. 19. 2013 by Energy and Mineral Resources Ministry. The government is planning to address both the issues of increasing garbage and municipal wastes in urban centers of the country and

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growing peak load power consumption in towns and cities.

Indonesian cities generate more than 10 million tones of municipal waste annually and it is expected to increase by 3-4% year-on-year, making ‘waste management’ a major environmental issue by 2020. Almost 70% of the waste generated in Jakarta and 65% of the waste generated in the other urban centers of Indonesia is organic and can be used as a form of biomass fuel. Municipal waste or garbage is used as a source to generate heat through combustion.

This heat can be ultimately used to generate steam and then electricity.

Strong Regulatory Framework is the Need of the Hour to Build Biomass Power Capacity: • The existing FiT policy is silent over the time period of power purchase agreement (PPA) and this ambiguity will discourage potential investors to make early investments. The Energy Ministry may take a leaf out of Thailand’s neat and clear regulations for the installation of renewable power generators in the country. Like Thailand, Indonesia should also specify a minimum time period in PPAs for the biomass power produced to sustain developers’

•

•

•

interest in this sector.

Apart from the FiT tariff regulations, the government may also intervene to fix prices for the various types of biomass feedstock, so that there is a regular raw-material supply to biomassbased power plants. If investors are assured about a regular and competitively priced feedstock supply, their financial risks will drastically come down and they will invest more in setting up new biomass power plants.

• The Energy Ministry should also look into the regulations that govern the retrofits market for old oil/coal fired power plants and check the possibility of converting them into biomass fired power plants.

Introduction of separate incentives for co-firing coal based power plants with biomass as a co-fuel will generate investors’ interest. If the fuel mix of 95% coal and 5% biomass is used, then no additional infrastructure investments are required and such projects should be highly encouraged by the government.

Indonesian government could also

consider providing tax benefits and plant machinery subsidies and low interest rate financing for biomass power plants.

• Many European countries have come up with innovative incentives to lure the industry participants to make an early move in biomass energy production. To accelerate the growth of biomass in the initial period, the Netherlands and Switzerland have introduced sliding ‘Feed-in-Premium’ (FiP) incentives for the biomass-fired power generators to feed in their surplus to the grid. Sliding FiP encourages the industry players to start and execute their projects early so that they can enjoy a premium tariff. The later they start, lesser will be the tariff premium.

The Indonesian government could implement this incentive scheme to accelerate the slow work on many biomass power projects in the country.

All these regulations and incentives are highly critical for the biomass power sector to realize its hidden potential.

Conclusion Weak regulatory framework and lack of incentives dissuade investors’ interest to develop a market that has high growth prospects. Besides, subsidized electricity prices and feedstock availability challenges discourage investments. In the current scenario where most of the planned thermal power projects are getting delayed due to several reasons, a strong regulatory push from the government to address the various challenges in

No.

Energy

Capacity

Electricity Tariff

1

Biomass

Until 10 MW

Rp. 975/kWh *F

2

Biogas

Until 10 MW

Rp. 975/kWh *F

3 4

Municipal Solid Waste Municipal Solid Waste

Until 10 MW Until 10 MW

Rp. 1,050/kWh *F Rp. 850/kWh *F

Note Non Municipal Solid Waste Zero Waste* Landfill** the biomass power sector will go a long way in harnessing the untapped potential.

Achieving the proposed RE target in the given timeframe is highly questionable with the absence of industry friendly regulations.

38 | POWER INSIDER VOLUME 7 ISSUE 4

www.mtuonsiteenergy.com

A Rolls-Royce Power Systems Brand

Feature - Standby Power Asia modules (PV), wind and battery energy storage systems.

Etienne Drouet Director E E a Singapore Microgrids have long been lauded as the future of renewable energy, and it is not difficult to see why. In today’s energy market, both developing and developed nations are still heavily dependent on traditional energy resources such as oil, coal and natural gas to supply their energy demands. However, with the recent oil crisis that has struck the global markets effectively impacting energy security, governments, companies and nations have been prompted to embark on a vision to create an alternative option of energy reliance and a low carbon future, through renewable energy, creating a paradigm shift in the energy sector. According to the IEA, renewable energy consumption will increase by an average of 2.6% year on year between 2012 and 2040, and will be the world’s fastest growing energy source in the projection period. This transition to renewable energy through microgrids presents both nations and companies a cost effective option while bringing about higher quality of power.

In order to maximize the integration of renewables, there is a need of shift from the centralized energy system to a decentralized one. By essence renewable energy is everywhere and so energy systems have to enable the harvesting of this energy at local level. Microgrid systems of today aim at being both independent, decentralized, self-sufficient and optimized for the community that they serve. In addition, microgrids possess the ability to integrate both traditional and renewable energy sources such as generator sets, photovoltaic

40 | POWER INSIDER VOLUME 7 ISSUE 4

While the discussion about microgrids have been making headway into the national agenda across the world, uptake in Asia have proved to be more challenging. A lack of establishment in microgrid standards, poor infrastructure and supplier or maintenance ecosystem, and tepid access to electricity rural areas of different countries in the region have slowed progress down tremendously. On the other hand, this conundrum presents opportunities for energy leaders to drive the microgrid solution in Asia, and fill this gap.

Most recently, ENGIE launched a pilot microgrid project in Singapore within the REIDS program with the objective to develop an innovative and all rounded solution for off grid areas that integrates different renewable energy technologies and fluid systems to present a self-sustainable and multi energy system to optimize operations, reduce costs and environmental impact, as well as to stabilize the system in real time.

zero emission microgrid. Hybrid micro-grid technologies will allow flexible plug and play interconnectivity between the various sources, storage components and end-uses such as required, for example, to provide for the electrification of islands and remote villages as well as to rapidly deploy energy supply and distribution systems during emergency situations.

ENGIE’s solution will also enable the integration of energy systems for every off grid areas in the best fitted way. ENGIE aims at providing greener energies by optimizing the use of local resources, as well as addressing various finals needs such as drinkable water, cooking facility or mobility. Furthermore, the solution will be designed to target green fields or brown fields, as many off grid areas already have an existing infrastructure.

Of course solutions already exist. (ex: PV and batteries, coupled with diesel engines). That is why within REIDS,

The scalable and interoperable solution which can be adapted to different conditions, locations and distributed energy resources available is modular, and allows possible upgrades when new technologies are available. Through this pilot project, ENGIE will be able to demonstrate the feasibility of its multi-energy solution, and evaluate the capacity of such system to

ENGIE will focus on the development of tomorrow’s technological bricks to address the affordable access to energy of off grid territories in Asia Pacific.

effectively reduce costs and environmental impact while bringing stability to operations.

Exploring the field of integrated solution for 1MW power need, ENGIE wants to design a more sustainable solution with less fuel. Our solution will be based on the integration of distributed energy sources and new energy value chains, such as Hydrogen or Biogas A Multi Energies microgrid.

The concept of our solution is based on Hybrid Micro Grids with a synergy between hydrogen production and an autonomous

The democratization of electricity and the revolution of the modern microgrids underscores that the foundations of the energy future are being laid today through rapid decentralization, decarbonization and automation.

Microgrids are bringing more than just energy resilience, but safety, reliability, efficiency and provision of productive power that will spearhead cheaper, smarter, cleaner energy solutions for nations worldwide.

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RUNNING THE WORLD WI THE EARTH: SOLAR IMPU THE POTENTIAL OF MICR

By Claudio Facchin, President, ABB Power Grids division

can remain aloft 24 hours a day on solar power alone.

T

On the ground, self-contained power grids like Solar Impulse’s are known as microgrids, energy resources that are typically located at or near the place where energy is used and that operate in a controlled, coordinated way. They have the advantage of being quick to build and can operate either as stand-alone grids or be connected to the main power grid.

In sunny or windy places, microgrids can be powered by renewable energy, such as a small-scale solar farm or local wind turbines.

o fly a plane around the world on solar energy alone was considered almost impossible until Solar Impulse took to the skies last year, setting a new record for the longest non-stop flight*.

The technologies that enable the plane to keep flying day and night have important applications on the ground, especially in places without grid connections or reliable electricity supplies.

Solar Impulse, which is resuming its round-the-world flight in 2016, is famous for having flown more than halfway round the world without consuming a drop of fossil fuel. What powers the plane is an on-board grid, which converts solar energy from the more than 17,000 solar photovoltaic cells that cover the plane’s wings and fuselage to power the plane.

As long as the sun is shining brightly, the cells produce more than enough power to keep the aircraft flying, thanks to the plane’s exceptionally efficient electric motors. Excess power is routed to the plane’s batteries where it is stored for night flights. In this way, Solar Impulse

42 | POWER INSIDER VOLUME 7 ISSUE 4

Such microgrids lend themselves perfectly to island communities and remote villages and towns, which would otherwise have to wait years or even decades for a main-grid power connection. A notable example is the Azores island of Faial in the Atlantic, population 15,000, which has a self-contained microgrid powered by five wind turbines and six oil-fired generators. Others include the solar- and diesel-powered microgrids in the remote towns of Marble Bar and Nullagine in Western Australia. Thanks to

grid stabilizing technology, which enables high solar-energy penetration, the towns now obtain close to 60 percent of their power from solar generation, saving approximately 400,000 liters of diesel and 1,100 tonnes of greenhouse gas emissions each year.

Microgrids have enormous potential in India and Africa, where more than 900 million people lack access to electricity. In sub-Saharan Africa, where two-thirds of the population – 620 million people – live without power, microgrids could dramatically speed up economic development.

In India, they are likely to be the best solution for many of the 14,000 villages which the government has earmarked for electrification in the coming years under its Power for all initiative.

Microgrids also have important applications in industrial and commercial sites because they help to ensure power quality and availability. In cities affected by frequent power cuts, they are a clean and efficient alternative to diesel generators, which are highly polluting and expensive to run, pushing up the cost of doing business. In Kenya, for instance, 57 percent of

ITHOUT CONSUMING ULSE DEMONSTRATES ROGRIDS businesses own generators.

Microgrids that are connected to the main power grid also help to improve grid resiliency and reliability, for instance during extreme weather events.

Unlike Solar Impulse, which relies totally on solar energy, microgrids on the ground still depend on fossil fuels, such as diesel, for back-up power when the wind stops blowing or the sun goes down. However, thanks to advances in battery technology, it is now possible to store excess renewable energy, in much the same way as Solar Impulse does, further reducing the need for diesel.

For instance, a newly upgraded microgrid on Kodiak Island, off Alaskaâ&#x20AC;&#x2122;s south coast, derives virtually all of its 28 megawatts (MW) of electricity capacity from hydropower and wind, supported by two 1.5 MW battery systems that take over as soon as the wind stops blowing.

Similar solutions are being installed at two microgrids in Africa, one at ABBâ&#x20AC;&#x2122;s headquarters in Johannesburg, and another at a remote windfarm called Marsabit in northern Kenya, where the population of 5,000 relies exclusively on a wind- and diesel-powered microgrid.

As Solar Impulse and these examples demonstrate, the technology needed for the mass deployment of microgrids is now readily available. In addition, the cost of key technology components, such as solar photovoltaic and battery storage, will continue to decline as a result of the economies of scale and innovations in materials and manufacturing. Renewable energy is, in many cases, the most economical solution for electrification, with the levelized cost of electricity (LCOE) lower than diesel, provided the latter is not heavily subsidized.

Some countries have in-

centive-driven renewables programmes, but very often no framework specifically for microgrids. This is starting to change; the United States Department of Energy, for instance, is working to encourage the development and deployment of microgrids, and the Indian government is, under its Power for all initiative, promulgating federal and state policies to end regulatory uncertainty, which is in turn expected to unlock the level of investment required to scale up the industry.

With the right financing and business models that take account of the regulatory environment, microgrids could help to trigger development in rural areas, improving the lives of hundreds of millions of people, while helping to meet national and global emissions targets. We can run the world without consuming the earth.

Claudio Facchin is the president of the Power Grids division of ABB Ltd., a $36 billion power and automation technology compa ny specializing in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 135,000 people.

AMI INFRASTRUCTU ASIA – PROGRESSING

AMI Imperative for Smart Grids for Effective Consumer Participation The Asian Advanced Metering Infrastructure market took a steep curve up in 2014, with the Chinese national rollouts. Globally around 100 million smart meters will be installed annually until 2020, and in 2014, China’s share was 75% of this market. AMI is the basic infrastructure needed to enable effective consumer participation in the power system as it gives data on electricity price and power consumption to customers. As the number of ‘prosumers’ in the grid increases, AMI becomes an inevitable part of the smart grid plan. Japan and South Korea are the next hotspots with large scale roll outs happening since 2014. In Southeast Asia, Malaysia, Thailand and The Philippines have notable developments initiated for the next 2-3 years.

44 | POWER INSIDER VOLUME 7 ISSUE 4

AMI Market Heat Map: Asia, 2016 Source: Frost & Sullivan China: The Global GameChanger Constituting 75% of Market Share China’s commitment to green development will be the primary driver for smart grid investments and AMI rollouts till 2020. Massive wind and solar power addition to the power grid is being carried out and it is likely to cross 120 GW by 2020. This addition includes building integrated PV and rooftop PVs. The demand side participation can be realized with the installation of AMI and demand response programs.

Besides, Chinese meter costs are some of the lowest in the world, due to the highly competitive nature of the market, relatively low-level technical specifications, and the economies of scale achieved through high order volumes.

URE DEVELOPMENTS ACROSS G THE DIGITAL UTILITY

The Chinese AMI market reached its peak in 2014, largely driven by the regulatory mandate from the Chinese government. The grid companies in China namely, State Grid and South Chinese Grid have pooled investments into the smart grid program in the past few years. Frost & Sullivan estimates that the current economic uncertainty in the Chinese economy is unlikely to slow down the AMI market. The roll out plan will be largely completed by 2020, following which 10 year old meter replacements will drive the market.

Japan: AMI Roll Out Being Driven By Residential Participation in the Retail Electricity Market Japan approaches smart grid as the next big opportunity that encourages residential participation in retail electricity market. Tokyo Electric

Power Company (TEPCO) in Japan has announced plans to implement AMI as an important constituent of smart grid demonstration projects. Residential smart-meter deployment has been taken up in a high pace in 2016. In 2015, 7.5 million smart meters were installed. As Japanese utilities speed up their rollouts ahead of electricity market liberalization in 2016-17, residential AMI installation picks up in 2016.

Japan is expected to rollout 78 million AMIs by 2024.

South Korea: 29.1 Million AMI to Be Installed By 2020 The Jeju smart grid test bed project ended in 2011, and Korea Electric Power Corporation (KEPCO), the electrical utility, started nation-wide AMI roll outs in later 2011. There are 19.1 million KEPCO consumers and 10.0 million non-KEPCO consumers in the country.

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Around 80% of AMI installations at these premises will be completed by 2018, and 100% by 2020.

India: Nascent Market with High Growth Potential AMI market in India is in its nascent stage. Ministry of Power funded 14 smart grid pilot projects, under the â&#x20AC;&#x2DC;Smart Grid Task forceâ&#x20AC;&#x2122;, is being carried out at various states. 280,000 smart meters were installed in 2015, and it is forecasted to increase to 1.2 million by 2020. However, most of these meters are likely to be of very low specification, in many cases only fitted with mobile read communications (the most basic form, where the meter is read by somebody passing by the property). This doesnâ&#x20AC;&#x2122;t fit the AMI specifications per-say.

Smart Electricity Meter Market: Annual Unit Shipment Forecast, Asia Pacific, 2015-2020 ** Note: These meters have limited smart features. Source: Frost & Sullivan ASEAN: Slow Growth Forecasted till 2017 The utilities in the region have not been aggressive in adopting smart grid initiatives. However, several pilot projects and trial runs have

46 | POWER INSIDER VOLUME 7 ISSUE 4

been started in various countries.

In Malaysia, TNB has announced nationwide smart-meter rollouts to commence in 2016, and 300,000 meters to be installed during the year.

Around 8,000,000 meters are likely to be installed by 2022. MERALCO in The Philippines is undertaking a pilot project involving installation of 40,000 smart meters, and plans to complete installation of 100,000

prepaid meters by 2016. In Thailand, Provincial Electricity Authority is ready to launch the installation of 120,000 residential smart meters in 2018.

Source: Tenaga Nasional Berhad, Electricity Generation of Thailand, Electricity of Vietnam, Meralco Conclusion The AMI market is going through growth phase in Asia. As part of power grid digitization, electrical utilities in China, Japan and South Korea are keen on installing AMI. Till 2020, these countries will drive the market plan. Malaysia, Thailand and the Philippines have smart meter/ prepaid meter installations planned in the next 2-3 years. AMI rollouts will create massive opportunities for service and solutions companies.

Data security and uncertainty in communication standards are key elements in this sector. Meter companies, network companies, meter data management (MDM) system vendors, and key market participants are working in partnerships or with associations to address this interoperability challenges.

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Feature - Standby Power Asia

TECHNOLOGY DRIVE APPROACHES WITH CAPITAL REQUIREM The high profile smart grid projects in Australia: both Smart Grid Smart City in New South Wales and AMI rollout in Victoria have been completed. These two projects have been complemented by other smaller AMI rollout projects such as the Solar City project in Western Australia; grid automation to manage the peak demand in Queensland, and others.

I

n early 2016, ‘smart grid’ did not have a single streamlined global or national standard, apart from the Smart Grid Standards Roadmap (launched by International ElectroTechnical Commission) which provides references of practices to users. This in fact has provided flexibilities for utilities to explore diverse solutions. In general, ‘Smart grid’ remains a concept that is frequently referred to as an intelligent solution to current constraints in electricity distribution.

power meters

In 2013 Frost & Sullivan published a survey focusing on power distributors’ desired goals and planned approaches in implementing Smart Grid strategies.

In that survey, we discovered these following factors drive the smart grid roll out:

Asset based capital expenditure allowance scheme a disincentive

Increasing demand for energy efficiency and the need for capital investment deferral Successful trials Growing adoption of embedded power generation The replacement of dated analogue

48 | POWER INSIDER VOLUME 7 ISSUE 4

Preparing for potential regulatory change The search for improved customer experience We also discovered the following factors restrained smart grid development:

Disaggregation of the power supply chain in Australia Inertia among customers in adopting new metering method Negative experiences from previous projects Financing difficulty Untested technologies After four years, much of the driving factors and challenges still hold, but the solutions to achieve the goals have changed.

The unexpected flops including the massive budget overshoot in Victoria (the total cost of the AMI rollout costed about A$ 2.239 Billion, and resulted in a net cost of A $319 million to

EN ALTERNATIVE H CONSERVATIVE MENTS consumers over the life of the program), poor customer engagement during the process of the project, and even the inadequate initial costbenefit analysis have been regarded contributing factors to the delay and over-budget.

To be fair, the AMI rollout in Victoria has not been fully understood yet, especially outside of Victoria.

Nevertheless, the flops and much negative publicity generated thereafter have inhibited other mandate-driven large scale AMI rollout attempt in Australia. Resources and Energy Minister, Anthony Roberts, announced electricity smart meters in NSW will be installed through a market-led rollout.

This was a decision made after 2 years of consultation.

In 2012’s survey, demand management was found to be the most mentioned area of interest by utilities in relation to smart grid projects. Ultimately, the

fundamental function of smart grids is to achieve network management and demand-supply two-way interaction.

This can be realised with various approaches involving multi-layered technologies. The shift from an AMI-focused approach to resultdriven conventional power network technology replacement reflects this sentiment. Instead, utilities have

turned to explore other approaches to ‘smarten up’ the grids.

The future electricity network will consist of a range of centralised and decentralised supply and demand technologies. These distributed technologies need to be integrated such that collaboratively they work to improve the quality and reliability of electricity supply. The common

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and realise its benefits. A resultsdriven network automation strategy that involves direct load control, distributed generation connection and management, proactive consumer education, incident preparedness while maximizing the existing ICT and T&D infrastructure - and incorporating AMI technology has higher chance of creating a positive cost-benefit result.

Also a more importantly and inclusive effort - of distributors involving retailers and customers in smart grid project development - is expected to provide greater synergy.

interests shared by utilities and customers: cost reduction, enabling consumer choice, and improved safety require a concerted approach including demand side management, regulatory change, more customer engagement and consultation, and adoption of new technologies.

The biggest challenge facing utilities is the integration of various technological initiatives (and consequently, technological uncertainty). In 2012, we expected that by 2015 there would be more consensuses on which definitive technologies deliver the desired smart grid results. There is today, in April 2016, no proven single off-shelf solution for smart grid yet.

In parallel to the smart grid development, the technological development in the areas of battery energy storage, small/large scale renewable energy power generation, and related control systems, have enabled micro-grids that households and small communities are able to run completely off-grid. Micro-grid has been considered an intelligent solution to solve the infrastructure constraint.

This has posed both new challenges and opportunities to traditional utilities. Naturally, utilities fear microgrids as a source of revenue erosion.

Customers can have greater access to electricity from other sources which will result in lack of economies of scale for utilities. Clean distributed generation through rooftop solar power in micro-grids will disable utilities from selling electricity. Demandresponse, an important element of micro-grids and virtual power plants, is decreasing overall power consumption

50 | POWER INSIDER VOLUME 7 ISSUE 4

and curtailing utilities to make more revenue through peak power generation and to build new generation plants.

Micro grids also challenge the traditional utility interests as they also serve nonutility sponsors such as cities and towns and military installations, universities, schools, and hospitals. A degree of selfsufficiency is provided to the non-utility sponsors that challenge the utility interests by reducing volumetric sales, the traditional revenue route. Micro-grids have been trialled and implemented across remote communities in Australia.

Most notably, utilities in Queensland have taken proactive actions to meet the challenges. For example, Ergon in Queensland has set up Effective Market Reform (EMR) business unit to explore the new roles of utilities in the age of technological changes. Utilities are able to offer technological expertise, regulatory support, and on-going services to enable and maintain micro-grids.

Conclusions It takes more compelling case studies and time for public to dissolve the negative perception of AMI based smart grid solution and fully understood

This article was authored by Sarah Wang, Senior Consultant, Australia & New Zealand, based on Frost & Sullivanâ&#x20AC;&#x2122;s reports â&#x20AC;&#x2DC;The Australian Smart Grid Market - Utility Survey (Moving from Smart Meter-focused Deployments to Holistic Solutions)and Analysis of Utility Transmission and Distribution Spend in Australia (A More Stringent Regulatory Review Leads to More Discrete CAPEX) which outlines more detailed insights of the Australian smart grid market.

For media queries or more information please contact djeremiah@frost.com.

About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break todayâ&#x20AC;&#x2122;s market participants. For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community.

Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies? Contact us: Start the discussion.

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TRENDS IMPACTING GLOBAL MICROGRI VIRTUAL POWER PL

G

lobally, the adoption of Distributed power generation (DPG) solutions such as solar, wind, small hydro, geothermal, small reciprocating engines and others have been gaining significant traction since the past decade. The integration of DPG solutions into the power grid has become a major challenge for the power utilities across the globe. The traditional top-down electricity business model: utility selling to consumers is changing, and a bottomup model of a bi-directional network dominated by DPG and prosumers is becoming popular. Microgrid (MG) and Virtual Power Plants (VPP) will be the key to integration of DPG into the network effectively.

MG is an energy system consisting of a group of interconnected loads, distributed energy resources, consumers, and optional storage that acts as a single controllable entity with respect to the grid. VPP is often correlated with MGs. It is a virtual network that is dependent on software systems to remotely control production from a cluster of DERs that

52 | POWER INSIDER VOLUME 7 ISSUE 4

are grid connected through smart grid technologies.

Utilities are Wary of MG and VPP Presently, power utilities consider DPG as a challenge; MGs and VPPs serve non-

utility sponsors such as towns, military installations, and university campus and is a cause of revenue erosion for the utility. Besides grid safety concerns, grid stability effects and operation, are other trepidations in the utilityâ&#x20AC;&#x2122;s

G ID AND LANTS

requires additional costs that need to be incentivized. These involve transaction costs such as signing contracts, transferring money, and refunding Transmission System Operator (TSO) and Distribution System Operator (DSO) to the DSO for payments made to the DG operator. Such incentivisation relies mainly on a strong regulatory regime to neutralize undesirable incentives and offer a positive one.

Lack of policy drivers especially in emerging nations can be a challenge for utilities. This is to develop a positive business case for MGs. For example, the renewables targets and the aggressive mandates to limit greenhouse gas emissions are implied mainly in the United States and European Union.

Regional trends MG is an emerging market, while VPP is still in nascent stage. Till 2020, exponential growth is forecasted for MG’s especially for rural electrification application in the developing nations. VPP is likely to gain significance in developed nations such as US,

New Business Model for Utilities

Utilities need to perform effective energy management. Decentralized electricity

Hotspots for MG and VPP, Global, 2016 Source: Frost & Sullivan North America has the highest share of MGs in terms of installed capacity in communities, institutions and commercial sites. Military MG is the major application segment, accounting for an estimated investment of $1.6 billion annually by 2020. The unreliable nature of the extensive US power grid makes MGs an attractive option for high power quality and high reliability electricity supply for industries, research centers, and data centers.

Also, North America has the biggest Demand Response (DR) based VPPs. The American Electric Power Service Corporation’s (AEP) VPP project in conjunction with EPRI is a large VPP simulation demonstration project in central Ohio that involves 110,000 AEP customers and includes energy storage devices, energy management systems, and other smart devices.

Europe is focused on DER such as Solar, Wind, hydro and geothermal.

These DPG solutions are driving the need for MG and VPP. MG market is in testing phase and power equipment companies are investing in pilot projects. DER assets are being owned and operated by consumers due to which European Distribution System Operators (DSO) are making efforts to develop new business models and alter their traditional practices.

However, technical immaturity, utility reluctance, and current cost structure makes the MG market restricted to niche operations.

way. Also, utilities need to charter an equitable and fair allocation of cost or fees. Customers with distributed generation sources need more equipment from the utility to support interconnections.

However, cost split to be paid to utility is not yet clear.

MG’s and VPP can be actively integrated into the utility’s business model to ensure reliability, grid stability, and increase energy capacity. The utilities’ need to be part of the energy transition including DPG and grid management can be realized by being supportive and active participant of the emerging MG and VPP market.

interconnected distributed energy resources and customer loads that are controlled by interactions between the MG and the utility while incorporating Demand Response and energy efficiency measures

Japan, and EU, as it is likely to get integrated into smart grid plans and smart city projects.

The trend is shifting towards implementation of advanced MGs with smart technologies and new layers of intelligence where MGs are foreseen as building blocks of smart grids. This is considered as a cell in the stack of

European VPPs are DPG focused with large scale solar and wind projects. In UK and France, VPPs are utilized for peak shaving especially in winter. An emerging trend is DR based VPP. UK, France, Finland and Belgium have advanced DR market, while in Germany the market rules and regulations do not favor DR VPP. Asia Pacific: Japan is the pioneer in the Asia Pacific MG market. Government backed R&D agency NEDO, and Ministry of Environment (MOE) funds MG project in the country. The earthquake

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and power outage of 2011 has led to the implementation of VPPs to mitigate emergency crisis. With the commercialization of V2H charging (Vehicle to Home) in Japan, VPPs with batteries in EV fleets linked to commercial and residential buildings is an ongoing trend in which a cluster of small generators and storage systems

behave as a single unit with the help of power electronics and communication systems.

Australia is also promoting MG development. Government supported ARENA agency has funded several MG projects since 2012. In the rest of APAC, Rural electrification projects are mainly bringing in MG developments. Some of

the notable ones are the 1,000 islands project in Indonesia, solar photovoltaic program in the Philippines, and offgrid projects in Malaysia. Sarawak Energy in Malaysia, Perusahaan Listrik Negara (PLN) in Indonesia, and power corporations in the Philippines are targeting rural electrification with MGs. The Last Word MG market will develop faster than VPP until 2020.

Traditional utilities are reinventing their business models and are becoming smart energy integrators by balancing energy supply-demand, managing information networks, and running smart grid programs.

In this model, power utilities will be neither owning power plants nor selling power to the grid, rather they keep the demand-supply balance in check and run DR and smart grid programs. The sooner the utilities adapt to these new proactive business models, opportunities for VPP and MGs will be subject to rapid growth.

Avanthika Satheesh (Ms.) Industry Analyst, Energy & Environment Frost & Sullivan, Asia Pacific

54 | POWER INSIDER VOLUME 7 ISSUE 4

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26 Oct - 28 Oct Argus California Carbon & LCFS Summit The Silverado Resort and Spa, Napa Valley, CA, , United States of America Organisers: Argus Media, Inc. Email: bel.cevallos@argusmedia.com URL: www.argusmedia.com November 2016 01 Nov - 02 Nov 2th Annual Lithium Battery Power 2016 Hyatt Regency Bethesda, Bethesda, Maryland, , United States of America Organisers: Cambridge Innovation Institute Email: chi@healthtech.com URL: www.knowledgefoundation.com 01 Nov - 01 Nov Capture UK Energy Storage Conference 2016 Jurys Inn Hotel, Milton Keynes, Buckinghamshire, , United Kingdom Organisers: Charles Maxwell Email: Megan.Roden@CharlesMaxwell.co.uk URL: www.captureenergystorage.com 03 Nov - 04 Nov International SAP Conference on Asset Management The Hague, , Netherlands Organisers: T.A. Cook Email: a.matern@tacook.com URL: uk.tacook.com 03 Nov - 04 Nov 7th Annual Battery Safety 2016 Hyatt Regency Bethesda, Bethesda, Maryland, , United States of America Organisers: Cambridge Innovation Institute Email: chi@healthtech.com URL: www.knowledgefoundation.com 06 Nov - 10 Nov 2016 ANS Winter Meeting and Nuclear Technology Expo Caesarâ&#x20AC;&#x2122;s Palace, Las Vegas, NV, , United States of America Organisers: American Nuclear Society Email: meetings@ans.org URL: 2016-ans-winter-meeting-and-nuclear-technologyexpo

2016 07 Nov - 10 Nov World Ethanol and Biofuels Conference, Brussels, Belgium Steigenberger Wiltcherâ&#x20AC;&#x2122;s Hotel, Brussels, , Belgium Organisers: World Ethanol and Biofuels Conference Email: registrations@agra-net.com URL: energy.knect365.com 07 Nov - 09 Nov 7th Annual Operational Excellence in Oil and Gas Summit Norris Convention Center, CityCenter, Houston, TX, , United States of America Organisers: IQPC Email: stefania.fedele@iqpc.co.uk URL: www.opexinoilandgas.com 07 Nov - 08 Nov Platts Inaugural Gasoline, Naphtha and LPG Conference The Mainport Hotel Rotterdam, Rotterdam, , Netherlands Organisers: S&P Global Platts Email: conf_registrations@platts.com URL: www.platts.com 07 Nov - 11 Nov Power Week 2016 PARKROYAL on Beach Road Hotel, , Singapore Organisers: Infocuse International Email: reanne@power-week.com URL: www.power-week.com 08 Nov - 10 Nov Water Africa and West Africa Building & Construction Nigeria 2016 Abuja International Conference Centre, Abuja, , Nigeria Organisers: ACE Event Management Email: info@ace-events.com URL: www.ace-events.com 09 Nov - 10 Nov Concentrated Solar Power (CSP) Today Sevilla 2016 NH Collection Seville, Av Diego Martinez Barrio, 8, 41013, Seville, , Spain Organisers: Jon Harman Email: jharman@fc-bi.com URL: social.csptoday.com 14 Nov - 15 Nov Refining Engineering & Construction 2016 Conference & Exhibition Omni Houston Hotel, Houston, TX, , United States of America Organisers: Petrochemical Update Email: karla@petchem-update.com URL: analysis.petchem-update.com 14 Nov - 15 Nov 6th annual Social Media Within Defence London, , United Kingdom Organisers: SMi Group Email: hdegracia@smi-online.co.uk URL: www.smi-online.co.uk

15 Nov - 15 Nov Intersolar Summit Iran Tehran, Iran, , Iran Organisers: Solar Promotion GmbH URL: intersolar-summit-iran 15 Nov - 18 Nov EnergyDecentral 2016 Messe Hannover, Hanover, , Germany Organisers: DLG Service GmbH Email: energy@dlg.org URL: www.energy-decentral.com 21 Nov - 22 Nov Project Financing in Oil and Gas Holiday Inn Kensington Forum, London, , United Kingdom Organisers: SMi Group Email: aserazetdinova@smi-online.co.uk URL: www.projectfinance-oilgas.com 22 Nov - 22 Nov The Tidal Awards Ceremony and Dinner Novotel London West Hotel, One Shortlands, W6 8DR, London, , United Kingdom Organisers: Paul Soskin Email: paul@tidaltoday.com URL: analysis.tidaltoday.com 23 Nov - 24 Nov Strategies In Light Europe ExCeL, London, , United Kingdom Organisers: PennWell Email: crispinc@pennwell.com URL: strategies-in-light-europe 28 Nov - 29 Nov Energy Transitions 2016 The Royal Society, London, , United Kingdom Organisers: Chatham House - The Royal Institute of International Affairs Email: acook@chathamhouse.org URL: energy-transitions-2016 29 Nov - 30 Nov SmartSec Europe 2016 Casa 400, Amsterdam, , Netherlands Organisers: Phoenix Forums Email: julia@phoenix-forums.com URL: www.smartsec-europe.com 30 Nov - 01 Dec SPE Middle East Artificial Lift Conference and Exhibition The Diplomat Radisson Blu Hotel, Manama, , Bahrain Organisers: Society of Petroleum Engineers Email: spedub@spe.org URL: www.spe.org

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