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Renewables

Solar Philippines PV mini-grid franchise passes to final stage in Congress

7 December 2018

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Philippines

UPDATED: A controversial House Bill granting private Filipino firm Solar Philippines a PV mini-grid and transmission franchise across the Philippines has all but passed through Congress, with only a procedural third step left to confirm the final draft of the Bill.

The House Bill (HB 8179) allows Solar Philippines, operating under the name Solar Para Sa Bayan (SPSB) ‘Solar for the country’, what is described as a non-exclusive franchise offering an alternative energy source from traditional utilities to Filipinos.

There are three steps in Congress: a first reading through the Committee; a second reading involving a debate on the floor; and a third reading, which is a confirmation of the final draft of the bill. Today the second reading was passed through a vote and the bill now only has to go through a third reading in the next couple of days, where it is possible certain amendments may be introduced, including factors relating to the scope of the franchise.

The House Bill has been at the centre of heated debates both in the media and politicly and has come up against intense opposition from most of the rest of the solar industry.

Among a long list of arguments on both sides, one of the key points is whether the bill would create a monopoly.

Leandro Leviste, founder and CEO of Solar Philippines, who was present at the vote today and confirmed the news to PV Tech, insists that he wants other players to come forward and follow suit, but much of the rest of the industry has called it out as merely replacing one monopoly (the utilities), with another monopoly in the form of a single private solar company.

PV Tech recently visited a solar-storage-diesel micro-grid set up by SPSB in Paluan, a previously heavily underserved area in terms of power supply on the island of Mindoro. The locals had faced frequent brownouts and just 3-8 hours of electricity per day if any, but the new mini-grid is offering 24/7 power at cheaper rates and could be a symbol of things to come to other parts of the country under the new franchise. The economics of rural electrification using microgrids should be considered an investment for the future, akin to how Silicon Valley tech providers plough money into initially loss-leading products and services, Leviste has said of his strategy.

Local solar industry decries ‘railroaded’ bill

The Philippines Solar and Energy Storage Alliance (PSSEA) had proposed amendments to the Bill, opening with this statement: “The goal of providing electricity for all cannot and should not be the sole domain of any one company. Increasing access to clean energy is possible only through the sustained, multi-sectoral efforts where everyone operates fairly and transparently.”

Claire Lee, vice president of PSSEA, told PV Tech that the association had been pushing for a rework of the franchise’s scope so that it focused purely on underserved and unserved areas, rather than across the whole country, but the approved bill reads that SPSB can operate “in areas to be determined by DOE including unserved and underserved areas”.

Lee said that this ambiguity suggests that SPSB will still be able to set up projects anywhere in the country.

PSSEA had also been pushing for safeguards and an obligation on Leviste’s part for a nationwide franchise and Lee said that the more crucial amendments proposed have been accepted. For example, Solar Philippines will have to seek certification and permitting from both ERC and DOE for its projects.

Lee added: “We maintain that what we need is a democratization of the power industry, not more barriers to entry. We have existing rules on missionary electrification. What we need are reforms on these existing rules.

“At this point we can only provide amendments, considering that the process of the bill was not transparent. The private sector was never consulted. We still consider this bill as unnecessary, unconstitutional and monopolistic.”

The PSSEA, had previously released the following statement: “We strongly oppose the passage of House Bill (HB) 8179 or the granting to one firm unlimited, monopolistic control of an important sector of our society. It is in conflict with the overarching policy of our nation being a free, open, fair economy. We are at a loss to know why it was even considered.”

In response to claims that the bill was railroaded, Leviste and his team have claimed that HB 8179 went through the longest hearings of any bill to the knowledge of members of the Committee on Legislative Franchises. More than three months had passed and other franchises filed after HB 8179 had already been passed. Solar Philippines also claimed that the House Bill had come under more scrutiny than nearly any other bill in the 17th Congress.

Despite this claim, Paul Pineda, head of the Philippine Rural Electric Cooperatives Association (Philreca) Resource Center, also told PV Tech that the bill was deliberated in just a matter of hours and discussed without any representation from stakeholders like distribution utilities nor other players from the renewable energy sector.

Leviste has also hit back at local electricity co-operatives, who have of course opposed the Bill, by claiming that it is not difficult to offer cheaper prices than members of Philreca because Filipino utilities charge the highest rates in Asia.

Again Pineda disputed this by claiming that SPSB actually charges higher rates than nearby cooperatives. He was citing bills that Philreca has seen from 20 customers of the Paluan micro-grid during a visit to the project and its customers.

SPSB has said that its mini-grid projects in provinces including Mindoro, Palawan, Masbate, and Cagayan have been opposed by utilities, who claim third parties must get permission from them as the franchisees in these areas. It is for this reason that it believes mini-grid franchises are necessary for new providers to offer an effective alternative to existing utilities.

In a statement, SPSB said: “Existing utilities may be best served if, instead of trying to prevent competition, they just focused on lowering costs and improving services, so Filipinos would be satisfied with their electricity, and there would be no need for cheaper, cleaner, more reliable alternatives at all.”

The Department of Energy (DOE) has made a target of providing affordable, reliable electricity for all by 2022.

Another argument from the PV industry is that rural electrification of the Philippines cannot and should not be the preserve of one company. SPSB is already in 12 towns in 9 provinces and supplying power to 200,000 people and it has made a great noise about how it can offer its projects without subsidy. The industry, on the other hand, believes this will stifle competition and therefore also innovation in the sector. Meanwhile, SPSB has highlighted the inefficiencies and poor power supply of the incumbent utilities and also pointed to a distinct lack of penetration of mini and micro-grids into the Philippines, Through its franchise, the company plans to change this while also preventing the institutionalisation of the inefficiencies of electric utilities.

Renewables

Renewable energy for a livable future

7 December 2018

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Philippines

In such a fast-paced world, when are you going to make time to take a look at what’s happening around you?

With rampant development happening all over the world, there always seems to be a race to be better, to develop more, to be the first to innovate. However, such innovations and progress do not always lead to good things for the environment – and we now continue to experience the effects of such neglect. Not many people know this, but we had the opportunity to solve the climate crisis back in 1979 to 1989, particularly at the First World Climate Conference in 1979. However, efforts have been unsuccessful. During this decade, we have already been able to successfully identify the warming of the earth and its threats, while policies have been proposed to properly guide people on how to address them. If only affirmative action was taken to solve the impending climate crisis then, carbon emissions would have been frozen with a 20% reduction by 2005, and we could have been able to hold warming to less than 1.5 degrees. It is unfortunate that we have failed to do the necessary actions that were proposed in various conferences and summits like the Villach Conference in 1985, Noordwijk Conference in 1989, etc., as such, the world is now in an irreversible position where we can only try to “manage” the ill effects of our changing climate. Despite being blessed with rich natural resources, the Philippines’ ecosystem and biodiversity have become increasingly vulnerable to tropical cyclones, rising temperatures, and long dry periods. The Philippines is no stranger to natural calamities devastating our cities where Typhoon “Ompong” (international name: “Mangkhut”) left the country with P4.4 billion worth of damages on public infrastructure and P14.3 billion on agriculture in Regions I, II, III, Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon), V and CAR (Cordillera Administrative Region), according to the National Disaster Risk Reduction and Management Council.

Renewable energy for a livable future — *EDC’s 232.5-Megawatt Malitbog geothermal power plant in Kananga, Leyte is one of the world’s largest*

The weather has been increasingly unpredictable and tend to be in extremes, our seasons no longer based on certain months. Climate change has clearly caught up.

As we are now pressed for time in saving the earth, every action must start now. Climate change is a worldwide phenomenon, it affects everyone, which is why there has been attempts to create a global framework to address this threat. Through the signing of an international environmental treaty like the United Nations Framework Convention on Climate Change, the weight of the problem is now shared among nations, yet the effects are personal. The implementation stays dependent on the policy makers and corporations in the local setting.

Still, the goal remains – to create a space that is safe and livable especially for future generations. The same soil where we stand offers us an option to lessen the effects of climate change. Geographically, the Philippines has the capacity to shift its major energy source from fossil fuels to renewable energy, like geothermal. About 10% of the world’s land area carries high thermal gradients that ensure heat flow to the surface of the earth. These zones are situated along the Pacific Ring of Fire, the southern part of which includes the Philippines. Geothermal leader Energy Development Corporation (EDC) has been championing this cause for years. More than 40 years ago, EDC has emerged as the largest producer of geothermal energy in the Philippines, and has put the Philippines on the map as the third largest geothermal producer in the world, next to the United States and Indonesia. Its track record and pool of geoscientists and engineers gives the assurance to the successful assessment of every exploration. EDC’s advocacy on the development of sustainable energy has paved the way to the seven geothermal steam fields in five geothermal contract areas, and the operation of eleven geothermal power plants in the country—power plants that release only a tenth of carbon dioxide in comparison to coal power plants. True to its roots, EDC continues to search for alternative energy sources in the middle of a crisis. Established during the oil crisis in the 1970s, EDC provides a cleaner alternative in the midst of the climate crisis. Geothermal energy remains to be the most reliable among other natural sources of energy, as it is the only source of power that can provide clean, renewable, and reliable baseload power, operating 24/7.

The possibilities of geothermal energy for power production are endless. Even now, it has not yet reached the peak of its potential development. According to a Stanford coursework by Aloysius Makalinao, a Schneider fellow for Climate and Clean Energy, who also has a diverse background in energy resources engineering and earth systems, the existing trend showcases that by 2030, much of the energy will come from geothermal in addition to the growth of renewable energy. The earth will continue to provide us what we need. It gives what it can take. This opens more opportunities to save the earth from a crisis that we’ve caused and should have addressed a decades ago.

Renewables

Philippines government signs pact on renewable energy scheme for Palawan

7 December 2018

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Philippines

The Filipino Department of Energy (DOE) has signed a memorandum of understanding (MOU) with the provincial government of Palawan to develop a new renewable energy scheme.

The Renewable Energy Applications Mainstreaming and Market Sustainability (DREAMS) project aims to improve energy efficiency, safety, security in Palawan, which is a thin archipelagic province in the far southwest of the country. It would also facilitate renewable energy projects.

The MOU signing was in support of the DOE’s project to boost localized planning in the development and usage of renewable energy, following the successful series of consultations with the provincial governments of Palawan and Iloilo.

A Senate Bill to lift the cap on net metering projects beyond 100kW in the Philippines was recently being pushed through the Senate. It is expected to boost solar in big business and in social housing. PV Tech also recently visited a solar-storage-diesel micro-grid in Mindoro.

Oil & Gas

Sapura Energy’s 3rd quarter results will not dent the company

7 December 2018

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Malaysia

KUALA LUMPUR: Sapura Energy Bhd will be able to ride over the challenging third quarter financial results ended September due to its strong fundamentals, solid order book of RM18.2 billion, rebounding crude oil prices as well as full support of its majority shareholder, Permodalan Nasional Bhd.

Analysts and industry sources said these are challenging times due to the cyclical nature of crude oil, but Sapura Energy is well poised to brush aside headwinds and emerge stronger than before.

The oil and gas giant is expected to announce its third quarter results on Bursa Malaysia tomorrow.

Industry observers say oil and gas industry will be facing a poor financial results in the third quarter of this year mainly due to weak crude oil prices.

But Sapura Energy is the exception as it has strict risk controls and the skills of its management led by its president and chief executive officer Tan Sri Shahril Shamsuddin.

“Shahril has more than 20 years experience in the oil and gas sector and he is experienced enough to turn around the firm. Any financial setbacks in the third quarter results will be temporary,” said an analyst at Public Investment Bank Bhd.

MIDF Research oil and gas analyst Noor Athila Razali is forecasting crude oil prices to gradually recover and trade at more than US$70 per barrel next month.

“Demand is expected to be firmer next year and we do not expect the current low oil price environment to persist into 2019,” she told NST Business.

Alliance DBS Research analyst Inani Rozidin meanwhile said despite all the gloom and doom, long-term outlook for Sapura remains strong as it has a sturdy order book of RM18 billion.

“The situation will normalise by the third quarter of 2019 and its order book will help the company to turnaround by 2020.

The company’s high tenderbook points to a potential recovery and we are optimistic on the company further clinching further sizeable contract wins,” Inani told investors in a research note recently, giving the stock a Buy recommendation.

Inani said Sapura’s losses will narrow towards the second half of 2019 due to the realisation of new contract wins and higher Brent crude oil prices to support the energy segment and improvements in the utilisation in the drilling segment.

She added Sapura’s RM18.2 billion orderbook is also its highest over the last four years and it is currently tendering book is worth RM30.6 billion.

“We are positive on signals that capital expenditure has bottomed out and contract flows are improving flowing into Sapura Energy’s order book.

Meanwhile, in its research note recently, Public Invest said Sapura Energy is well shielded against any impediments due to its vigour to lighten its debt burden from RM16.4 billion to RM9.8 billion and lower its gearing level to 0.6 times from 1.7 times currently.

“The management expects this to translate into lower interest cost by RM320 million and Public Invest has raised Sapura Energy’s net profit for 2020 to over 10-fold to RM2.46 billion due to interest savings from repayment of debt and gain from a RM2.7 billion disposal.

Most stockbroking houses such as JF Apex Securities, DBS Alliance and Public Invest have also the Sapura stock a Buy call with target prices ranging between RM0.80 sen to RM0.90 sen in the next one year from current levels of RM0.60 sen.

Shareholders can be assured over Sapura Energy’s outlook as its prospects are rosy and bright as challenging third quarter results is not expected to sway the company one bit but in turn elevate its resolve to become stronger again.

Renewables

Laos set to check all hydropower dams nationwide by 2021

7 December 2018

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Lao PDR

VIENTIANE, Dec. 4 (Xinhua) — Lao Minister of Energy and Mines Khammany Inthirath told the National Assembly that inspection teams have completed checks on 20 dams with another 50 yet to be carried out, and the teams plan to finish their work at all dams by 2021.

The Ministry of Energy and Mines is working with foreign experts and international organizations to keep a tab on the functioning of hydropower dams across the country, local daily Vientiane Times reported on Tuesday.

The ministry has decided to carry out periodic checks to ensure that the highest standards are being maintained at the dams as required by law. The targeted dams include those that are operating and also others under construction.

The inspections come after the country witnessed collapses of two dams in the past two years. A small dam, the Nam Ao hydropower plant in Xieng Khuang province, collapsed last year and a saddle dam at the Xe Pian-Xe Namnoy hydropower plant collapsed on July 23 in Sanamxay district, Attapeu province.

The minister said the ministry will select investors and developers more carefully in the future, checking expertise of investors, the technology and skills on offer and the funds at their disposal before issuing licences.

Electricity/Power Grid

Nexans wins major subsea grid contract in Philippines

7 December 2018

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Philippines

French cable company Nexans has won a contract worth over $100m for a major interconnection project in the Philippines.

With power consumption in Philippines rising by almost 80 per cent in the last 15 years, the National Grid Corporation of the Philippines (NGCP) has launched the Mindanao-Visayas Interconnection Project to connect the three grids of Luzon, Visayas, and Mindanao into one unified power line.

Nexans has been awarded the submarine link of the project – a full turnkey contract to manufacture, deliver and install a 350 kV HVDC submarine cable.

The cable will be manufactured in Nexans’ Nippon High Voltage Cable Corporation plant in Futtsu, Japan, plus in its Norway plant in Halden.

The installation and protection works at water depths up to 650 m will be performed by Nexans’ own cable-laying vessel C/S Nexans Skagerrak.

Vincent Dessale of Nexans Subsea and Land Systems Business Group, said: “We look forward to contributing to the construction of a single national grid, which will provide a more reliable electricity transmission to the Philippine people.”

The Mindanao-Visayas Interconnection is expected to be complete by 2020.

Coal ,
Renewables

Southeast Asia’s Clean Energy Challenge

7 December 2018

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ASEAN

While the region can’t give up on coal for now, there is a lot it can do to get clean.

December 12 marks the third anniversary of the Paris Agreement, a compact intended to catalyze a global reduction in carbon emissions. Yet all the statistics suggest the problem is getting worse: the latest report from the International Energy Agency (IEA) suggests 2018 is likely to set a new record for carbon emissions. This stat is all the more surprising, and alarming, since 2017 saw record levels of renewable energy installation.

How to explain this contradiction? Well, for one thing, with global populations rising by some 83 million a year, the vast fleet of new renewable facilities aren’t sufficient to meet our planet’s energy demands. Although wind and solar power are making huge gains in the electricity sector, fossil fuels account for exactly the same share of overall energy consumption as they did 30 years ago. Despite the admirable ambitions outlined in Paris, we still can’t afford to ratchet back our energy use.

Nowhere is this truer than in Southeast Asia. Although all 10 members of ASEAN, the region’s intergovernmental association, have submitted national pledges on climate action and agreed on grandiose action plans, they currently lie at the bottom of the global league table for renewable energy deployment – and current trends suggest that it will take considerable efforts to reroute this course. For instance, Thailand’s new government has virtually brought renewables expansion to a standstill and Malaysia is the only country in the world to reduce its fleet of solar panels in recent years. It’s not surprising that the IEA expects coal will still be Southeast Asia’s primary fuel source by 2040.

Yet in many ways, this reluctance to abandon traditional fuel sources is easily explained. Southeast Asia’s population increased by 23 percent between 2000 and 2017, reaching around 700 million people, and it is expected to rise by a further 20 percent by 2050. This remarkable growth, which has been accompanied by rapid urbanization and economic development, has placed huge demands on the energy sector, and will continue doing so – the IEA expects Southeast Asia’s energy demand to grow by almost two-thirds by 2040. Although the costs of wind and solar technologies are falling dramatically, coal remains attractive due to the vast reserves found across the ASEAN region, notably in Indonesia. Neighboring countries such as China and India may be investing heavily in nuclear power as they attempt to wean themselves off fossil fuels, but this would be a risky bet in Southeast Asia, given the number of earthquakes and tsunamis that have struck in recent years.

Given all these factors, there’s little chance that Southeast Asia will halt its reliance on coal anytime soon. The potential consequences are clear: analysts expect that, under a “business as usual” scenario, the region’s carbon dioxide emissions will rise by 5.7 percent by 2030. But this scenario is certainly not inevitable. In fact, the IEA suggests that the ASEAN region can realize major emissions reductions simply by making its power sector more efficient, accompanying its renewables investment with a move towards low-carbon, ‘clean coal’ technologies.

The most promising of these technologies is carbon capture and storage (CCS), which siphons the carbon dioxide produced during the coal-burning process and sequesters it for subsequent re-use. Although CCS is still relatively untried in the ASEAN region, it is rapidly gaining ground elsewhere – notably in China, fast becoming a global leader. The IEA has predicted that, if properly harnessed, CCS can provide 20 percent of the total carbon cuts needed to keep emissions within reasonable boundaries over the next 30 years.

Encouragingly, ASEAN leaders have expressed willingness to explore such technologies. At the latest ASEAN Forum on Coal, officials pledged to share technical capacity for the deployment of low-emission coal innovations and explore the potential of CCS. Countries like Thailand are also pushing individual strategies towards cleaner coal technologies, notably those used in “super-critical” power plants that achieve efficiency gains by burning coal at higher temperatures.

However, if Southeast Asia is to deliver on its grandiose promises regarding cleaner coal technologies, it needs to overcome a series of challenges. The vast development gap across the region, from the high-tech boom in Singapore to the travails of Indonesia and Thailand, makes it extremely difficult to deliver a unified policy. Furthermore, much of the power systems architecture in countries like Vietnam is based on cheap, outdated technology that may not be receptive to modernization.

Most significantly, cleaner power technologies remain expensive. Analysts suggest the installation of CCS can increase the cost of electricity from new power plants by up to 90 percent, a prohibitive figure for developing ASEAN countries with soaring populations. Industrialized states have talked about helping their less developed counterparts, but so far many have been unable to back up these promises. For instance, the UN’s Green Climate Fund, launched in 2010, has thus far delivered less than half the $10.3 billion originally promised. Far from understanding the challenges facing the ASEAN region, the World Bank has turned its back by pulling out of all coal projects. Little wonder aid workers talk of a “lack of trust” in the developing world, which will only make its leaders more reluctant to embrace the global climate change agenda.

To be fair, there are some signs of momentum to help the developing world increase baseload capacity without causing climate catastrophe. At the annual UN climate talks in Katowice, Poland next month, the US administration plans to hold an event on ways that developing countries in particularly can use technologies to burn fossil fuels more cleanly.

Indeed, for Southeast Asia – whose emissions problem is a microcosm of the global challenge – these technologies will be a game changer. After all, despite the dire threat it faces from climate change, the region’s demographic and economic challenges mean it simply can’t afford to stop burning coal. High-efficiency, low-emissions technologies will thus be a critical means to bridge the gap.

Grace Guo is a Vienna-based researcher and a program associate for an NGO focused on Asian politics.

Electricity/Power Grid

Germany to loan Cambodia $33.95m for rural grid upgrade

7 December 2018

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Cambodia

But the signing date is not yet set as the duration and interest will have yet to be negotiated.

Germany will loan Cambodia $33.95m (EUR30m) to support the country’s move to upgrade its rural energy grid and boost solar energy, the German embassy to Cambodia announced.

The loan was agreed upon in the embassy’s meeting with Electricite du Cambodge (EDC – Electricity Authority of Cambodia).

The Phnom Penh Post added that the loan is financed by the German Ministry for International Development’s Climate Technology Initiative and will be implemented by KfW, Germany’s development bank.

An embassy spokesperson told the paper that the loan’s signing date is not set and the loan duration and interest will first be negotiated between KfW and the Ministry of Economy and Finance.

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Local solar industry decries ‘railroaded’ bill

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