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  • Energy Efficiency
23 February 2019

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  • Philippines

MANILA, Philippines — With the recent spike in electricity and oil prices, the Philippine Energy Efficiency Alliance (PE2) is seeking the passage of the Energy Efficiency & Conservation (EE&C) Act, which may temper the increase in prices.

PE2 president Alexander Ablaza said delays in the passage of the bill pushes back the effects of mandatory EE&C implementation, specifically dampening the rise in energy prices.

The bicameral conference committee has approved the EE&C Act and is in the process of transmitting the measure to the President for approval.

“Our energy market badly needs to arrest the business-as-usual escalation of electricity tariff and fossil fuel prices, and a further delay in the implementation of energy-saving projects, programs and investments will only serve to delay their decelerative effects on energy price increases,” Ablaza said.

He said a scaled-up energy efficiency program slows energy price escalations because of its ability to defer new capital expenditure requirements for energy infrastructure capacity upgrades from generation, transmission and distribution, and also reduce the forecasted rise in dependence on imported energy.

Ablaza also noted that every month of delay deprives the entire economy from benefiting optimally from the P37.8 trillion in energy savings estimated through 2040.

“This means that households, small businesses, buildings, industries, public facilities and other energy end-use sectors stand to collectively save less than P 37.8 trillion in avoided energy purchases between now and 2040 if the passage of the EE&C Act slips beyond this first quarter of 2019,” he said.

The Philippines has had no energy efficiency law for over 28 years, and is the last among the ASEAN nations to enforce EE&C through legislation and catalyze EE&C investments through fiscal incentives.

“The EE&C bill had a 28-year history of being refiled since the 8th Congress. The country cannot afford to prolong this delay,” Ablaza said.

Last month, the bicameral conference committee convened to reconcile the disagreeing provisions of Senate Bill 1531 and House Bill 8629 and approved the EE&C Act.

The bicameral committee agreed to re-anchor the fiscal incentives provision on existing Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, as amended.

It, however, considered the last-minute recommendation of the Department of Finance (DOF) to reduce the period of mandatory inclusion of energy efficiency projects in the investment priorities plan of the Board of Investments from the House-proposed 15 years to an adjusted 10 years.

The Senate panel said this adjustment reflects a reasonable balance between the incentive rationalization objectives of DOF and the requirements of private investors.

  • Energy Cooperation
22 February 2019

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  • Philippines

PRESIDENT Duterte is mulling over how to move forward with the country’s 29 deals with China, especially the country’s agreement on energy cooperation in oil and gas development in the West Philippine Sea. He has asked Beijing to “give me a week” to study the matter.

Chinese Ambassador Zhao Jianhua and the President had a “productive conversation” late Wednesday on the memorandum of understanding (MOU) signed by both countries in November during Chinese President Xi Jinping’s visit, Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo told the BusinessMirror.

Zhao’s courtesy call on Duterte in Malacañang lasted for about one hour and a half, Panelo said.

In a Palace briefing, Panelo said Zhao “suggested to the President” if he could already implement the MOUs with respect to the countries’ shared interest.

Asked for clarification by the BusinessMirror, Panelo said Zhao inquired on when the MOU can be implemented since both countries have already have signed agreements to cooperate.

“[He is] asking because your basis is we already agreed. When can we implement this [MOU] because your basis is we already agreed? When can we implement these so that we can already both get benefits,” Panelo said in Filipino, paraphrasing Zhao. Panelo said Duterte asked for time to ponder on how will they go about the MOUs.

“The President said, give me a week and I’ll study,” he said.

‘Not impatient’

Panelo denied that China is growing impatient about the progress of the agreements.

He said there were no particular orders issued by the President as a result of the meeting.

And, according to Panelo, the issue of he maritime rescue center being put up China in the Spratly Islands was also not brought up during the courtesy call.  Moreover, Panelo said, Zhao extended an invitation to Duterte to attend the Belt and Road Forum in late April this year.

After denials that an oil-exploration deal is in the works in time for Chinese President Xi’s visit, the Philippines and China signed an agreement on cooperation on oil and gas development in the West Philippine Sea, along with at least 28 other accords last November.

  • Others
22 February 2019

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  • Philippines

MANILA, Philippines — Former Senate President Juan Ponce Enrile has warned limitations in Philippines’ energy, saying “there is a need for national energy independence.”

“I calculate about 60-70 percent of our energy requirements are imported,” Enrile said in a fourth episode of Itanong Mo kay Mang Johnny, a multiplatform phone-in show aired on Radyo Inquirer and Inquirer 990 Television.

“We don’t have oil, we don’t have natural gas. We do have geothermal and hydropower, as well as solar and wind but these last two contribute very small percentages,” he added.

Enrile asserted that after the “first half of the century, oil could very well reach $150 per barrel.”

The senator added that even China is faced with the same “precarious situation given that it imports 80 percent of its fuel.”

Enrile also noted that the Philippines is still developing its renewable sources of energy.

“Wind and solar each probably contribute only one percent And solar requires a lot of land, eventually you have to decide whether you will use land to grow food or produce energy,” Enrile said, referring to the limitations of Philippines’ source of energy.

Enrile also took issue with government’s lack of fund to bankroll oil explorations.

“There has really been no government neglect of the energy crisis. There may have been some inadequacies, but the real problem is the lack of money. We have to open the country to the necessary capital to explore all our resources. We may have oil here in the country, but we don’t have the money (to explore for it),” he said.

ROTC needed for national defense

Enrile also urged the proposed return of Reserve Officers’ Training Corps (ROTC), saying it would boost the country’s national defense.

“Our first obligation is to give up our life for our country. No one else will protect you, your family and your children except yourself and the people,” he said.

When asked about his opinion on improving the  country’s armed forces, Enrile called for a stronger Navy and Air Force in the Philippines.

“We need a strong Navy. We need a strong Air Force. Our ground forces are sufficient, but we don’t have the air power for a protective umbrella over the Phillippines. We still don’t have a Navy that can face the Chinese Coast Guard on equal terms,” he said.

  • Others
  • Renewables
22 February 2019

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  • Vietnam

It is expected that power plants in Mekong Delta will have total electricity capacity of 18,224 MW, or 7.6 times bigger than Son La hydropower plant, the biggest in Southeast Asia (2,400 MW).

These include O Mon 1, with the capacity of 660 MW and output of 3.6 billion kwh per annum, which consumes 1 billion cubic meters of gas, O Mon 2 (720 MW), O Mon 3 (700 MW) and O Mon 4 (720 MW). The Ca Mau gas-fired thermopower plants 1 & 2 have capacity of 1,500 MW.

The Duyen Hai Power Center alone has total capacity of 4,308 MW and investment capital of $5 billion, with three operational plants, namely Duyen Hai 1 (1,245 MW), Duyen Hai 3 (1,245 MW) and expanded Duyen Hai 3 (688 MW). Other projects are under implementation, namely Song Hau (1,200 MW), and the Long Phu, and So-called Trang thermopower center (4,400 MW).

Under the latest national power development plan, there will be 14 coal-fired thermopower plants in Mekong Delta, of which three are in operation. Some coal-fired thermopower projects were added to the plan recently, raising controversy. 

Under the latest national power development plan, there will be 14 coal-fired thermopower plants in Mekong Delta, of which three are in operation. Some coal-fired thermopower projects were added to the plan recently, raising controversy.

Tan Phuoc 1 & 2 in Tien Giang province and Long An, designed to be located near HCMC, are feared to have negative impact on the environment and people’s lives.

Coal-fired power plants

Three big problems are anticipated if developing coal-fired power plants in Mekong Delta, including water pollution, air pollution and negative impact from fly ash & slag.

Scientists say coal-fired plants consume a huge volume of water. The 14 power plants in Mekong Delta would need about 70 million cubic meters of water a day. Meanwhile, hot water from plants would destroy under-water ecosystems, harming the local fishery and aquaculture.

It is estimated that all the plants would consume 64 million tons of coal each year and discharge 16 million tons of ash & slag. How to deal with the big volume of ash & slag remains an unsolved problem.

Green turbine

Dr Tran Huu Hiep, in his article on Tai Chinh Viet Nam, pointed out that green turbines are the best solution to the electricity generation and environmental protection in Mekong Delta.

He emphasized that shifting from using brown to green power is a growing trend all over the world. Vietnam has great potential to develop renewable energy. The production cost of wind power has decreased by 23 percent over the last seven years and will become very competitive by 2020.

  • Oil & Gas
22 February 2019

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  • Thailand

BANGKOK, Feb 22 (Reuters) – Thai energy company PTT Pcl plans to invest up to 354.7 billion baht ($11.3 billion) over the next five years to boost its natural gas portfolio and energy infrastructure, a senior executive said on Friday.

PTT plans to invest 167.1 billion baht from 2019 to 2023, of which 44 percent will be allocated to expand its gas business and firm up infrastructure, Arawadee Photisaro, Vice President for Corporate Strategy, told reporters at a news conference.

“We want to become a global LNG portfolio player … and build an LNG value chain,” Arawadee said, adding that its upstream arm, PTT Exploration and Production Pcl, would acquire assets while other units would focus on building receiving terminals, liquefaction and regasification plants.

Natural gas is becoming a primary energy source for Thailand because it is easier to transport, cleaner and has lower costs, she added.

PTT also set aside an additional 187.6 billion baht to invest in new technologies and expand its core business should opportunities arise, Arawadee said.

“We have to build energy security for the country and also add value to from our petrochemical products,” she said.

Other investment areas include expansion of petrochemical products capacity and its electricity business.

PTT on Thursday reported net profit of 119.7 billion baht for 2018, down 11.5 percent from a year earlier. Gas accounted for about a third of operating income, bringing in 76 billion baht, up 12.8 percent. ($1 = 31.3100 baht) (Reporting by Chayut Setboonsarng Editing by David Goodman)

  • Renewables
22 February 2019

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  • Indonesia

The government has been criticized for issuing a regulation on photovoltaic solar panels, which has discouraged homeowners and businesses from installing and using the environmentally friendly energy source.

Instead of allowing consumers to enjoy lower electricity bills, the regulation has forced them to pay more, according to the Indonesia Rooftop Photovoltaic Users Association (PPLSA).

PPLSA chairman Yohanes Bambang Sumaryo said the electricity bills of his association members had jumped 50 to 100 percent.

“The new regulation on electricity export-import has caused our electricity bills to soar by up to 100 percent. It makes the PV solar panels for residential use unattractive,” he said recently.

The regulation is Energy and Mineral Resources Ministerial Regulation No. 49/2018 on the utilization of rooftop solar panels for state electricity company PLN customers in homes or in industry.

Under the regulation, PLN only pays for 65 percent of the electricity produced by a solar panel. For example, if one panel produces 100 kilowatt hours (kWh), PLN only pays for 65 kWh.

Given the unfair stipulation, Yohanes said, some association members had decided to go “off-grid” by disconnecting from PLN.

“They’ve taken the decision regardless of loss and they are not reporting to PLN either. Even though we have to invest more to realize it [using the off-grid system],” he said, referring to the additional investment required to buy new batteries to store the electricity once a user goes off-grid.

He said around 300 homes had decided to go off-grid.

Based on PPLSA estimates purchasing a battery could increase the total cost of installation by around 50 percent.

Moreover, Yohanes said the obligation to report to PLN for those who wanted to install solar panels in their homes also discouraged potential users.

“The requirement is that only certified photovoltaic suppliers or service firms can submit the permit to install PV panels to PLN,” he said, adding that there were fewer than 10 such companies across the country.

In short, solar PV panel owners who wish to sell electricity to PLN must get approval from the state utility on administration and technicality issues.

They then must obtain a certificate indicating that the installation is good to operate (SLO), which is issued by a state electricity inspection institution (LIT).

Besides the hassle of the administration process for using solar PV panels, there is also the high interest rate charged by banks to finance the purchase of the solar panels, says Yohanes.

“High interest rates for the commercial sector of around 10 percent are a disincentive for customers looking to buy rooftop solar panels,” he added.

Previously, Miroslav Dijakovic, the deputy for renewable energy from the European Business Chamber of Commerce in Indonesia (EuroCham), said the regulation still did not accommodate small customers of PLN.

“This is not the best deal for current PLN small customers,” he said in an e-mail.

However, he noted an improvement in that PLN’s business customers are included in the regulation. “But it’s welcome that now we can export no matter what size the solar rooftop system, and PLN business customers are included,” he added.

Responding to the criticism, the Energy and Mineral Resources Ministry defended the regulation, saying it would keep the regulation in place for at least a year and then the ministry would evaluate the implementation.

The ministry’s directorate for renewable energy Rida Mulyana said the association should only compare the current electricity bills with the situation when they were not using solar panels at all.

“It’s true that the electricity bill will be higher. However, our survey found that a lot of people want to install solar panels [since the ministerial regulation issuance],” he said.

Under the previous regulation, PLN would pay the full amount for power produced by solar panels, not 65 percent.

Regarding the complaint on the “hassle” of installing solar panels, Rida said the government needed to ensure the safety of any installation by only accepting certified solar panel suppliers.

“If the association complains about the lack of certified suppliers then it should work on it, see it as an opportunity to do business,” he said.

Based on the latest government data, the country has only installed 0.09 gigawatts peak (GWp) of solar PV power plant or 0.02 percent of the total potential installed capacity of 207.8 GWp.

  • Oil & Gas
22 February 2019

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  • Indonesia

AKARTA, Feb 22 (Reuters) – Indonesian state energy company PT Pertamina is planning capital expenditures of $4.2 billion this year and will raise it to $7 billion in two years as part of plans to double its oil refinery capacity, chief executive Nicke Widyawati said.

Pertamina is under pressure from the government to expand its downstream production to reduce imports of refined oil products, which creates a trade deficit that weighs on the Indonesian rupiah.

“Starting from 2021, we will invest around $7 billion per year as these refineries (developments) are in progress,” Widyawati said in a meeting with journalists late on Thursday.

Pertamina plans to double its refining capacity to 2 million barrels per day (bpd) in 2026 from around 1 million bpd currently, Widyawati said, to meet national fuel demand of around 1.4 million bpd.

Pertamina expects to import 351,000 bpd of gasoline this year, up from 324,000 bpd in 2018, according to a company presentation during the meeting.

The company is currently working on at least seven refinery projects, including the new Bontang and Tuban refineries and the upgrading of the Balikpapan and Cilacap plants.

To finance the investment, Finance Director Pahala Mansury said Pertamina has the capacity to raise funds through borrowing, but the company is actively looking for partners for certain projects.

“We are looking for investment partners. These are big investments and the return may take a while,” Widyawati said.

Meanwhile, Pertamina is targeting $58.85 billion in revenue in 2019, up from $56.06 billion in 2018. (Reporting by Wilda Asmarini; writing by Fransiska Nangoy; editing by Christian Schmollinger)

  • Bioenergy
21 February 2019

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  • ASEAN

Southeast Asia’s urban population is projected to rise to nearly 400 million by 2030, requiring significant investment in waste management to cope with the increase in garbage. The growth in electricity demand is also prompting countries to more than double generation capacity by 2040.

One obvious and quick solution to these two needs is waste-to-energy, a catch-all for different technologies that allow countries to get rid of waste and generate electricity at the same time.

Traditional waste-to-energy methods like incineration tend to be unpopular with communities because of the associated health and environmental impacts.

But policymakers in Southeast Asia have looked at China, which has successfully rolled out waste-to-energy and now has the most capacity globally, and decided it is worth writing into national waste management plans. As countries decide what type of technology to use, it is vital that they learn from China’s rapid adoption.

Incineration is the cheapest and best known waste-to-energy technology, but countries should consider other types, as well as plan for the broader policy changes that are needed to make waste-to-energy a good long-term investment.

A burning opportunity

As living standards in the region rise, people will create more municipal solid waste from their homes, offices, shops and other public places. This is usually a mix of food leftovers, paper, plastic packaging, clothing, metal, glass and in some cases sewer sludge.

Most Southeast Asian countries depend on landfills to store this waste but there are problems with this approach.

A recent study shows that municipal solid waste in China, Thailand, Vietnam, India and Pakistan could more than double to over 600 million tonnes between 2015 and 2025. While landfills have been the cheapest method of disposal, the rapid growth of waste will be hard to handle. High demand for land near urban centres means that garbage is often packed into dense landfills, and there isn’t a system in place to deal with the resulting mountains of trash.

The costs of poor waste management are high: landfills use lots of space and pollutants can leach into the soil and surface water, harming the environment and people’s health. Gas from decomposing organic materials in landfills is a serious issue, forming about 11 per cent of all global methane emissions. Approximately 90 per cent of the world’s plastic waste is not disposed of properly, not even making it into landfill, which is one reason plastic is the largest single contributor to ocean pollution.

Incineration is the second most common way to deal with waste and seems like an obvious choice: it eliminates much of the physical burden of waste while producing much-needed energy.

In reality, waste-to-energy is complicated. While incineration eliminates physical waste, to be efficient it also requires pre-sorting materials to remove organic and non-flammable materials.

When well-managed, waste-to-energy can reduce the need for physical waste storage; manage the impacts on air, ground, and water pollution better than landfills; and utilise a domestically-available and sustainable resource for electricity production.

But in many cases incineration plants have not been well managed. Most emerging economies have limited or even no waste sorting processes. Ineffective pre-sorting reduces the cost effectiveness and efficiency of all waste-to-energy technologies. For incineration plants, this means the temperature does not get high enough to eliminate key pollutants. Even when well-managed, incineration plants still leave ash that needs to be disposed of safely.

Other commercial technologies largely depend on producing gas from waste. Gasification plants use plastic and organic solid waste in a chemical conversion process that creates and burns synthetic gas at high temperatures. Landfill with gas capture, fermentation, and anaerobic digestion all utilise controlled and catalysed processes of decomposition to generate methane and biogas from waste materials. These gases can be burned and utilised much like natural gas, and are generally more efficient than incineration.

Current situation in Southeast Asia

Thailand and Indonesia provide a useful snapshot of the difficulties faced by countries in Southeast Asia eager to utilise waste-to-energy.

The Thai government has established subsidies and tax incentives for various waste-to-energy plants, including incineration, gasification, fermentation and landfill gas capture. Installed capacity currently stands at 203 megawatts.

This is likely to grow, as licenses for up to 500 megawatts of waste-to-energy plants have already been granted and Thailand’s next Power Development Plan for 2018-37 may raise the license limit.

But a lack of waste sorting means the industry has faced a major issue with incineration plants. The trash in Thailand is too full of organic and other non-flammable materials so incineration plants cannot reach the high temperatures necessary to produce electricity and avoid toxic emissions and ash by-products.

This has led some local communities and civil society groups to protest over pollution and health concerns. Some incineration plants have also sought to offset the economic losses from inefficiently sorted local waste by illegally importing better-sorted trash.

Indonesia has faced similar challenges. Despite high-level government support for waste-to-energy in the face of serious waste management challenges and a biomass and waste energy target of 810 megawatts by 2025, few projects have moved ahead.

Progress has lagged because of a public backlash against incineration projects. Protests have been widespread, and in 2018 Indonesia’s Supreme Court ruled that incineration of waste is against the law because it produces hazardous pollutants. But the government is pushing ahead regardless.

Learning from China

China can serve as a case study to help other countries identify the most sustainable way to move ahead with waste-to-energy because it has rapidly rolled out technologies while still developing.

Europe and Japan may have the most cutting-edge and efficient technologies, but the waste mix they process is quite different from that in emerging economies. China’s situation is far more comparable. Like other emerging economies, its waste tends to be “wet” – including both recyclable materials and organic waste like food waste and sewer sludge – and of low caloric value for burning.

China has made some progress towards utilising wastewater and other organic matter to produce biogas, but most installed capacity is from waste incineration. China had 7.3 gigawatts of energy production across 339 power plants in 2017. This is expected to grow to 10 gigawatts and 600 plants by 2020. The plants are primarily developed as a waste management solution, with energy a co-benefit.

There are three lessons that Southeast Asian countries can learn from China’s experience:

First, incineration works as a short-term solution to manage the waste crisis, but in the long-term emerging economies must establish effective waste sorting systems. By separating plastic and metal recyclables, organic materials and other materials, countries can use the best waste-to-energy technologies. A lack of sorting in China has led to a “wet” waste mix.

Second, moving beyond traditional incineration is important for sustainable operation of the plants and effective use of resources. China has successfully expanded waste-to-energy because it developed circulating fluidised bed technology, which is better suited for burning “wet” waste.

According to Jennifer Turner from the Wilson Center’s China Environment Forum, 46 cities around China are experimenting with different methods of waste management in an effort to become “Zero Waste Cities”. Some are considering methane capture from sludge. Sludge doesn’t have enough organic material on its own to produce methane, but combining it with other food waste and feeding it into an anaerobic digester is far more environmentally friendly and productive than incinerating it.

Both of these innovations could have valuable applications in urbanising Southeast Asia. “There’s no single green bullet to solve China’s waste problem. Other countries should look to China and see the experimentation strategy as a lesson,” says Turner.

Finally, even China has faced environmental pushback over the impacts of waste-to-energy. There is debate over the extent to which traditional incineration and other waste-to-energy technologies will meet future needs. Many environmental experts have critiqued the transparency around pollutants from waste-to-energy plants inside China.

Given the broad challenges that China faces with monitoring environmental and health impacts from industrial processes, it is no surprise that protests from local communities have been a common response as waste-to-energy. Similar protests in Indonesia and Thailand show that this challenge is universal.

China’s experience – and potentially investment – can help emerging economies in Southeast Asia manage rapid growth in waste through careful and strategic use of traditional incineration along with other gas-based waste-to-energy plants. But in the long run, they will need to adopt other technologies and improve waste-sorting.

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