Hanoi (VNA) – Vietnam Electricity (EVN)’s Power Generation Corporation 1 (EVNGENCO1) said on March 8 that it has built a coordination plan to ensure coal supply for thermal power production.
Accordingly, the company will sign a contract to import this year’s first batch of 1 million tonnes of coal to serve the operation of Duyen Hai 3 Thermal Power Plant.
In March, EVNGENCO1 will work with subsidiaries of the Vietnam National Coal-Mineral Industries Holding Corporation Limited and the Ministry of National Defence’s Dong Bac coal corporation to ensure coal supply for its thermal electricity plants.
It will also sign a series of mid- and long-term contracts to make sure the operation runs smoothly in 2019 and the years following.
The plan looks to prepare for the peak months of dry season this year. Currently, the amount of domestic coal still meets production demand, however a stock shortage has been noticed.
EVNGENCO1 reported its electricity output at 2.53 billion kWh in February, up 27 percent year-on-year. Of the total figure, thermal power generated over 2.05 billion kWh, while hydropower produced 487 million kWh.
As thermal power accounts for the largest proportion of Vietnam’s energy production, the country is facing challenges to ensure a sufficient supply of coal for its plants in the coming years.
According to the Ministry of Industry and Trade, by 2020, Vietnam is expected to produce about 26,000 MW of coal-fired thermal power, accounting for 49.3 percent of the total electricity generation and consuming about 63 million tonnes of coal.–VNA
SOLAR Philippines Tarlac Corp. has secured the regulator’s approval to raise by 2% annually the P2.999 per kilowatt-hour (kWh) electricity rate it signed with distribution utility Manila Electric Co. (Meralco).
In an order promulgated on March 4, 2019, the Energy Regulatory Commission (ERC) has reversed its initial ruling that disallowed the annual price escalation after Solar Philippines presented evidence proving that even on the 20th year of the power supply agreement (PSA), the rate at P4.4577/kWh will still be the lowest among the previously approved applications for solar power plants.
“The Commission likewise took note that under [Solar Philippines’] proposal, the rate of return over the project’s 20-year term is only 0.05% which is much lower than the rate of return allowed by [it] in other applications,” the ERC said.
The regulator also noted that the project is not foreseen to earn any profit until several years from the start of operation. Denying the 2% annual escalation, which is part of the rate agreed by the contracting parties will deny Solar Philippines the opportunity to recover its investments in the project, the ERC said.
The ERC said a denial is deemed inconsistent with Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), which mandates the commission to “fix rates that will allow the recovery of just and reasonable costs and a reasonable return on rate base” for investors to operate viably.
The commission also said that its current policy in evaluating PSA applications is to arrive at the generation rate after employing the cost-based methodology. It said Solar Philippines’ proposed rate of P2.999/kWh “was found to be significantly lower” than the calculated generation rate computed by the ERC using the said methodology.
The ERC ruling comes after the regulator issued an order on Feb. 20, 2018 provisionally authorizing Meralco and Solar Philippines to implement their PSA at the agreed rate but without the annual adjustment or escalation.
Solar Philippines is the price challenger to an offer made by Citicore Power, Inc. to Meralco for solar power at a price of P3.7144/kWh and a 2% annual price escalation. Citicore did not match Solar Philippines’ offer of P2.999/kWh.
On June 29, 2018 Meralco filed a manifestation wherein it informed the ERC of Solar Philippines’ refusal to accept the February order because of the disallowed 2% annual escalation rate.
On July 3, 2018, Solar Philippines filed a motion for partial reconsideration wherein it said, among others, that even with the application of the annual escalation, the PSA rate is still significantly lower than the prevailing feed-in-tariff rate for solar energy at P8.69/kWh and the approved rates for other solar power plants.
Solar Philippines had said should the price escalation still be rejected, the company should instead be allowed to charge the levelized average rate of P3.7144/kWh, a price Meralco objected because it was not the one agreed during the price challenge process.
Solar Philippines also sought to move the timeline for the performance of its obligation under the PSA from December 2017 to February 2018. It also said that for the first 10 years of the PSA, and based on the ERC’s simulation, the rates range from P2.999/kWh to P3.6569/kWh — all of which are lower than the 20-year average of the PSA amounting to P3.7144/kWh.
The company said without the escalation, the agreement will be financially unviable to the prejudice of Solar Philippines and the consuming public.
Lopez firm First Gen Corporation can finally proceed with its long-planned liquefied natural gas (LNG) import terminal project that will be sited close to its gas-fed power generating facilities in Batangas.
“I’m happy to say that we have signed the NTP (notice to proceed), I signed it today (March 7) – this morning,” Energy Secretary Alfonso G. Cusi has announced to the media.
Energy Secretary Alfonso G. Cusi
He noted that First Gen’s partner – Tokyo Gas Ltd. Co. – in the proposed venture has also been closely watching the anticipated issuance of NTP to the LNG project.
“Tokyo Gas and also the Japanese government have been watching – pursuing this in any economic, ministerial meetings here and in Japan – that is always part of the subject matter,” Cusi said.
The energy chief expounded “last month, we were in Japan – together with Undersecretary (Donato) Marcos and other Cabinet secretaries, that again was taken up,” – referencing on the LNG venture of the Philippines.
As indicated, the Lopez firm and its Japanese partner are intending to spend more than US$1.0 billion in the LNG project; which was originally targeted for a capacity of 5.0 mtpa annually. Tokyo Gas has 20 percent equity in FGen LNG Corp which will be the project’s corporate vehicle.
Cusi explained the LNG import facility of First Gen will not have any “overlap of market” with the Tanglawan Philippine LNG that is now being advanced by Phoenix Petroleum Philippines Inc. of businessman Dennis Uy; China National Offshore Oil Corporation (CNOOC) and state-run Philippine National Oil Company.
“There will be no overlap of market, otherwise, we would not have approved it. That was approved because they have a different business model and they can stand and live up to their business model,” the energy chief stressed.
First Gen has four power plants being fed with gas as fuel – including the 1,000-megawatt Santa Rita; 500MW San Lorenzo; 414MW San Gabriel and 97MW Avion plants.
The timing of the gas import facility’s completion is also year 2023 or prior to the lapse of the service contract of the Malampaya consortium – the same timeframe when gas production at the field is also anticipated to be on declining pace.
Jetion has won a 50MW order from Helio Power for the Thuan Minh 2 Solar Farm in Vietnam.
The firm’s subsidiary, CNBM New Energy, will serve as the engineering, procurement and construction (EPC) contractor. CNBM and Helio Power signed a 500MW cooperation agreement, of which this deal represents the first portion.
“We are proud to build a project that will showcase the huge potential of utility-scale solar in Vietnam. The region’s booming population, strong economic growth, and abundant sunlight represent an exciting opportunity for solar,” said Phan Thanh Dat, general manager at Helio Power.
The project will use the firm’s 72-cell poly modules. Grid connection is targeted for June 2019, ahead of a decline in the country’s feed-in tariff (FiT).
“Jetion Solar has worked tirelessly to build and maintain its reputation as a reliable module supplier in the utility market,” said Honglei Zhao, SVP of Jetion Solar. “It is another demonstration of our world-class capabilities and service to our international customers.”
JOHOR, Malaysia/JAKARTA (Reuters) – On the southernmost edge of the Asian landmass and on the shores of the busy shipping lanes of the Singapore Strait, Malaysia’s Petronas is starting up a state-of-the art petroleum processing hub, called RAPID.
FILE PHOTO: The completed Refinery and Petrochemical Integrated Development (RAPID) oil refinery at Pengerang Integrated Petroleum Complex in Pengerang is seen flaring gas, Malaysia February 26, 2019. REUTERS/Edgar Su/File Photo
The huge complex in Malaysia’s Johor province is currently testing its systems, running crude oil through its fuel processing units and labyrinth of pipes and producing large exhaust gas fires from its flare tower. The flames are clearly visible for miles around, including on Indonesian islands just across the narrow strait.
The 300,000 barrels-per-day (bpd) RAPID or Refinery and Petrochemical Integrated Development will come onstream around May. Among other customers, it will sell fuel to Indonesia, shining a spotlight on the contrast between Petronas and its Indonesian peer Pertamina.
Both are state-owned oil companies that dominate the energy sector in their own nations. But their fortunes have markedly diverged because Malaysia has allowed Petronas to follow its own growth path, while Pertamina is hobbled by Indonesian government intervention and bears the burden of a subsidy program.
“Lots of people see Petronas and Pertamina as twin companies. But that’s not really the case. Petronas is very much a commercial company, almost like an independent oil company while Pertamina is driven more by government policy and agenda, a national oil company,” said Andrew Harwood, research director for Asia/Pacific upstream oil and gas at energy consultancy Wood Mackenzie.
For Petronas, RAPID marks a milestone as it prepares for a future with less crude oil output while serving the region’s booming fuel demand.
RAPID, being built in collaboration with Saudi Aramco, has cost around $15 billion and is one of Petronas’ biggest ever investments. It is part of an even bigger Pengerang Integrated Complex (PIC) being developed by more than 50,000 workers at an estimated cost of more than 100 billion ringgit ($24.61 billion), and which will eventually also include a deep-water oil and a liquefied natural gas (LNG) import terminal.
Petronas declined to speak with Reuters about the project’s details but has said RAPID “will position Malaysia to capitalize on the growing need for energy and petrochemical products in Asia in the next 20 years … pushing our country into a new frontier of technology and economic development.”
Like Malaysia, Indonesia is struggling to keep oil production up just as domestic fuel demand soars.
Once a member of the Organization of the Petroleum Exporting Countries (OPEC), Indonesia has seen its crude oil output dwindle from a peak of 1.6 million bpd in the early 1990s to below 1 million bpd.
It is now Southeast Asia’s biggest fuel importer, importing more than 400,000 bpd of last year, at a cost of around $10 billion a year at current prices.
LITTLE INVESTMENT
Yet, the last time Indonesia built a major refinery was around 25 years ago.
A Refinery Development Master Plan (RDMP), launched in 2014 to double refinery output to over 2 million bpd within a decade, was confirmed last week by Pertamina’s chief executive Nicke Widyawati.
“Starting from 2021, we will invest around $7 billion per year as these refineries (developments) are in progress,” Widyawati said.
But many of Indonesia’s refinery projects have suffered set-backs, like the delay in the upgrade of a refinery in the central Java area of Cilacap from 348,000 to 400,000 bpd. Due to be completed in 2021, it has been pushed back to 2023.
Fajar Harry Sampurno, the deputy minister for state owned enterprises, said Cilacap’s delay was because the land for the site had yet to be acquired.
Saudi Aramco has also expressed interest in Cilacap, but Sampurno said “Aramco is still waiting” to invest as it first wants the land rights to be resolved.
Sampurno said such delays were causing Pertamina “big losses.”
But Pertamina itself isn’t investing enough.
The company says its capital spending target would be $4.2 billion to $4.5 billion this year, down from an earlier target of $5.5 billion.
On the other hand, Petronas raised its investment by 10 billion ringgit ($2.46 billion) to 55 billion ringgit in 2018, and spending is expected to rise again this year.
Once RAPID is completed, Petronas would likely start looking for a next big development project, possibly as an investment into overseas production or even in form of corporate acquisitions, said Harwood from Wood Mackenzie.
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“NO WAY” TO NET EXPORTS
The consultancy estimates Petronas, which has invested far more than its Indonesian counterpart in exploration and acquisitions, will produce 1.6 million barrels per day of oil equivalent this year, which is a unit to describe joint oil and gas production, against vs 0.8 million barrels of oil equivalent by Pertamina.
Oil and gas reserves are estimated at 7.8 billion barrels of oil equivalent for Petronas and at 5 billion for Pertamina by Wood Mackenzie.
Sampurno, the Indonesian deputy minister, told Reuters there was “no way” Indonesia could become a net oil exporter again.
He said Pertamina should expand its refining capacity to meet booming demand, emulating Petronas.
But the Indonesian state-owned major, described by the government as an “agent of development”, is struggling to keep up the required spending to finance oil and gas production and build the infrastructure to meet rising domestic fuel consumption.
It has also to foot the bill for Indonesia’s fuel subsidies. Ratings agency Standard & Poor’s says this cost Pertamina $1.5 billion-$2 billion in lost profit last year.
While Malaysia also subsidizes fuel, the cost is shouldered by the government, not Petronas.
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Pertamina’s profits were under 5 trillion rupiah ($352.73 million), the lowest in over a decade, in the first half of 2018. Full 2018 results are yet to be announced.
Petronas, by contrast, achieved 26.6 billion ringgit ($6.54 billion) profit during that time, company data showed.
As President Joko Widodo seeks re-election this year, it seems unlikely that Indonesia’s oil subsidies will be rolled back any time soon.
Chief executive Widyawati, Pertamina’s third CEO in as many years, has made her thoughts clear on subsidies.
“The regulation is clear,” she told reporters last month, adding fuel “intervention is good”.
Should the opposition win, some change may come.
“If we free Pertamina from political intervention, I am sure the profits will return,” opposition vice presidential candidate Sandiaga Uno told Reuters.
Wood Mackenzie estimates Pertamina needs to boost spending to $6 billion in 2022, from just over $4 billion last year, just to maintain output. Pertamina’s refinery plans and debt servicing will require another $23 billion up to 2025.
“Indonesia and Pertamina could capitalize on the discovery made last week by Repsol, which will attract attention from explorers. If they can capture some of this interest, Pertamina may find additional partnership opportunities,” said Max Petrov, a senior corporate analyst at the consultancy.
A consortium led by Spain’s Repsol last week announced finding new gas resources in South Sumatra in Indonesia, which Repsol claims to be among the 10 largest made in the world over the past year.
A report from the International Institute for Sustainable Development (IISD) stated that during the 2014-2016 fiscal years, revenue from upstream oil and gas sectors stood around US$16 billion, or 18% of the government’s total revenue. 14% of the revenue, however, was then channelled out for fossil fuel subsidies. The IISD recommends the government cut its various energy subsidies to support the development of clean energy. Reforms in energy subsidies could have a positive impact on the country’s budget and promote sustainable economic growth.
In 2014, the government cut fuel subsidies and saved around Rp.200 trillion (US$16 billion). The savings were re-allocated to infrastructure projects and other social programs. Today, the government could use savings from fuel subsidy cuts to fund the transition to green energy.
Subsidy cuts could also help diversify Indonesia’s economy. This could take the form of investing in infrastructure and support a transition to clean energy in the productive sectors, creating sustainable jobs and reducing the country’s dependence on fossil fuels.
Clean energy suits the country very well
Indonesia has an abundance of clean energy resources. It is estimated that the country has a total of 442 Gigawatts (GW) of renewable energy capacity. However, only 9.4 GW (2%) has been installed. Geothermal is one area ready for investment. Indonesia has around 29GW of geothermal capabilities, about 40% of the world’s total geothermal reserves. Currently, the country has installed just 1,925 MW of geothermal power capacity, leaving plenty of room for expansion.
Indonesia’s geothermal resources offer an opportunity to increase electricity supply to areas with rising demand, such as in Java and Sumatra, as well as alleviate poverty through rural electrification in the eastern part of the country.
Renewable energy currently makes up 13% of the total electricity produced in Indonesia. Whereas, coal-based sources accounted for more than 50% in 2018. Indonesia is far behind other neighboring countries when it comes to renewables capacity per capita with only 35 Watts per capita. Laos currently has 400, Malaysia more than 200, and Thailand more than 100. Even the Philippines generates more renewable energy per capita, with around 60 Watts per citizen.
Jokowi has flirted with renewable developments. In July, the government launched two wind power plants in South Sulawesi. But with the majority of Indonesia’s clean energy potential remaining untapped, the country is leaving opportunities to spearhead a green energy revolution unexplored.
There are significant challenges to developing the renewable energy sector
After the Paris Summit Agreement, Indonesia set a target of sourcing 23% of its energy from renewables by 2025. However, the country is struggling to meet its goal. Several big projects around the country have stalled and there are no new significant renewable energy projects on the horizon.
There are fundamental problems as to why this is the case. Firstly, businesses processes prevent projects from receiving adequate financing. Frequent changes in the regulatory framework and poor implementation have created a climate of confusion and uncertainty which has spooked developers and investors. This unfavorable business climate has left the clean energy sector woefully underfunded.
Additionally, the fossil fuel industry wields significant political power. It has played a dominant role in Indonesia’s economy for more than a decade and accumulated vast political capital. With the energy market dominated by the fossil fuel industry, it is no surprise that renewable energy is struggling to find its place.
Government action can help reduce obstacles such as funding and inconsistent regulations
Declining revenues has exposed vulnerabilities in Indonesia’s energy market. Depleted revenues, if left unchecked, could lead to economic disruption and political instability. The country needs to diversify its energy market and adapt to new challenges. Renewable energy is the future, and with the rich natural resources Indonesia possesses, the country is well-placed to embark on a green energy revolution.
Declining fossil fuel revenues offer an opportunity to reduce subsidies and re-allocate that money to renewables. As proposed by the Fiscal Policy Agency (BKF), subsidy reform, the introduction of a fossil fuel tax and streamlining business procedures to attract international investors would provide a solid financial platform to mount a green energy drive.
Collecting taxes from the fossil fuel industry will be a challenge. Introducing regulation and implementation measures will require standing up to the fossil fuel lobby and curbing its political influence. But Indonesia has the opportunity to strengthen its economy and build a greener, more sustainable future.
The Royal Group of Cambodia and partners China Southern Power Grid and China Huaneng Group on Tuesday said they will continue work on a project to build high voltage transmission lines in the Kingdom.
The project will contribute to the transmission network in the country’s northeast and enable energy exchanges with Vietnam and Laos.
A pre-feasibility study was started by the three companies in 2017 but has not concluded yet.
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Representatives of the company expressed their intention to move forward with the project during a meeting Monday with Ith Praing, secretary of state at the Ministry of Mines and Energy.
Victor Jona, director general of the energy department, told Khmer Times that the companies are still working on the pre-feasibility study.
“The project focuses on building transmission lines in the northeast that enable the country to bring in electricity from neighbouring countries when we have a shortage, or to export it when we have a surplus,” he said.
In 2017, China Southern Power Grid and the Royal Group of Cambodia signed a memorandum of understanding on Investment and Development of the National Power Grid of Cambodia.
Volvo has revealed a pioneering, driverless electric bus that is set to undergo testing, before being put into operation on Singapore’s roads.
The 12-metre long bus, AB 7900, has a capacity of 93 people, and is able to carry 57 standing passengers as well as those seated.
Unlike regular buses used in public transport networks worldwide, this electric vehicle produces zero emissions and uses 80 per cent less energy than a diesel bus of the equivalent size.
The bus produces zero emissions and uses 80 per cent less energy
“We are very proud to be showcasing our electric bus featuring autonomous driving technology. It represents a key milestone for the industry and is an important step towards our vision for a cleaner, safer and smarter city,” said Volvo Buses president Håkan Agnevall.
Designed in collaboration with Singaporean university Nanyang Technological University (NTU), the driverless bus uses sensors and navigation controls that are operated by artificial intelligence.
“The journey towards full autonomy is undoubtedly a complex one, and our valued partnership with the NTU and the Singapore Land Transport Authority are critical in realising this vision, as is our commitment to applying a safety-first approach,” said Agnevall.
The bus uses sensors and navigation controls operated by artificial intelligence
The operating system is backed up by cybersecurity measures to ensure its safety on public streets.
The sensors and navigation controls include light detection and ranging sensors (LIDAR), stereo-vision cameras that capture imagery in 3D as well as a global navigation satellite system.
This satellite system is similar to a regular GPS but uses multiple data sources to give pin-point accuracy to the nearest centimetre.
It runs in parallel with an “inertial management unit” which measures the bus’ speed and movement. This will improve the bus’ navigation when going over uneven terrain and around sharp bends, ensuring a smooth ride for passengers.
They include light detection and ranging sensors (LIDAR), plus stereo-vision cameras that capture imagery in 3D
Two buses are currently undergoing tests in the city state, one on the NTU campus and the other at a bus depot operated by the Singaporean public transport operator SMRT. They will play a key role in determining the roadworthiness of the vehicles.
“The world’s first 12-metre autonomous bus will shape the future of public transportation by promoting a transport system that is safe, efficient, reliable and comfortable for all commuters,” said NTU president Subra Suresh.
“It will soon be tested on NTU’s smart campus, which has been a living testbed for autonomous vehicle technologies since 2012,” he continued.
