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  • Electricity/Power Grid
4 August 2019

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  • Indonesia
Tens of millions of people on

Indonesia

’s heavily populated Java island were affected by a widespread electricity outage on Sunday after state utility company PLN reported disruptions at several power plants.

The shutdown plunged buildings in the sprawling capital Jakarta – home to some 30 million people – into darkness and forced the temporary closure of its

new mass rapid transit system

.

Passengers wait outside an MRT station in Jakarta on Sunday. Photo: EPA
Passengers wait outside an MRT station in Jakarta on Sunday. Photo: EPA

Passengers were safely evacuated from several MRT carriages when the power went out, according to the system’s operator, while commuter trains were also affected.

Jakarta’s hospitals and Soekarno-Hatta International Airport were not affected because they have backup power generators, officials said.

“For people with sick relatives, all hospitals in Jakarta have power generators and are operating normally,” the city’s governor Anies Baswedan said on social media.

The outages affected traffic lights, aggravating the capital’s already notorious congestion. Photo: AFP
The outages affected traffic lights, aggravating the capital’s already notorious congestion. Photo: AFP

Jakarta’s top politician called for residents to reduce travel and conserve water until power is restored.

The blackout – which began around noon local time and was expected to last until later Sunday – caused sporadic disruptions in mobile phone services and cash machines, while some apartment buildings were left in the dark.

“The blackout has been going on for hours and it’s extremely hot in my apartment because the air conditioner is off,” said 30-year-old Jakarta resident Maya Larasati.

Outages also turned off some traffic lights, aggravating the capital’s notorious congestion.

PLN said the blackout was caused when a gas turbine at a major power plant went down and by a disruption at another facility. Both are on the western end of Java.

“We’re doing our best to fix the system so the power comes back to normal,” it added.

  • Energy-Climate & Environment
3 August 2019

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  • Malaysia

We are all going to have to count the cost of climate change one way or another. If it is not the huge economic cost of implementing the correct mitigation strategy, it is the dire cost of coping with the impact. One part of that statement is incorrect, and it is not the part you might think.

Many call climate change humanity’s greatest challenge, and rightly so. It could cost our economies trillions if left unchecked. That is aside from the sweeping ecological and societal damage if the world warms more than 2°C above pre-industrial levels, identified in the United Nations Framework on Climate Change (UNFCC). The myth that we must tackle is that addressing this challenge will necessitate significant economic sacrifices. That simply is not the case.

In Boston Consulting Group’s (BCG) latest report, “The Economic Case for Combating Climate Change”, we reveal that there are clear paths to significantly reduce greenhouse gas (GHG) emissions while contributing to economic growth. By prioritising the most efficient emission reduction measures, many nations can accelerate, rather than slow, gross domestic product growth. A key part of that journey is the question of sustainable energy supplies, and that is something Malaysia is well-positioned to leverage.

 

Renewing Malaysia’s energy journey

Energy, Science, Environment and Climate Change Minister Yeo Bee Yin announced a fresh transformation of the renewable energy policy last year, setting a target of 20% renewables as a share of electricity generation by 2030, up from just 2% already installed.

This 20% target is a positive shift in policy, yet one that highlights a key finding of our report. Just about every leading global emitter could eliminate 75% to 90% of the gap between emissions projected under current policies and the 2°C target using proven technologies that exist today. Malaysia is better placed than many, with the likelihood that it could reduce that gap by 80% to 90% using existing technologies. And all this could be achieved without sacrificing that all-important economic growth.

Renewable energy is a key enabler in reducing the carbon intensity of economies. That is particularly true in Malaysia, where in 2014, energy accounted for 80% of industrial emissions. “The Economic Case for Combating Climate Change” report estimates that all countries studied could provide at least 80% of their power with low-carbon technologies by 2050.

This shift to low-carbon and renewable energy not only provides a path to reduced carbon emissions from the country’s power sector, it amplifies that benefit across the economy. With electricity set to power everything from buildings and industry to the cars on our roads, a more sustainable electricity supply is a critical step toward decoupling growth from GHG emissions. That equation is a vital part of balancing the question of energy and growth.

 

The growth and fossil fuel dilemma

Rapidly developing economies like Malaysia’s face a substantial dilemma when it comes to decarbonising the economy. While economies like the US’ and Europe’s have enjoyed the benefits of historical carbon-intensive growth, ignorant perhaps of the consequences, we must face a more informed future. That raises an important question about fossil fuels and growth.

Ambitious economic targets, alongside population growth that is expected to add 10 million people by 2040, will create a significant energy need for the country. The traditional approach to meeting this challenge has been a reliance on carbon-intensive fossil fuels, which would see emissions rise significantly, particularly if this involves a heavy reliance on coal. This challenge is mirrored by that of India in our report, where growth targets and a rise in coal combustion could see India’s emissions more than doubling by 2050. But in a world of ever more affordable renewable energy, coal’s high fixed cost makes it an increasingly poor economic option.

Russia presents a unique challenge that also offers some insight for Malaysia. As a carbon-intensive economy without a high per capita income, Russia faces a much higher investment hurdle than rival developed economies. Steering toward the 2°C path would require investment equivalent to 6.1% of annual GDP, compared with 1.4% for Germany.

Russia’s significant domestic fuel reserves also create a strange conundrum. Not only must they resist the temptation to utilise cheap domestic fuel, but as a hydrocarbon-exporting nation, the world’s move toward a more climate-friendly economy will see GDP decrease as exports decline.

 

Leveraging Malaysia’s advantage

Nobody is saying all this is easy. There is no global template that Malaysia can import as a tick-box exercise toward greener economic growth. Not only will efforts to reduce emissions need to be significantly accelerated, they will have to be customised to meet the needs and opportunities of the nation.

Renewable energy has a big role to play. Solar power will contribute significantly to that journey, providing an affordable solution that benefits from the rapidly falling levelised cost of energy (LCOE) it generates. While the LCOE of solar is perhaps not at parity with conventional thermal power in Malaysia, the trajectory toward that moment is inevitable and unstoppable. Self-generation through initiatives such as net metering will also add a valuable dimension. Wind power is a globally popular option, but one with limited potential in Malaysia.

The country’s significant natural gas reserves also present an important opportunity. Natural gas will inevitably replace coal in power generation and industry on the path to a less carbon-intensive global economy. Malaysia must push towards becoming one of the most climate-competitive and cost-efficient producers of natural gas. This could enable the country to competitively position its hydrocarbons while leveraging the economic benefits of the global switch to gas.

 

Sustaining greener growth

Under the Nationally Determined Contributions as part of UNFCC, Malaysia has committed to reducing GHG emissions intensity of GDP by 45% by 2030, relative to 2005 levels. That policy imperative must guide our actions going forward. These targets are not simply hypothetical. In one BCG study conducted in Belgium, we estimate the country could save around 36 megatonnes of CO2 by 2030 through investment in established technologies.

There are green shoots on the horizon for Malaysia. By 2014, GHG emission intensity per unit of GDP had improved by 27% compared with 2005 levels. The recent shift to a more renewable energy future gives us further cause for hope.

In the face of global climate change, it is already clear that the cost of doing nothing is far greater than the cost of embracing change. What BCG’s report highlights is that delivering a greener future for the planet does not have to cost Malaysia the Earth.

  • Energy Policy
3 August 2019

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  • Philippines

STATE-RUN National Transmission Corp. (TransCo) has filed its application to collect feed-in tariff allowance (FiT-All), a subsidy given to renewable-energy (RE) developers.

In its filing dated July 17, 2019, TransCo said it is seeking the Energy Regulatory Commission’s (ERC) approval for FiT-All amounting to P0.2278 per kilowatt-hour (kWh) that shall take effect in the January 2020 billing period.

The FiT-All sought by Transco is slightly higher than the FiT-All rate of P0.2226 per kWh approved by the ERC for 2018.

It is also higher than the P0.2932 per kWh first sought by TransCo but the agency has since then revised it to P0.2471 per kWh for this year.

TransCo stated in its application that the 2019 FiT-All rate included only eligible/projected eligible RE capacities up to the installation targets set by the Department of Energy (DoE): 500 megawatts (MW) for solar up to March 15, 2016; 400 MW for wind plants that were operational after the RE law; and 33 MW for pre-RE law facilities.

It also considered a total of 250.50 MW for FiT-eligible biomass and 172.43 MW for hydro, as well as covered a total of 525.95 MW for solar plants because of “the principle of commercial and technical indivisibility of projects.”

TransCo said FiT-differential for 2015-2019 generation was charged to 2020 FiT-All rate which the agency referred to as energy generation between 2015 and 2019 which are expected to be billed to the state-led firm next year.
It projected that the total FiT differential would amount to P114,881,956.20 (2015); P373,206,846.23 (2016); P69,215,445.73 (2017); P67,405,043.44 (2018); and P150,255,855.88 (2019).

As outlined in Republic Act 9513, also known as the Renewable Energy Act of 2008, the FiT program aims to accelerate the development of renewable energy sources. It pertains to the electricity produced from wind, solar, ocean, run-of-river hydropower, and biomass.

FiT-All, whose fund is administered by TransCo, is a uniform charge payable by all electricity users which is computed and set annually. Distribution utilities (DUs), the National Grid Corp. of the Philippines (NGCP), and retail electricity suppliers (RES) serve as collecting agents.

  • Others
3 August 2019

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  • Philippines

MANILA, Philippines – Senator Win Gatchalian wants the Senate to look into the status of the Philippines’ greenhouse gas (GHG) emissions and nationally determined contribution (NDC), to ensure that the country meets its promise to reduce at least 70% of its emissions by 2030.

Gatchalian, who heads the Senate Committee on Energy, filed Senate Resolution No. 45 on Tuesday, July 30, a week after President Rodrigo Duterte in his 4th State of the Nation Address ordered the Department of Energy (DOE) to fast-track “the development of renewable energy sources, and reduce dependence on the traditional energy sources such as coal.”

“There is a need for Congress to examine the efforts of various government agencies in arriving at their respective sectoral NDCs and their specific adaptation and mitigation strategies, and the status of the country’s GHG emissions in relation to the development of the NDC with the end in view of ensuring compliance with the Paris Agreement,” Gatchalian said.

In March 2017, Duterte signed the Paris climate deal despite his misigivings about it, because a majority of his Cabinet voted to sign it. The deal aims to keep global warming “well below” 2 degrees Celsius (3.6 degrees Fahrenheit) over pre-Industrial Revolution levels, and to strive for a limit of 1.5ºC.

Article 4, paragraph 2 of the Paris Agreement requires parties to “prepare, communicate, and maintains successive NDCs that [they] intend to achieve.” NDCs “embody efforts by each country to reduce national emissions and adapt to the impacts of climate change,” according to the United Nations Framework Convention on Climate Change.

According to Gatchalian, the country has until 2020 to submit its NDC, which is supposed to detail measures to mitigate and adapt to climate change. (READ: Climate change: Why PH should care)

But 6 months before the 2020 deadline, government agencies have yet to finalize their respective submissions for the NDCs, while some are still conducting stakeholder consultations, Gatchalian said. (READ: UN chief says world ‘not on track’ with climate change)

“The State has the constitutional obligation to protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature,” the senator added. – Rappler.com

  • Electricity/Power Grid
2 August 2019

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  • Malaysia

KUALA LUMPUR (Aug 1): Tenaga Nasional Bhd (TNB) has incorporated two wholly-owned subsidiaries, TNB Power Generation Sdn Bhd (GenCo) and TNB Retail Sdn Bhd (RetailCo), to facilitate its proposed internal reorganisation.

In a filing with Bursa Malaysia today, the utility giant said GenCo’s principal activities are the ownership, management and operation of domestic power plants, renewable energy generation business, power plant operation and maintenance business as well as dry bulk terminal operations business.

Meanwhile, RetailCo’s principal activities are the sale of electricity to customers, collection of revenues from customers, the provision of customer services, operation of call management centres, green energy solution services and beyond the meter solution services, it said.

TNB said as of Aug 1, 2019, the directors of GenCo and RetailCo were Nazmi Othman, Datuk Fazlur Rahman Zainuddin and Datuk Ir Sharuddin Mohd Simin.

“The Incorporation is not expected to have a material impact on the net assets and gearing of TNB and its subsidiaries, as well as the group’s earnings and earnings per ordinary share for the financial year ending Dec 31, 2019,” it added.

TNB said the Incorporation was also not expected to have any effect on its share capital and shareholdings of the substantial shareholders.

TNB announced last month that its board had approved the proposed internal reorganisation which involves the transfer by TNB of its domestic power generation and electricity retail businesses to two new wholly-owned subsidiaries of TNB.

  • Oil & Gas
2 August 2019

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  • Singapore

SINGAPORE: Traders are starting to make enquiries to book vessels to store or ship liquefied natural gas(LNG) as they bet for winter demand to boost prices for spot cargoes which are trading near record lows, multiple industry sources said on Friday.

Enquiries are trickling in for booking vessels on a spot basis, ranging from a period of one month to several months, which is expected to push shipping rates up, the sources said.

With Asia LNG spot cargoes trading at below $4 per million British thermal units, traders may take the opportunity to buy the cargoes now for later use, especially as demand typically increases during winter for heating which in turn pushes up prices, the sources said.

Storing commodity cargoes on ships to sell at a later date to take advantage of the rising price for later-dated supplies, known as the contango carry trade, is common in oil markets but is considered risky for LNG because of high storage costs and because LNG cargoes evaporate over time.

November LNG spot prices are estimated to be about $1 per million British thermal units (mmBtu) higher than October spot prices while October spot prices are likely about 70 to 90 cents higher than September prices, the sources added. A market structure where later-dated prices are higher than prompt supplies is called a contango.

“At 90 cents contango, floating storage is starting to make sense and at $1.50 people will be jumping on it,” a Singapore-based LNG trader said, adding that the wide price spread signals the temporary storage of LNG on tankers a possibility.

At least one Japanese trader has issued a vessel enquiry for 60 days to charter an Australian cargo loading in September, said a second shipbroker.

Last year, more than 30 vessels globally were flagged as floating storage ahead of winter as traders bet that demand would increase exponentially like it did the year before. But, spot prices subsequently fell amid a mild winter.

This year, an abundance of supply globally from new projects has pushed spot prices to record lows.

Still, some traders are adopting the a more cautious approach given the uncertain economic outlook.

“While the forward curve (suggests floating storage works), I personally do not think (it) works as … the cost of hiring ships will go up when there are too many cargoes,” a second Singapore-based trader said.

  • Coal
2 August 2019

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  • ASEAN

SINGAPORE – As one of the regions with the highest number of coal plants in the pipeline, South-east Asia must work to quickly end its reliance on fossil fuels, with the goal of phasing out all coal plants from 2020, the United Nations (UN) urged on Friday (Aug 2).

Speaking to journalists via a teleconference, Mr Luis Alfonso de Alba, Special Envoy of the UN Secretary-General for an upcoming climate summit, also appealed to nations in the bloc to stop subsidising fossil fuels.

“This is particularly relevant for a region where emissions continue to grow,” he said.

South-east Asia is the region with the third-highest number of coal plants in the pipeline, after China and India, added Ms Rachel Kyte, Special Representative of the UN Secretary-General and chief executive for independent energy organisation Sustainable Energy For All.

The UN representatives were speaking to journalists ahead of a Climate Action Summit to be held on Sept 23 in New York.

The summit will bring together governments from around 200 countries, the private sector, civil society, local authorities and other international organisations.

Convened by UN Secretary-General Antonio Guterres, the meeting is meant to spur greater climate action among nations by encouraging them to ratchet up their climate pledges made under the Paris Agreement, which aims to limit global warming to well under 2 deg C above pre-industrial levels.

Emissions from the burning of fossil fuels for energy are contributing to this warming.

The combustion of extractive fuels, like coal and natural gas release gases, such as carbon dioxide into the atmosphere, where they act like a blanket in trapping heat.

This causes weather patterns to change and increases the likelihood of extreme weather events.

“The climate emergency is quite evident to all of us,” said Mr de Alba, pointing to recent heatwaves experienced in the months of June and July.

Data from the World Meteorological Organisation and its climate centre showed that the month of July at least equalled, if not surpassed, the hottest month in recorded history. This follows the hottest June ever.

Coal, in particular, is considered the dirtiest form of fossil fuel. Its combustion not only releases heat-trapping gases into the air, but also contributes to pollution which could impact the health of people living nearby.

Yet, it has been the energy source of choice for many developing nations because it is considered cheap.

But on Friday, the UN representatives cautioned against this rhetoric, pointing to the emergence of new technologies and the decline in coal investments from financial institutions as ways in which coal may not be financially viable anymore.

They also urged governments to consider externalities to using coal that may not be factored into economic analyses, such as how pollution could impact human health.

What is needed next, Ms Kyte added, is for a boost in investments in clean energy. As she put it: “The spigot is beginning to turn off for investments in coal. But we can’t turn it off unless we turn on the tap for investments in renewable energy.”

Singapore is powered mainly by natural gas, which is a cleaner form of energy but still a fossil fuel nonetheless.

However, the Singapore Government is investing heavily in solar energy, and is trialling the installation of solar panels on water bodies to overcome space constraints.

Environmental concerns aside, renewable energy would also be more effective in providing access to energy for rural communities often isolated by geography, said Ms Kyte.

In archipelagos in the Philippines for example, rural communities located farther away from big cities could gain access to energy via renewable energy sources instead of centrally controlled coal plants.

“This is a more reliable way of providing those communities with the kind of energy they need to participate constructively within the economy. Productive use of energy is not just having enough to power a lamp, but having enough energy to support a small business,” said Ms Kyte.

At a separate briefing on Friday, Mr Guterres reiterated his call for nations to attend the September summit with bolder climate action plans.

He said: “I am telling leaders don’t come to the summit with beautiful speeches. Come with concrete plans – clear steps to enhance nationally determined contributions by 2020 – and strategies for carbon neutrality by 2050.”

Asked if Singapore intends to scale up its climate pledge, a spokesman from the National Climate Change Secretariat (NCCS) referred to the commitment the Republic had made under the Paris Agreement.

Under its 2030 Nationally Determined Contribution (NDC) – the technical name for climate targets set by each country under the Agreement – Singapore pledged to become greener economically and reduce the amount of greenhouse gases emitted to achieve each dollar of gross domestic product by 36 per cent from 2005 levels, come 2030. It also pledged to stop any further increases to its greenhouse gas emissions by the same timeline.

“This is an ambitious target for Singapore given our constraints in accessing alternative energy options such as geothermal, wind or hydroelectric power,” said the NCCS spokesman.

But Singapore is also developing a low emissions strategy for the longer-term, and a public consultation is currently ongoing. “We will review and update our 2030 NDC as part of this process,” she added.

  • Others
2 August 2019

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  • Cambodia

While Cambodia might be pulling out all the stops to develop its smart cities, the lack of an integrated master plan is hampering these efforts.

The ASEAN Smart Cities Framework defines a smart city as one that harnesses technological, digital solutions and innovative, non-technological means to address urban challenges – continuously improving people’s lives and creating new opportunities.

Envisioned in April 2018 as a platform to support the creation of technologically advanced urban areas in the region, the ASEAN Smart Cities Network (ASCN) has three Cambodian cities in its initial list of 26 pilot cities from across Southeast Asia – Phnom Penh, Siem Reap and Battambang.

Despite collaborations with the region’s best tech minds in Vietnam, Singapore, Korea and Japan, Cambodia’s best intentions may go to waste unless it creates coordinated plans and policies and implements proper guidelines and regulations.

Poor planning, few investors

The lack of zoning or building code requirements are among the issues hampering smart city development in Cambodia. Residential and industrial areas are developed in the same neighbourhoods in some parts of Phnom Penh, with factories built next to schools and homes and waterways used as dumping grounds by businesses.

Tous Saphoeun, an architecture professor who also works with the Cambodia Ministry of Land Management, Urban Planning and Construction, told Cambodian media last year that city officials may have thought a smart city program only involves upgrading certain parts of a city as opposed to the city as a whole.

Speaking during a seminar titled ‘Smart Cities and The Future of Urban Development’ in Phnom Penh in June, Guillaume Massin, managing director of DFDL – a law firm which specialises in the Mekong region – noted that there is still ambiguity regarding funding for smart city projects and whether the funding would be led by the government, private sector or public-private partnerships (PPPs).

Pointing out that there were no rules for financing in place, Massin also told local media that lack of regulations and access to finance are keeping most investors away – except the Chinese. 

However, earlier this week the Cambodian government announced it had approved US$5.2 billion worth of investments in the first half of this year, claiming that the 48.5 percent year-on-year increase is a sign of investors’ growing confidence in the country.

Cambodia Smart City

Source: Various

Foreign tech know-how

Meanwhile, a recent meeting between the Phnom Penh Municipal Council and Ho Chi Minh City Party Committee saw urban planners from both cities agreeing to work together to solve shared problems such as traffic congestion, waste management, pollution and crime – the latest in a string of foreign countries offering smart city assistance to Cambodia.

Cambodia and Korea agreed to cooperate and turn the port city of Sihanoukville into a smart city as far back as 2016. Leveraging on Korea’s expertise, the two governments agreed to build state-of-the-art water management, transportation and energy infrastructure in Sihanoukville based on Korean technology.

In March, Singaporean cryptocurrency and blockchain developer Pundi X confirmed it will be working with Cambodia to build a one square kilometre smart city in Phnom Penh which will utilise blockchain to run the electricity grid and road traffic systems.

At an urban development forum in Phnom Penh in February, Japan’s vice-minister of Land, Infrastructure, Transport and Tourism told participants that his country would help Cambodia create smart cities that avoided the mistakes of Japan’s early development in areas such as housing, traffic and environment.

Improved governance, effective institutions

A sustainable environment is one of the three outcomes of the ASCN alongside a competitive economy and high quality of life.

However, as the ASEAN Smart Cities Framework notes, integrated master planning and development is crucial in enabling governments to create and manage the various urban issues affecting the progress of the three outcomes.

Amidst a dynamic political, economic and social environment, the drawing up of long-term plans and blueprints allows cities to meet their needs in a sustainable manner with principles such as adoption of a long-term view; productive decision-making; as well as robust monitoring and evaluation.

The World Bank suggests that Cambodia strengthens its institutions and governance to enable more coordinated and efficient urban development.

In its report titled ‘Urban Development in Phnom Penh’ released in December 2017, the World Bank noted that Phnom Penh and other cities will continue to develop in an uncoordinated and fragmented manner unless there is improved governance and effective institutions.

“Well-planned cities allow the socio-economic benefits of urbanisation to be fully harnessed and can create vibrant, liveable, urban spaces,” said Judy Baker, World Bank Lead Economist and one of the report’s authors.

“This is fully possible for Phnom Penh, but it will be a long-term process and will require a strong commitment from government, citizens and the private sector.”

While the World Bank has recommendations on how to realise the long-term vision of Phnom Penh’s Master Plan 2035, the fact that it has never been released to the public is perhaps the best indication of the challenges that lie ahead.

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