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Electricity/Power Grid

Vietnam set to increase power supply to meet rising demands

23 March 2019

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Vietnam

According to Takimoto Koji, chief representative of the Japan External Trade Organization (JETRO) in Ho Chi Minh City, Japanese investors are concerned as JETRO has been recently announced that Vietnam could face a power shortage by 2022.

However, the investors can feel relieved as experts believed Vietnam would increase coal-fired power sharply over the next decade to meet the local demand.

Daine Loh, power and renewables analyst of Fitch Group’s Fitch Solutions Macro Research, forecast coal power generation will reach 50.5 percent of the total consumption power mix by 2028, with gas at 22.5 percent, hydropower at 22.8 percent and non-hydro renewables at 3.8 percent.

He explained this is due to relatively slow supply growth from traditional sources of energy such as hydropower and natural gas, with the government set to turn to coal to meet the surge in demand for power.

According to Daine, traditionally, Vietnam has relied on hydropower and natural gas for its power generation, but there are several obstacles to see continued growth in these two sectors.

Firstly, hydropower potential has already been almost fully exploited at present. Furthermore, recent droughts and decreasing water supplies highlight the threats facing Vietnam’s hydropower generation output reliability.

Secondly, domestic gas reserves are depleting and will not sustain a substantial ramp-up in gas power generation over the longer term, Daine said.

“As a result, we expect the government to turn largely to coal power to meet Vietnam’s increasing power demand, which stems in particular from an expanding industry and manufacturing sector, in order to support continued economic growth. Rapid urbanization and government efforts to up electrification levels to 100 percent will further boost electricity consumption growth rates.”

Sharing the view, power analyst Nguyen Canh Nam from the Vietnam Energy Association, said coal-fired power would still play a key role in the country’s electricity industry in the coming years.

Considering the country’s domestic coal resources, the ability to import coal and the level of greenhouse gas emissions, it is necessary to develop coal-fired power because of its technical and economic feasibility, Nam said, explaining while renewable energy from solar and wind is more costly, it can’t ensure consistent power supply.

Application of modern tech

According to Nam, the ratio of Vietnam’s coal-fired power is 39.1 percent, the same as the global average. The rate is much higher in many other countries, such as 63 percent in China, 61 percent in Australia, 46 percent in South Korea, 78 percent in Poland and 87 percent in South Africa.

Besides, he said, coal-fired power output per capita in Vietnam is also 793 kWh, much lower than the world’s average level of 1,290 kWh.

However, Nam said the development of coal-fired power must be cleaner to increase efficiency and reduce emissions through the use of more modern technologies.

Besides coal-fired power, Nam also noted the need to accelerate the development of electricity from other resources, especially renewable ones.

For more sustained development, it is very important to change the country’s economic structure with an aim to reduce the share of power-intensive industries, he stressed.

“In doing so, the demand for electricity decreases, which will reduce the pressure on the electricity supply. At that time, we can make long-term investments for clean and renewable energy,” Nam said.

Others

Brunei eyes to curb motor fuel use with new rules

22 March 2019

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Brunei Darussalam

Brunei will be introducing a fuel economy regulation to reduce the country’s carbon dioxide emissions and fuel subsidies.

Minister of Energy, Manpower and Industry Hj Mat Suny said they will work with the Ministry of Transport and Infocommunications to come out with the regulation that is expected to be launched in 2023.

“It will be enforced in stages. The first phase will be enforced in 2025 and the second phase in 2030,” said the minister during Thursday’s Legislative Council meeting.

He added that the sultanate plans to introduce a pilot project to have at least 10 percent of electric vehicles by 2035.

Hj Mat Suny revealed that Brunei has saved more than 1.4 million Brunei dollars (1.04 million U.S. dollars) in subsidies and reduced carbon dioxide emissions by 4,361 metric tons following the introduction of hybrid vehicles and fuel-efficient vehicles.

As many as 1,960 fuel-efficient and hybrid cars have been registered in Brunei since 2012, he said.

“The savings in subsidies and reduction of carbon dioxide emissions will definitely provide a positive effect on the economy and the environment,” he added.

Brunei’s Land Transport Department places the number of registered vehicles in the country at 148,000 as of 2014, or around one vehicle for every 2.8 Bruneians. The department also notes that car ownership in the sultanate grows at a rate of 9 percent per year.

Oil & Gas

Brunei earmarks 1.2 bln USD for oil, gas exploration

22 March 2019

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Brunei Darussalam

Brunei has earmarked 1.65 billion Brunei dollars (1.2 billion US dollars) for the development of new oil and gas fields and the acceleration of exploration activities this year as it sets its sights on increasing petroleum production by 30 percent over the next five years.

Minister of Energy, Manpower and Industry Hj Mat Suny said the investment aims to secure Brunei’s petroleum industry, which makes up 57.3 percent of the country’s economy.

“This is a huge investment to ensure that oil and gas production is sustainable in the future. This investment will bring about a significant economic impact on local entrepreneurs and the service industry,” he said on Thursday’s Legislative Council meeting.

The minister said they will start drilling five new exploration wells, including two key wells, this year to determine the potential of the new locations.

Hj Mat Suny also said that there are plans to look into deep water exploration in areas with a depth of two km.

He said that the sultanate is also aiming to increase oil and gas production by 9,500 barrels per day this year, to 121,000 barrels per day from 111,500 barrels per day in 2018.

The minister said that Hengyi Industries’ oil refinery and petrochemical plant at Pulau Muara Besar (PMB)is expected to contribute to a more secure supply of domestic petroleum products this year.

Hengyi Industries is a joint venture between China’s Zhejiang Hengyi Group and Damai Holdings, a wholly owned subsidiary under Brunei government’s Strategic Development Capital Fund, with the two owning 70 percent and 30 percent of the joint venture respectively.

Hengyi’s investment into PMB is the largest foreign direct investment into Brunei from China so far, which is due to help the southeast Asian country to upgrade its industries, alleviate its dependency on oil import and also boost economic and trade cooperation between Brunei and China.

Electricity/Power Grid

Camiguin solon asks power utility to address P426-M losses

22 March 2019

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Philippines

MAMBAJAO, Camiguin – Lone district Representative Xavier Jesus Romualdo on Thursday called on the island province’s electric provider to act on its staggering financial losses, saying any disruption in electric services could threaten Camiguin’s thriving tourism industry.

Data obtained from the Camiguin Electric Cooperative (Camelco) showed that the power utility’s debt has already ballooned to PHP426 million over the years.

Romualdo said Camelco’s “inability to properly manage its finances is unacceptable as it means there is neglect in the management” of the power utility.

Joanne Lapeciros, Camelco finance manager, said the electric cooperative has been in the red since she started working for the firm in 2007.

The losses, Lapeciros conceded, were primarily “due to mismanagement, excessive salaries and perks of its officials, and inability to pay loans to government agencies and obligations from its power suppliers”.

Romualdo said the situation has reached an alarming level that he was compelled to initiate a congressional hearing attended by Camiguin power consumers, local government officials, Camelco management, and representatives from the National Electrification Administration (NEA) and the Energy Regulatory Commission (ERC).

The March 18 congressional hearing held in this town has exposed that Camelco’s dire financial conditions are untenable, the lawmaker said.

Romualdo, chairman of the Good Government and Public Accountability and vice chairman of the Energy committees of the Lower House, feared that Camelco’s losses would bleed into the island’s economy–especially its tourism sector.

He noted that Camiguin has been touted as one of the best tourist destinations in the country, where people flocked all year round for its white sand beaches, falls, springs, dive spots, and other attractions.

Based on its financial statement in 2017, Camelco’s debts to its power suppliers have reached PHP76.5 million. Last year, the utility incurred debts of about PHP47 million.

Camelco sources its electricity through a power supply agreement (PSA) from FDC Misamis Power, which supplies the utility with four megawatts; King Energy Generation Inc., two megawatts; and GN Power–which has yet to go online–one megawatt.

Camiguin’s electricity users are currently paying PHP16.45 per kilowatt hour, considered as of the more expensive rates in Northern Mindanao.

Camelco’s current contracted power supply is 10.73 megawatts, but it is using only less than a half of that, at 4.7 megawatts.

With expected operation of GN Power to go online, Romualdo said Camelco’s consumers could end up paying PHP21 per kilowatt hour, which could be the highest in Mindanao.

The congressman said the exorbitant electricity rate was due to “over contracting” as Camelco went into deals with power producers more than its required need.

To lower the island’s electric rate, the lawmaker proposed that Camelco cancel its contract with KEGI.

“The problem with this PSA is that it is over contracted and we (consumers) are paying for this,” Romualdo said.

Meanwhile, Mambajo Mayor Jurdin Jesus Romualdo expressed fears that the island’s power problems could drive away potential investors or make the existing ones flee.

The elder Romualdo said he is even considering on filing charges against the Camelco management and directors for their supposed failure to address the losses and to the NEA and ERC for allegedly allowing the utility’s financial problem to spin out of control.

For his part, NEA official Legardo Galang Jr. said they will conduct their own investigation to determine who is answerable for Camelco’s poor financial conditions. (PNA)

Renewables

Philippines considering nuclear energy

22 March 2019

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Philippines

Nuclear energy might be coming to the Philippines soon after an International Atomic Energy Agency (IAEA) team of experts concluded an eight-day mission in December to review the country’s infrastructure development for nuclear power.

The Integrated Nuclear Infrastructure Review (INIR) was conducted at the Bataan Nuclear Power Plant after an invitation by the Philippines government. Currently, the Philippines is the only country in ASEAN with a completed nuclear power plant.

Philippines’ Energy Secretary Alfonso Cusi said the Philippines is “openly considering” the feasibility of introducing nuclear power as a means of addressing its energy security and energy equity. With a fast-growing economy, the Philippines’ demand for energy is expected to triple by 2040.

The IAEA noted that the Philippines is following a systematic approach to finalise its nuclear power strategy and complete the associated infrastructure development. Cusi said results from the INIR mission will help the Philippines focus its efforts on the identified gaps, accelerate the legislative process and prepare the national decision.

“It is high time we put the framework in place to bring nuclear power into the energy mix. We should learn the lessons from the past and catch up with the missed opportunities,” Cusi was quoted as saying on the IAEA website.

Pioneering Philippines

The country’s existing nuclear power plant in Morong, a town in the Bataan province, is one of 13 potential sites spread out across the country. The power plant was completed 30 years ago under the Marcos regime in response to the 1973 oil crisis but was never operational.

The power plant cost the Philippines US$2.3 billion and was expected to generate 621 megawatts (MW) of power, but after President Marcos was overthrown in 1986 and the Chernobyl disaster happened a few months later, newly-elected president Corazon Aquino decided not to operate the plant. Today, the Bataan plant has become a tourist attraction and is visited by about 6,000 students and guests yearly.

Russia has been urging the Philippines’ government to restart the facility, and experts from the Rosatom State Atomic Energy Corporation made a discreet visit to Bataan in 2017 to inspect the nuclear facility. The Russian experts reported that the Bataan plant can become operational but would require repairs costing between US$3 billion to US$4 billion.

Filipino president Rodrigo Duterte is also thinking of making the Bataan plant operational and has said that safety will be his top priority in deciding whether to go forward with the plan. In 2016, Duterte ordered a study on the possibility of reopening the powerplant, and while not part of his massive “Build, Build, Build” infrastructure program, nuclear energy could be important in fuelling his infrastructure projects. Furthermore, Duterte could be eyeing nuclear energy as an option to feed the growing energy demands of the Philippines.

Source: Various

Russia’s role

Russia’s interest in Bataan is probably economic. Nuclear energy is one of its biggest economic assets. Russia exports goods and services pertaining to nuclear energy all over the world. At the moment, they have over 20 nuclear power reactors confirmed or planned for export construction. According to the World Nuclear Association, foreign orders totalled US$133 billion at the end of 2016.

In 2016, Vladimir Putin himself personally urged ASEAN to look into nuclear energy.

“Moscow is ready to cover the market and is ready to offer member countries projects on the construction of next generation nuclear electrical power stations,” Putin said at the Russia-ASEAN summit in Sochi.

Nuclear energy in Asia however, has been contentious to say the least. Ever since the Fukushima disaster in 2011, gaining popular support for nuclear projects has been difficult. In 2016, Vietnam decided to scrap its nuclear power plant plans with Russia and Japan after decades of nuclear-preparations citing rising costs and safety concerns.

Among the biggest safety concerns when it comes to nuclear power plants are accidents. While the Nuclear Energy Institute highlights that nuclear energy does not produce any greenhouse gasses and is the largest clean-air energy source, the reality is that a nuclear accident can cause irreversible long-term environmental damage as seen in Fukushima and Chernobyl. The amount of damage that a potential nuclear accident could cause heavily outweighs the benefits of nuclear energy.

It is not known at this point whether the Bataan plant will be activated. The Philippines government might have a difficult task of convincing its people that a nuclear plant is needed in the country. Historically, the Philippines has always had a strong anti-nuclear sentiment. There were large demonstrations and public protests when the Bataan power plant was under construction in the 70s and 80s. We could see a resurgence of that if plans to reopen the power plant go ahead.

Oil & Gas

Department of Energy warns of higher fuel prices

22 March 2019

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Philippines

MANILA, Philippines — The Department of Energy (DOE) warns of higher fuel prices amid tight supply in the international market.

Recent world events have once again pushed the prices of oil in the local market.

The DOE has observed the continuing decline of oil production by members of the Oil Petroleum Exporting Countries (OPEC), as well as by countries outside of OPEC.

Saudi Arabia—a major contributor to world oil supply—has steadily reduced its crude oil production by 336,000 barrels per day (B/D) this month, bringing the total OPEC reduction to around 1.6 million B/D to-date.

Further cuts on exported crude oil from Saudi Arabia are expected next month, with the announced reduction of an additional 635,000 B/D.

Meanwhile, the DOE said sanctions imposed by the United States on Venezuela and Iran had also affected world oil prices.

Apart from this, there is an impending Iran export waiver expiring in April.

According to the DOE, this is contributing to the further decline in crude oil supply by around 1.1 million B/D and has already resulted in recent cuts of US oil reserves.

In the East Asian region, the scheduled shutdowns due to the maintenance of oil processing facilities in Japan’s JXTG Nippon Oil & Energy and China’s Sinopec are also expected to contribute in the further reduction of oil supply.

“The nation, along with the majority of the globe, is facing the realities of socio-political turmoil in oil-producing countries, which, sadly, results in fluctuations of oil prices. I cannot stress enough that, as an oil importing country, our market is susceptible to these effects, and it is up to us as a nation how we handle this challenge,” DOE Secretary Alfonso Cusi said in a statement.

Oil companies increased gasoline prices by P1.45 per liter, diesel by P0.30 per liter and kerosene by P0.40 per liter.

Cusi called on consumers to continue to utilize energy efficiently and exercise their power of choice to enhance more competition in the retail level.

“The retail prices and services per retail station are different. Our consumers must compare the prices and services and choose the retail station that provides the best products and services that suit their needs,” Cusi said.

“Everyone must be aware of their respective energy consumption habits and continue to observe an energy efficient lifestyle, whether we have fuel price increases or not,” he said.

Renewables

Sembcorp looking to supply YCH Group’s warehouses in Asia with solar power

22 March 2019

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Singapore

SINGAPORE – Sembcorp Industries on Friday (March 22) said it is working with YCH Group on supplying its warehouses across Asia with solar power, as it announced the completion of a rooftop solar farm at YCH’s Supply Chain City flagship building.

Sembcorp will now look to power other YCH facilities with solar energy in countries such as China, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam, it said in a filing with the Singapore Exchange .

Said Robert Yap, executive chairman of logistics group YCH: “The inauguration of the solar energy system with Sembcorp marks a new milestone in YCH efforts to build on our green initiatives. We look forward to collaborating with them and leverage their smart solar energy system to power our warehouses across the region.”

Mr Koh Chiap Khiong, Sembcorp’s head of Singapore, South-east Asia and China (Energy), said: “With the successful completion of the solar energy system at Supply Chain City, we are pleased to partner YCH in helping them to provide their clients a solution which instantly cuts their carbon footprint and gives them cheaper electricity.”

The completed 2.8 megawatt peak solar farm for Supply Chain City is owned and operated by Sembcorp. Under a long-term contact, the farm will provide energy for the two million square foot building and its tenants, with surplus power being channelled to the grid.

Some 8,000 solar panels are expected to generate over 3,400 megawatt hours of green power annually, which is enough to power more than 770 four-room HDB flats for a year.

This will help to avoid about 1.5 million kilogrammes of CO2e (carbon dioxide equivalent) emissions a year, equivalent to the impact of taking almost 320 cars off the road, said Sembcorp. It will also enhance the sustainability of Supply Chain City, already a BCA Green Mark (Platinum) and US Green Building Council LEED Platinum certified building, the company added.

The solar farm is also backed by a new high-tech digital system at the Sembcorp Solar Performance Monitoring Centre housed within the same building. Using real-time tracking devices, the centralised digital platform remotely monitors the output of every single string of rooftop solar system installed at Supply Chain City as well as at all of Sembcorp’s other solar power projects in Singapore, enabling maintenance and troubleshooting teams to be swiftly deployed when needed, said the company.

Sembcorp said the completion of the solar farm is not expected to have a material impact on the earnings per share and net asset value per share of Sembcorp for the financial year ending Dec 31, 2019.

Electricity/Power Grid

With latest increase, electricity prices move towards market mechanism

22 March 2019

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Vietnam

HÀ NỘI — Although people and businesses don’t want the price of electricity and other commodities to increase, it is necessary to raise these prices to balance the economy in a multidimensional way.

The statement was made by chief economist of the Bank for Investment and Development of Việt Nam (BIDV), Cấn Văn Lực, during an online forum held in Hà Nội on Thursday.

The forum was organised after the average retail price for power was officially raised by 8.36 per cent starting on Wednesday, from VNĐ1,720 (7.49 US cents) per kWh to VNĐ1,864 (8.03 US cents), excluding value added tax.

Different pricing schemes have also been set for households and businesses. Specifically, retail prices for households now range from VNĐ1,678 per kWh to VNĐ2,927 per kWh depending on usage.

Prices rise is necessary

Previously, the input prices (coal, gas) of power generation enterprises still had the sponsorship of the State. However, since 2019, these input costs are no longer sponsored, making electricity prices increase as a necessary consequence, Lực told Việt Nam News.

The Government is also asking to move towards market mechanisms and that is a positive development, he said.

In terms of dosage, the Government and the Ministry of Industry and Trade (MoIT) have considered different factors to decide reasonable price increases, ensuring impacts on the economy, businesses and people are appropriate.

Regarding the time period, according to Lực, it is suitable because global prices, typically the price of coal and petroleum, are not increasing and not creating a large level of inflationary pressure on Việt Nam. The beginning of the year is also a time for the electricity industry to account for its business plan as well as enterprises planning to operate. In addition, this is also the time when the Government may consider adjustment steps to ensure macroeconomic stability.

On the other hand, the adjustment of other commodity prices this year must also be considered to ensure that there will be not many commodities with increased prices in a year, otherwise, it will create macroeconomic instability, Lực added.

Bạch Thăng Long, deputy general director of Garment 10 Joint Stock Company, said both people and businesses don’t want rising electricity prices because they will put pressure on businesses. However, firms are not surprised with this price increase because the information about the rise in electricity prices has been captured by enterprises since 2018 to calculate the action plan.

Adjustment must come with transparency

Economist Lực added the increase in electricity prices leads to increasing costs in production and business. Hence, it will help businesses reduce energy, raise workers’ awareness and use economical equipment to save the electricity. This is necessary for businesses in the current context to improve competitiveness in the market.

He also suggested that Government needs to eliminate cross-subsidising mechanisms for objects using electricity. At present, the industrial sectors consuming large amounts of electricity, accounting for 55 per cent of the electricity density, such as cement, iron and steel, are being compensated for electricity prices and only subject to the lowest price of 6.8 cents per kWh. Meanwhile, the electricity price for households is up to 8.7 cents per kWh.

“Currently, consumers using electricity for domestic use as well as service enterprises are compensating a certain amount for industrial production enterprises – that is unfair. When there is fairness, people and businesses will agree and are willing to pay more reasonable electricity prices,” Lực said. — VNS

Read more at http://vietnamnews.vn/economy/507549/with-latest-increase-electricity-prices-move-towards-market-mechanism.html#ibiW7dJHF5et5G6i.99

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