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.
TEMPO.CO, Jakarta – Pertamina Unit Manager Communication & CSR MOR I, Roby Hervindo predicts Indonesia will run out of oil reserve by the year 2030 based on the country’s current 3.3 billion barrels reserve.
“Meanwhile, our fuel consumption continues to rise to 1.6 million barrels each day. North Sumatra alone, the fuel consumption in 2018 increased 3.5 percent compared to 2017,” said Roby in a written statement on Wednesday, March 6.
Roby argues that efficient energy consumption is needed to conserve Indonesia’s energy sources over rational and efficient use of energy.
“Through this event, we hope that it will spark the awareness to conserve energy. Surely without reducing energy uses that are truly needed,” said Roby.
Pertamina Marketing Operation Region (MOR) I in conjunction with North Sumatra University (USU) Mechanical Engineering Faculty held a seminar on energy conservation within the oil and gas industry.
Several attempts on conservation, Pertamina replaced the use of Refrigerant R-22 with Musicool, which is more environmentally friendly which produced savings up to Rp890 million at the MOR I. The state-run energy company also applied micro-hydro technology that managed to produce 1,095 kWh every six months.
HÀ NỘI – Though the Government plans to increase its renewable energy capacity, Việt Nam’s power industry is forecast to see a rise in coal-powered generation as the cheap and reliable source remains the most feasible option to meet the country’s rapidly rising power demands.
According to Daine Loh, power and renewables analyst of Fitch Group’s Fitch Solutions Macro Research, Việt Nam’s coal-powered generation growth is expected to increase rapidly over the next decade and dominate the country’s power sector expansion.
“While the Government also intends to increase LNG imports and non-hydro renewable energy generation capacity, coal would remain the more attractive option over the next decade as it is cheaper and more reliable at present. As such, we forecast that coal generation will reach 50.5 per cent of the total consumption power mix by 2028, with gas at 22.5 per cent, hydropower at 22.8 per cent and non-hydro renewables at 3.8 per cent,” Loh told Việt Nam News.
“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,” he explained.
According to Loh, traditionally, Viet Nam 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 Viet Nam’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, Loh said.
“As a result, we expect the Government to turn largely to coal power to meet Viet Nam’s increasing power demand, which stems in particular from an expanding industry and manufacturing sector, in order to support continued economic growth. Rapid urbanisation and Government efforts to up electrification levels to 100 per cent will further boost electricity consumption growth rates.”
Sharing the view, Trần Viết Ngãi, chairman of the Vietnam Energy Association, told Việt Nam News that coal-fired power would still play a key role in the country’s electricity industry next year.
“The ratio of coal-fired power will increase from the current 39 per cent to some 60 per cent,” he forecast.
Dr Nguyễn Cảnh Nam from the Vietnam Energy Association said with Vietnamese economic conditions, coal-fired power is still a good option.
“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 told Việt Nam News, explaining while renewable energy from solar and wind is more costly, it can’t ensure consistent power.
“The ratio of Viet Nam’s coal-fired power is 39.1 per cent, the same as the global average. The rate is much higher in many other countries, such as 63 per cent in China, 61 per cent in Australia, 46 per cent in South Korea, 78 per cent in Poland and 87 per cent in South Africa,” Nam said, adding that coal-fired power output per capita in Viet Nam is also 793 kWh, much lower than the world’s average level of 1,290 kWh.
Tech needed
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.
Loh also warned that, over the longer term, there are downsides to coal-fired power growth due to increasing environmental concerns and rising coal prices.
“The Commodities Team of Fitch Solutions expects coal prices to increase due to a market deficit for coal over the next five years as global demand will exceed global supply,” he noted.
As a net coal importer since 2015, the rising cost of coal coupled with Viet Nam’s increasing dependence on coal imports will increase electricity generation costs. In the last few years, State-owned Vietnam Electricity (EVN) had been reporting losses due to electricity tariffs for coal-fired power – which are set by the government – having been too low to absorb the increasing costs of coal power generation.
Increasing concerns over pollution have led to a general pushback against coal. While Viet Nam has committed to reducing carbon emissions, there are limited practical alternatives for the government to meet the surge in power demand at present. In a scenario where the cost of alternative sources of power generation are comparable to that of coal power, Loh believes there would be a shift in government strategy that would seek to curb coal power growth and focus on alternatives.
However, a substantial shift in the Government’s strategy is likely to occur only beyond the next decade as Viet Nam is only just starting to develop its grid infrastructure to facilitate renewable energy and building its first LNG terminal to increase natural gas imports, according to Loh. – VNS
A group of top executives of foreign and local mining firms gathered at a forum held in a five-star hotel at the heart of Jakarta recently, expressing their wishes that the government should do more to help their industry as several problems were left unsolved.
Deputy Energy and Mineral Resources Minister Arcandra Tahar gave an opening speech at the forum, saying that he was open for comments about any problems.
However, the CEOs only conveyed their comments after Arcandra left the building.
They mentioned three main hurdles in the mining industry right now: a lack of government attention to mining exploration, regulatory uncertainty and unfair fiscal treatment in terms of royalties for their commodities.
Each year, the government earmarks state funding for mining exploration in the budget of the Energy and Mineral Resources Ministry’s Geology Agency.
However, data from the Indonesian Geologists Association (IAGI) show that the country saw a drop in the amount of overall expenditure for exploration of mineral commodities, such as gold and copper. The number was recorded at US$113 million in 2015, far lower than $497 million in 2012.
“We don’t have a big budget [for exploration from the government] […] we have to start discussing with the government to ask for an increase, not only rely on the company [budget],” said Frans Kesuma, president director of local mining contractor firm PT Pama Persada.
Coal is loaded into a haul truck at a coal mine in South Sumatra. (Shutterstock/Manggarr)
Frans suggested that mining companies immediately discuss the issue with the government as relying mainly on the private sector for exploration was not sustainable, especially when a downturn hit the industry.
“If we only rely on [better] commodity prices [to pay for exploration activities], the budget surely will increase when the prices rise, but when the prices are down, the budget will automatically decrease as well,” he said.
Boosting exploration in the mining sector is important to ensure adequate reserves in the future. Government data show that Indonesia’s coal reserves, which stood at 26.2 billion tons as of March 2018, will deplete in about 50 years from now, assuming there is no new discovery of a reservoir.
Coal is expected to be the main energy source for Indonesia for over 30 years from now as the commodity will still be contributing more than 20 percent to the national energy mix.
Beyond coal, Indonesia still has big untapped resources of other minerals, such as nickel ore laterite, which will be an integral part in batteries for electric vehicles. The country had around 6.5 billion tons of reserves of the commodity in 2017.
Ratih Amri, executive director of mining think tank Mineral and Mining Industry Institute (MMII), acknowledged that research and development (R&D) was important for exploration activities, saying that the government was preparing an incentive to support that.
“I heard that there is a [proposed] presidential regulation on incentives for vocational training and R&D activities. And it could be followed with a ministerial regulation, like tax deductions for any money you [private mining companies] spend on R&D,” she told the audience at the forum.
MMII is working under state mining holding company PT Indonesia Asahan Aluminium (Inalum), which officially became a major shareholder of gold and copper miner Freeport Indonesia in December 2018.
Heavy equipment and trucks pass through a coal mine in East Kalimantan. (Antara/Wahyu Putro A)
Exploration activities in mining remained few compared to other energy sectors, such as oil and gas, due to a number of problems and high level of complexity, said Fahmy Radhi, an energy and economic observer at Gadjah Mada University.
“There are three key barriers that still hamper investment for exploration in the mining sector, namely declining mining resources, regulatory hassle and resistance from environmentalists,” he told The Jakarta Post recently on a separate occasion.
The government said earlier this year that the investment target for the mineral and coal sector for 2019 was around $6 billion, relatively flat compared to a year earlier. It will also highly depend on the success of mining auctions, which will involve at least 14 mining sites.
Regarding the issue of regulatory uncertainty, executives of mining companies said they often had to deal with problems surrounding forestry-related permits.
Publicly listed miner Bumi Resources Minerals, for example, has always struggled when dealing with forestry-related permits. Its director Suseno Kramadibrata likened the process to struggles of “blood, sweat and tears”.
Workers monitor a mining area of nickel producer PT Vale Indonesia. (KONTAN/Cheppy A Muchlis)
As for fiscal treatment, Vale Indonesia president director Nicolas Kanter criticized the structure of royalties paid by his company for processed nickel and nickel ore. He argued that nickel miners such as his company were not treated fairly, and that the policy betrayed the government’s mission to develop the downstream industry in the mineral sector.
Nicolas hinted that setting a lower royalty rate for nickel ores compared to processed ones would not help create added value for the commodity.
Government Regulation No. 9/2012 on types and tariffs for non-tax revenues under the Energy and Mineral Resources Ministry stipulates that each sale of nickel ore per ton is subject to 5 percent in royalties.
Each ton of processed nickel, namely nickel matte and ferro nickel, is subject to 4 percent in royalties from each sale, only 1 percent lower than the rate for ores or unprocessed nickels.
After a previous renegotiation with the government, Vale Indonesia is required to pay 2 percent in royalties.
“Based on the negotiation [with the government], we only pay 2 percent [for processed nickels], while for the ores, we pay 5 percent. So, does our country really encourage the [creation] of value-added [products]?”
Another blow for processed nickel occurred in 2017, when the government decided to scrap the ban on ore exports, including nickel ore. The ban was previously implemented to protect the products of mineral downstream industries.
