News Clipping Archive - Page 1212 of 1226

Oil & Gas

PHL signs oil exploration deal with Israel’s Ratio Petroleum

25 October 2018

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Philippines

THE Philippines on Wednesday formally awarded a petroleum service contract (PSC) to Israeli firm Ratio Petroleum Ltd. for the exploration of an area in the east Palawan basin, a move which the Energy department said bodes well for country’s upstream petroleum industry.

The ceremonial signing, which took place at the Heroes Hall of Malacañan Palace, was led by President Rodrigo R. Duterte and Energy Secretary Alfonso G. Cusi on behalf of the Philippines, and Itay Raphael Tabibzada, president and chief executive officer of Ratio Petroleum.

Mr. Cusi said the awarding of the service contract also boosts the economic relations between the Philippines and Israel. The PSC for Area 4 in the Palawan basin is part of the DoE’s fifth Philippine Energy Contracting Round (PECR), which was launched in May 2014.

“The President has been very clear — our country needs to attain energy security and sustainability at the soonest possible time. We are currently experiencing how our dependence on importation has left us at the mercy of price movements in the global oil markets. We need to boost the exploration and development of our own energy resources and the awarding of the petroleum service contract to Ratio Petroleum is a step in the right direction,” he said.

The PECR was established as a transparent and competitive system of awarding service or operating contracts for prospective petroleum or coal areas within the country.

The DoE said Ratio Petroleum would now be able to explore Area 4, covering 416,000 hectares across the east Palawan basin for potential oil and gas resources.

The exploration project is expected to cost $34.35 million, which will be used for studies, data gathering and drilling activities over the initial seven-year contract period.

The DoE said Ratio Petroleum was established in 1992 and has a number of large-scale operations at the Levant basin in the eastern Mediterranean Sea, off the coast of Israel, as well as offshore operations in the Republic of Malta and the Co-operative Republic of Guyana.

“This is the first petroleum service contract signed under the Duterte administration. In fact, the last service contract awarded was with PXP Energy Corp. This was almost five years ago in 2013,” Mr. Cusi said.

PXP Energy is the operator of PSC No. 75 in north western Palawan under the fourth PECR. The service contract was signed on Dec. 27, 2013.

Renewables

Hydroelectric Power in Laos: Economic Security in Energy-Hungry South-East Asia

25 October 2018

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Lao PDR

Background

Hydroelectricity is at the core of Laos’ strategy to become the “Battery of Asia”. The export of electricity to neighbouring high-growth states, such as Thailand, is predicted to stimulate economic development. The average Laotian is likely to benefit from new employment opportunities, greater access to electricity and the development of infrastructure related to hydroelectric dam construction. The timing of this investment is fortuitous, as the rapid development of the South-East Asian economies surrounding Laos correlates to their energy needs, at a time when “clean” and sustainable energy sources are being championed globally.

That same growth, however, threatens the potential value of hydroelectric exports in the long term. Rising interest in energy self-sufficiency, particularly in Thailand and Cambodia, could decrease Laos’ regional competitiveness. If that occurs, Laos could potentially find itself with an oversupply of electricity. Considering its relative dependence on energy export revenue, this could wreak havoc on the national economy if energy prices drop.

Comment

Laos is the fifth-largest hydroelectric energy exporter in the world. Its energy exports generated nearly US$1 billion in the first nine months of 2017 and accounted for 19 per cent of its exports that year. Foreign investors are also interested in its hydropower potential, with 25 per cent of all foreign investment directed towards the hydropower industry. Consequently, hydroelectricity production is likely to increase; currently, 46 hydropower plants are operational and an additional 54 are under construction and scheduled to be operational by 2020.

Only about ten per cent of Laos’ hydroelectricity is sold internally. In the near future, exports are expected to increase with growing regional energy needs. Thailand is the largest importer of Laotian hydroelectricity, with about seven per cent of Thailand’s energy imported from Laos in 2015. By 2036, its energy imports are expected to make up about 20 per cent of its total electricity demand. Similarly, the Vietnamese Government predicts that its energy imports will increase by around 58.5 per cent by 2035 and Laotian energy already accounts for the majority of Vietnam’s imported electricity.

Laos is in a position to meet regional demand for its hydropower. In the long term, however, potential issues could arise from the financial consequences of its infrastructure spending and the energy plans of neighbouring states. The Laotian Government follows a system of “build, operate and transfer” in the process of administering its dams. Under this system, private companies are responsible for the construction and operation of the dams; after 20-40 years of operation, full ownership is transferred to the government. This system eases the approval and oversight process, reduces red tape and more readily facilitates foreign investment.

By the time the government takes ownership, and hydro revenue theoretically flows exclusively to state coffers, two downsides become apparent. Firstly, dam infrastructure requires extensive maintenance, which becomes particularly costly after several years of operation. The Laotian Government will therefore inherit maintenance and upgrade costs previously carried by private operators. These costs will increase over time, because the infamously heavy and unpredictable rainfall in Laos leads to disastrous consequences when infrastructure maintenance standards are not rigorously enforced. The second problem is that by the time the government inherits the hydropower facilities, it is likely that alternative energy sources and hybrid renewable-energy projects will offer more cost-effective and perhaps more efficient sources of electricity.

Regional initiatives to decrease dependence on external energy providers also spell trouble for the Laotian hydropower industry. In the long term, energy self-sufficiency ambitions in Thailand, Vietnam and Cambodia mean that beyond the next 20 years, the market for hydroelectric exports may begin to decline in the face of increased domestic production.

Thailand has expressed its desire to generate nuclear power domestically for five per cent of peak-time use by 2036. Vietnam is planning to increase internal renewable energy generation by over ten per cent by 2030. Cambodia is maximising the energy potential of the Mekong and its tributaries by building several of its own hydropower facilities. It increased hydroelectricity generation by a factor of 50 in just five years between 2011 and 2016.

Studies have found that every country in the Greater Mekong region theoretically has access to energy sources that are 100 per cent renewable, through hydro, wind, solar and hybrid systems. These projections all indicate that, despite currently booming energy requirements for the growing populations surrounding Laos, hydroelectricity may not be as profitable an export in 20 years.

Overdependence on natural resource exploitation for national revenue is not unique to Laos; regionally, for example, Timor-Leste is coming to terms with the consequences of being almost entirely reliant on oil and gas revenue and being subject, therefore, to fluctuating international prices. Similarly, attempting to meet the current regional need for electricity as quickly as possible could undermine Laos’ future energy security.

As investment in hydroelectricity projects is likely to decline, the Laotian economy would be better served by increasing the development of the services industry. That would help to increase economic diversity and reduce its reliance on a single natural resource.

Energy Economy

Transplant a man with a plan

25 October 2018

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Thailand

Kulit Sombatsiri is the first permanent secretary in Energy Ministry history to announce his clear-cut work plans in the first week on the job.

Kulit Sombatsiri is the first permanent secretary in Energy Ministry history to announce his clear-cut work plans in the first week on the job.

“I want to make it clearer and easier to understand so people can trace the progress of this ministry.” — Kulit Sombatsiri, Permanent secretary, Energy Ministry

His last position was director-general of the Customs Department in the Finance Ministry, a ministry he has worked for since 1998.

At 55, Mr Kulit is the Energy Ministry’s eighth permanent secretary.

“I will look to revamp many projects in the Energy Ministry, with a focus on transparency in state budget disbursement,” he said at his first press conference last week.

“I want to make it clearer and easier to understand so people can trace the progress of this ministry.”

Q: What experience from the Finance Ministry can you apply to the Energy Ministry?

As former deputy director-general and adviser to the State Enterprise Policy Office (Sepo) in 2008, I am familiar with state enterprises and oversaw them in many related sectors such as infrastructure, energy, telecommunications and transport.

Those enterprises had a duty to privatise, such by as listing on the stock market, so I had to work closely with them as well as prepare new regulators after some enterprises were deregulated by the government.

Major regulators have been established under my watch, such as the Energy Regulatory Commission and the Office of National Broadcasting and Telecommunications Commissions.

When I worked at Sepo, I also sat on the board of PTT International Co, a wholly owned arm of PTT Plc, a national oil and gas conglomerate.

PTT International is in charge of the group’s overseas trading.

In 2011, I was assigned to sit on the board of Electricity Generating Authority of Thailand (Egat) and its subsidiary, Electricity Generating Plc (Egco), together with a position as deputy director of Sepo during 2011-2013, so I have three years of experience in the country’s power sector.

Before taking the seats at Egat and Egco, I had learned about the impact of fuel tariffs on power bills.

In 2017, I also took a position as a board member in PTT Exploration and Production Plc, an upstream oil and gas drilling firm.

However, I resigned from all seats in the energy firms two month ago after I was relocated to the Energy Ministry’s permanent secretary.

My previous job was similar to an investment banker for the state enterprises and covered the investment plan.

As a result, I had to work for good returns on investment, transparency, efficiency and an enforcement for relevant regulations.

But the energy sector requires technical knowledge in engineering fields.

I will execute the orders handed by policymakers in this ministry; however I need coordination and facilitation from relevant stakeholders to skip any barriers and move towards the better goals.

Q: What are your expectations for both short and long term?

My first job is to take action in line with government policy to discount three baht per litre for gasohol 95 for motorbike taxis and implementing welfare smart cards nationwide. These policies were initiated by Deputy Prime Minister Somkid Jatusripitak.

But I have only a month left to implement this policy, so I have to coordinate with several stakeholders to match connect welfare smart cardholders with actual motorbike taxis.

This needs coordination with many state agencies, motorbike taxis and encourage oil traders to join this campaign, which is scheduled to launch officially in December.

In the long term, I will conduct a study of the ministry’s annual budget for fiscal 2020, which starts next September. The study will start this quarter.

I aim for every penny allocated into the ministry to follow the Thailand Integrated Energy Blueprint, including gas, oil, power development, energy efficiency and renewable energy development plans during 2018-36.

The public has to witness any achievements of energy schemes during 2019-23, so we will take care of each budget, from crucial to less important projects.

Moreover, all projects must be integrated towards a single objective.

I will over look the details of both fossil and renewable fuel projects and classify each fuel, all of which will be finalised within the next couple of months.

The poorest budget allocation is seen in the state-controlled Energy Conservation Fund, which has been notorious among the media and the public for the past 26 years.

The fund only disbursed 10% of the budget for fiscal 2018, which went to energy-saving activities

Established in 1992, the fund is being revamped.

Q: How will you choose between private and public participation in the energy sector during industrial deregulation?

I choose free competition for solar rooftops, where surplus power generation can be sold to state utilities. This is a top priority for me, and will be done very soon.

Policymakers are hurrying to finalise and implement this plan to be in line with disruptive technology in the energy sector.

But free competition must come with fair business conditions and clear regulation to prevent any conflicts in the future.

Q: How will Energy Ministry support decontrolling the gas business?

The policymakers are working hard to finalise clear-cut regulation and direction from many public hearings because this industry requires huge capital expenditures, but gas operators will see the new rules to be implemented in 2019.

Egat has been assigned as the front line to trade liquefied natural gas after PTT Plc.

Q: How will policymakers handle the rise of global oil prices?

Hopefully, the prices will stand at US$80 per barrel. If they climb up, we must deploy the State Oil Fund.

But we have other choices to promote biofuels as Thailand is a major producer. Using biofuels can suffering from increasing prices in the global market.

The ministry is testing more biodiesel content in a various of public transport such as truck fleets and trains.

Retail biodiesel is B7, with 7% methyl ester (ME) that is produced from crude palm oil blended with diesel.

The next stage will be the B10 and B20 because there is also a massive surplus of palm oil.

What is the ministry’s policy to support electric vehicles (EVs)?

Q: On a global level, the Chinese government is very keen on both driving and making EVs, so China is becoming the largest EV market.

Thailand and China have a free-trade agreement with the rest of Southeast Asia that includes EVs, so Thai counterparts must study what measures will drive the population of EVs and bring the most benefit to the country.

But we are worried about waste management of battery EVs as this issue will become a huge problem in the near future, so the Thai government has to seek incentives to support the battery management business in many aspects, from reusing and restoration to termination.

The Energy Ministry will support private operators to participate in the EV scheme, while policymakers are gradually decontrolling the market by terminating every barrier that would deter private participation.

In the future, we will be able to trade electricity with each other through a mobile application, so the ministry must study handle the fast approach of big data and blockchain.

Q: The country’s gas resources will be depleted in the next decade, how will the ministry handle this?

Thailand’s petroleum and petrochemical sectors have been successful in the global market after the country explored natural gas in the Gulf of Thailand, and the sectors are in the third generation of industry.

But we are working with several stakeholders to study shifting from commodity-grade polymers to higher value-added products, including engineering plastic.

We are also seeking to shift from gas-based raw materials to crude oil.

This plan will be done alongside renewable energy development in the future.

Renewables

The road is clear for solar energy in Cambodia, says UNDP director

25 October 2018

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Cambodia

Nick Beresford, country director of the United Nations Development Programme (UNDP) in Cambodia, discusses the state of Cambodia’s energy sector, the hope of solar, and bringing electricity to everyone.

UNDP Country Director Nick Beresford says he is very optimistic about Cambodia embracing renewable energy

Where does Cambodia’s electricity come from?
It has a very large hydro sector – 46 % – so that’s the single largest part of the energy mix. It then has another 33% coming from traditional coal-fired power stations, and a further 13% is imported. The biggest import share is Vietnam, followed by Thailand, and a small amount coming from Laos. The remaining 8% is a mixture of oil and some additional fuels.

Where is the imported electricity coming from?
It’s a bit of an odd situation that Cambodia does import so much, and it’s good to see that Electricité du Cambodge (EDC) is reducing that by bringing up production here – now Cambodia is looking at exporting electricity to Thailand. There is a lot of scope there to have a more optimal mix of energy, and indeed, where energy security issues can be tackled and energy trading might be better. [Cambodia is] importing electricity from Vietnam, but Vietnam’s labour costs and land costs are much higher than Cambodia’s. So we can see potential for Cambodia to produce more of its own energy and indeed, get into energy exportation itself.

What about renewable energy?
The reason I didn’t mention renewables is because they [make up] less than 1% of the energy mix; it’s so tiny it’s almost non-existent. There is no solar effectively. There are one or two solar pilots that we’ve seen, such as the Sunseap solar facility close to Bavet and a bunch of commercial buildings with rooftop solar – so there are some good footsteps towards it, and [there has been] encouragement from EDC, the Ministry of Mines and Energy and from the Ministry of Environment – but it’s at a very low state at the moment.

On that subject, how open has the government been to investing more in renewables?
To be fair to them they are certainly open to the idea, and if you compare the atmosphere to, say, five years ago, it has come quite a way to understanding it.

Also, to be fair to those civil servants and officials, it’s because it is such a fast-moving subject. It’s a different world from five years ago, certainly from ten years ago. It’s a very complex issue as well because it involves issues of how you manage a grid, of the technology in the actual production of the electricity itself, and also innovation in the financing options.

If you take those three things together then there are a lot of moving parts to this, but I think now we are at a point where the government is keenly aware that there is an opportunity here – that there is scope for what they would call a win-win. You can get your high growth, you can get your contribution to energy costs, you can keep those prices coming down and you can start to move more in environmentally improved ways so that you… don’t lock yourself into a brown energy spiral, which is easy to do, but very dangerous and extremely costly later on.

For example, we did some work with the Ministry of Economy and Finance to find out what the climate change risks coming through the system are. We concluded that we could lose up to 10% of the country’s gross domestic product (GDP) by 2050 through climate change effects, if we don’t successfully adapt to mitigate. These climatic and environmental factors are real and they need to be taken into the consideration of the choices that we make in the energy mix.

UNDP recently installed rooftop solar panels on their headquarters in Phnom Penh

Cambodia’s electricity demand is increasing…
The thing about electricity demand is that it is very difficult to forecast because it’s a little bit like an iceberg where you see the top of it but you don’t really see the bottom of it. Why, because people look at the levelised cost of electricity in this country and they think about setting up a factory or a service centre but they decide against it. Because they say that even if the cost of electricity comes down by 5% or 8%, it’s still really expensive. So it is very difficult to measure that loss of foreign direct investment because electricity costs are only revealed when the price of the fuel changes.

Although there are subsidies for very micro uses of electricity within Cambodia, particularly in Phnom Penh… the electricity price costs here are punishing. There are all sorts of benefits, I think, in terms of industrial, in terms of growth, social cohesion, equity, and in leaving no one behind so that electricity really is genuinely more affordable for all people.

To be fair to EDC, the government is very aware of this and has been successful in bringing the cost down, so it’s not like they don’t know or care or they are not aware.

The other thing people keep saying is “grid stability, grid stability, we can’t put in solar”. Grid stability is a factor on a traditional centralised grid such as the one in Cambodia. Once you get to maybe 20% solar, then yeah, you would maybe need to start thinking about how you would manage the grid. But at less than 1% solar, there is no issue of stability. It’s fine. It needs to be thought of in the long-term planning, but in the [near term] the road is clear in that respect.

What about off grid communities?
Off grid is tremendously important, I think primarily just from the point of view of social equity – often these are the poorest communities. I think that off grid solutions five to ten years ago were quite the poor-persons option, they really weren’t very good. They are getting better and better all the time now. We’re seeing both innovation in the way that electricity is generated and also in the way that it is managed, for example with microgrids – although such systems at the moment are technically illegal because you have to go through EDC.

There are clear benefits [to] accelerating off grid, because EDC is not going to get to [many regions in Cambodia] for a long time. So I think even something as simple as a plan for where the grid is going to go and when would be hugely beneficial. Then private investors would be able to say, “okay, I’ve got at least 12 years to make my money back if I start to work with these communities and these villages”.

Sometimes I think NGOs, the UN and others have to be a little careful not to randomly assign grant funding that gives away solar systems and then kills the market, then the project comes to an end and the NGO disappears. And what is the community left with? It is left with a broken, non-functioning solar system, without a proper backup, and the private company has already gone bust because it couldn’t compete against zero cost.

So I think we have to be a bit careful about how we, as development partners, work with government communities, but also make sure that we can allow the private sector to come in and make money. There could be some very nice solutions there for the off grid.

What we would like to do is to stand between the government, the private sector and between the communities and then try to make sure we get the best outcome for those who have been denied access to energy. And [this is] something the government understands and is very supportive of.

Are you optimistic about the future of renewable energy in Cambodia?
Yes, I’m very optimistic because I see lots of opportunities and I also see a government that is cautiously thinking through the different options, but is genuinely motivated to find options that bring all Cambodians into some form of power – preferably on the grid, but if not, high-quality off grid solutions. The government is genuinely motivated by wanting to keep power prices falling and really seize economic growth that is inclusive.

Renewables

Thailand falls on energy slump, Singapore recovers

25 October 2018

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Thailand

BENGALURU (Oct 24): Thai shares fell nearly 1% on Wednesday as the country’s energy sector came under pressure after oil prices slumped overnight, while shares in Singapore pulled back from the previous day’s losses.

Thai stocks were down 0.9%, having resumed trading after a local holiday, with PTT Public Company Ltd falling 2%, while PTT Exploration and Production Public Co Ltd shed 2.5%.

Crude prices hurtled to two-month lows on Tuesday after Saudi Arabia said it could supply more crude quickly if needed to meet possible shortfalls ahead of US sanctions on Iran.

Meanwhile, mounting diplomatic pressure on Saudi Arabia over journalist Jamal Khashoggi’s death and worries about US corporate earnings weighed on sentiment.

Asian markets were largely subdued, with MSCI’s broadest index of Asian shares ex-Japan falling 0.2%, extending the previous session’s losses.

Philippine stocks slipped 0.4% led by financial and real-estate shares, with conglomerate Ayala Corp losing 0.4%.

“Markets had been up for five sessions, and we saw profit-taking eating into the market yesterday. Now we’re seeing some follow through selling from the continued weakness in Wall Street,” said Manny Cruz, an analyst at Asiasec Equities Inc.

“If you look at what happened yesterday, Philippine’s losses were meagre compared to losses in other Asian markets… some of them are recovering but now Philippines continues to suffer from selling pressure,” he added.

Vietnamese shares extended their decline, with all major sectors in the red. Petrovietnam Gas Joint Stock Corp lost 3.1% and food processor Masan Group Corp fell 2.2%.

Singapore stocks, which led losses in the previous session, posted a strong recovery with a 0.7% gain. Transport provider ComfortDelGro Corp Ltd gained 3.2%, after a fall in the previous session.

Indonesian shares inched up, with consumer and energy stocks offsetting losses in the telecom sector. PT Telekomunikasi Indonesia Tbk was the biggest loser, falling 1.1%, while PT Bank Mayapada Internasional Tbk gained the most.

Malaysian stocks also ticked up, and were on track to snap four straight days of falls.

Telecom service provider Axiata Group Bhd rose 3.7% and resort and hospitality operator Genting Malaysia Bhd added 1.1%.

SOUTHEAST ASIAN STOCK MARKETS AS AT 0347 GMT

Market	Current	Previous close	% move
Singapore	3051.11	3031.39	0.65
Bangkok	1643.3	1658.56	-0.92
Manila	7169.54	7197.62	-0.39
Jakarta	5804.115	5797.891	0.11
Kuala Lumpur	1703.9	1697.6	0.37
Ho Chi Minh	937.47	939.68	-0.24

Change on year

Market	Current	End 2017	% move
Singapore	3051.11	3402.92	-10.34
Bangkok	1643.3	1753.71	-6.30
Manila	7169.54	8558.42	-16.23
Jakarta	5804.115	6355.654	-8.68
Kuala Lumpur	1703.9	1796.81	-5.17
Ho Chi Minh	937.47	984.24	-4.75

Renewables

Hevel Group supplies HJT PV modules to Thailand

25 October 2018

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Thailand

High-performance modules have been installed on oil and gas company’s units.

Russia’s Hevel Solar has supplied HJT panels to Thai oil and gas company Bangchak.

Hevel Group has supplied 279 kW of 60-cell heterojunction solar modules to one of the largest oil and gas companies in Thailand – Bangchak Corporation Plc.

HJT modules are installed on top of Bangchak Corporation’s infrastructure units.

The parties agreed not to disclose the terms of the deal.

“This is our first major shipping in southeast Asia,” said Igor Shakhray, CEO of Hevel Group, “We are working in a niche, high-performance segment, that is why our solutions are ideal for rooftop solar systems to maximize output per square meter. Besides module supplies, we are also considering providing a wide range of PV services, from EPC to IPP.”

Welcoming the shipment, Chaiwat Kovavisarach – President and CEO of Bangchak Corporation – said: “Bangchak’s vision, ‘evolving greenovation’, comes from our belief that green innovation is the key to solving the social and environmental challenges of the modern world. Our flagship ‘greenovative experience’ service station embodies this spirit of innovation, and hence our choice of incorporating Hevel’s high efficiency HJT solar modules into our unique ‘green community energy management system’, and our commitment to offer the latest technology to our customers.”

Last year, Hevel Group converted its thin-film fab line to heterojunction technology, and at the end of the previous year. completed the ramp up of its 160 MW solar module production line.

Renewables

In Laos, a World Bank ‘model’ dam and the myth of sustainable hydropower

25 October 2018

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Lao PDR

The Nam Theun 2 is a 1070 MW hydropower plant on Nam Theun river in Laos. Photo by: Asian Development Bank / CC BY-NC

BANGKOK — It wasn’t a flood. It was a tsunami, Premrudee Daorung said of the wall of water that tore through the forests of Laos’ Attapeu province, snapping timber like matchsticks and flattening entire villages.

The July collapse of the Xe-Pian Xe-Namnoy saddle dam in southern Laos and the widespread disaster that followed made international headlines. But Premrudee, coordinator of the Lao Dam Investment Monitor — along with several other development and water experts — says many other mega-hydropower projects in Laos are little more than quiet, slow-moving disasters.

Shortly after the Xe-Pian Xe-Namnoy collapse displaced thousands and claimed at least 40 lives, the Mekong River Commission called the dam break a national tragedy, but also an opportunity. It’s one that “ushers in new hope for a more optimal, sustainable, and less contentious path for development of one of the greatest rivers in the world,” MRC CEO Pham Tuan Phan said in a statement at the time.

The Laos government announced a halt to proposed dams while it reviewed existing hydropower facilities in a move that pleased watchdogs. But just one day later, it initiated prior consultations on the controversial Pak Lay dam in northwestern Laos. The collapse may have triggered international sympathy, but it wasn’t enough to shatter the idea that hydropower should be a pillar of sustainable development along the Mekong — a farce that the World Bank has spent nearly two decades promoting, according to Bruce Shoemaker, an independent researcher focused on development issues in the Mekong region.

In December 2017, the World Bank handed over the Nam Theun 2, a $1.3 billion dam partly financed by the Asian Development Bank, to the Laos government. The mega-project was positioned as the future of sustainable hydropower, said Shoemaker, who began following the project long before its approval in 2005. Instead, in a bid to become a socially and environmentally responsible “model dam,” NT2 failed communities, the environment, and continues to threaten local livelihoods, critics say.

A ‘model’ dam

Plans for NT2 can be traced back to the early 2000s, when, Shoemaker said, the World Bank began touting the concept of hydropower as one of dual purpose: To make the country richer while contributing to poverty alleviation and conservation efforts. But the community benefits attached to the mega-dam were doomed from the start, experts who have researched the project told Devex.

When NT2 got the green light, several NGOs signed on to help relocate 6,000 people to the southern edge of the new reservoir site, beside an area identified for community forestry practices. The dam was operational by 2010, with 90 percent of the power exported to Thailand. But by 2012, progress reports regarding livelihoods and conservation efforts from bank-appointed external panel of experts were souring, said Shoemaker, who is co-editor of recent book “Dead in the Water: Global Lessons from the World Bank’s Model Hydropower Project in Laos.”

It wasn’t surprising to Glenn Hunt, who previously worked in the region and conducted an early assessment of the project’s social development plan. Community forestry is something that has never worked in Laos, he said, and this experiment was no different: “For one of the pillars that was supposed to be the primary source of income, it’s been an unmitigated disaster.”

The reservoir flooded farmland, meaning much of the community’s livestock soon starved and people could no longer count on their crops for income. The association set up to manage the forest largely fell apart, the sawmill will soon be closed, and the effort has not provided the third of villagers’ income it was meant to, Hunt said.

Residents were relocated to new houses, which are accessible via new roads, and the World Bank celebrated the new clinics, toilets, electricity, and water pumps in its statement declaring the closure of the project in December 2017. It’s the tradeoffs for the infrastructure that are problematic, said Niwat Roykaew, head of the Thai people’s network Rak Chian Khong Group.

“If you have the house, you have the house. But what to eat? How do you feed your family?” Niwat said.

Reservoir fisheries have proven to be the most sustainable pillar, though it’s been difficult to keep those outside the immediate community from fishing as well. But with an absence of other income-generating opportunities, community members are instead using the reservoir to access nearby protected land — an area that hosts several threatened species and was meant to benefit from funding and additional oversight — to poach animals and valuable rosewood.

Downstream, villagers have reported a drop in wild fish catch and loss of riverbank gardens. Shoemaker, who had conducted a livelihoods study of the community along the Xe-Bang Fai river in 2001, returned in 2014 to find that the fish market had dwindled, and low-lying rice fields had flooded.

The impact of NT2 is strikingly similar to the World Bank-financed Pak Mun dam, completed in 1994 in Thailand’s Ubon Ratchathani Province, said Kanokwan Manorum, a professor at Ubon Ratchathani University who has researched water and land governance in the area for 20 years. There, resettled villagers faced comparable losses, and turned to broom making after fish catch declined.

“The mistakes we face about the Pak Mun dam are already repeated in the Xe-Bang Fai area,” Kanokwan said. “It shouldn’t be like that. The World Bank should have learned about the impacts of the Pak Mun dam, and should make a better dam. I feel like the better dam will never happen.”

After several emails, World Bank staff said they could not reply to questions regarding NT2 on short turnaround, but pointed Devex to the final report by an international environmental and social panel of experts, particularly this portion:

“The POE [Panel of Experts] has confidence that the project is on the road to overall sustainability. It is not there yet. The solemn additional undertakings by all stakeholders to maintain their support in the years ahead provide evidence of a renewed commitment to the ultimate goal of sustainability by all parties.”

The panel of experts had refused to sign off on the resettlement program in 2015, prompting a two-year extension. Now, as part of the final sign-off, the French development agency has taken over livelihood support for the next five years. Rather than evidence of renewed commitment, it’s proof that the project wasn’t sustainable, Shoemaker said.

Damming the Mekong

Laos is planning to build about 140 hydropower dams in its quest to become the “battery of Southeast Asia.” But Shoemaker and other water and development experts are urging the country to consider a different way forward.

“Investors position mega-dams as ‘high risk, high reward,’ Shoemaker said. “But who is taking the risks? The bank put in all these loan guarantees to the investors, but not for the people there.”

There is little room for communities to engage and advocate on these issues, especially against the nearly nonexistent civil society backdrop of Laos, where the majority of the dams in the region are planned. Lao Dam Investment Monitor’s Premrudee stated she was speaking on behalf of Laos villagers, who did not feel it was safe to speak themselves. The Xe-Pian Xe-Namnoy disaster has prompted global dialogue, and she is hopeful a review of the project will inspire change, she said.

But Hunt wants governments and developers to think further outside the box if they’re going to continue disrupting people’s lives to build massive dams: “Maybe the citizens need to be shareholders, or they need to be getting dividends from the company, something different. It’s their traditional land, why shouldn’t they be part-owners in the entire enterprise? That’s the type of thinking that needs to take place.”

Other suggestions revolve around considering alternatives to hydropower dams altogether. International Rivers, an advocacy group that has opposed the construction of mega-dams, is calling for participatory, Mekong basin-wide planning, and comprehensive options assessment, as well as financial and technical assistance to promote energy and development alternatives. No matter what, social and environmental risk must be costed into projects, said Maureen Harris, the NGO’s Southeast Asia program director.

NT2 and Xe-Pian Xe-Namnoy are just two examples that are now being heavily studied, Niwat, from the Thai Rak Chian Khong Group, said, but he worries about the hundreds of dams proposed along tributaries in the region undergoing less scrutiny.

Xe-Pian Xe-Namnoy is a “clear example” of how corruption and profit-driven investment can cause a disaster, he added, but he witnessed the slow-moving disaster caused by the NT2 project himself.

Niwat visited the plateau area that villagers called home before the dam construction. People living upstream or on the reservoir area had been told they could not build a new house or farm their rice paddies since the land would soon be flooded — and they would soon live in a nice new house elsewhere.

“The predam disaster was already there,” he said.

Renewables

Comin Asia: ‘solar systems have the potential to be highly financially attractive’

25 October 2018

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Cambodia

Comin Khmere, the Cambodian arm of international solutions provider Comin Asia, has enjoyed booming business in the Kingdom by installing large-scale solar projects for clients across the country. Southeast Asia Globe spoke to Comin Asia’s regional operations director Michael Freeman to discuss the business end of the company’s renewable energy projects.

Comin Khmere’s Renewable Energy Division was established in 2008. How has it grown since then?
Comin Khmere has always been interested in solar and renewable energy. In 2008, when the renewable energy division was first established, solar power was still expensive and only smaller off-grid systems were financially attractive.

One of the first larger systems we installed was in 2013, at the Bollore Logistics office in Siem Reap, and it was intended to help power the first electric cars. In 2016, we signed our first solar contract with Cleantech to install a large 2.6MW rooftop solar project at the Coca-Cola plant, which opened the same year within the Phnom Penh Special Economic Zone.

We have since worked together with Cleantech to focus on rooftop solar for industrial clients through a leasing model. The leasing business is becoming increasingly attractive, as the prices of solar panels have come down significantly, from over a $1 per watt peak to just about $0.40 now. In partnership with Cleantech, we consider ourselves the leading contractor in this market.

As Cambodia passes clear and precise legislation regarding clean energy, we now have a strong pipeline of future projects lined up. We expect our Renewable Energy Division to remain a profitable part of our business and a key area for growth.

Can you discuss regional interest in your renewable solutions? What type of client do you typically attract?
In the region, Comin Asia is exploring solar opportunities in Myanmar and Laos. The current prices of electricity there are low, which makes it currently less attractive to invest in solar in those countries compared to solar projects in Cambodia. We expect that it will not take long for our solar projects to begin to take off in these countries.

Our cooperation with Cleantech is mainly for larger commercial rooftop solar systems. Many of our clients invest themselves in smaller-scale solar systems across Cambodia and the region. Cambodia is currently our main market, but Myanmar, Laos and Vietnam could potentially become major markets for us in the next few years.

How does Comin Khmere encourage clients to purchase renewable solutions?
First of all, we suggest to our clients that they install energy-efficient appliances. We also do audits and advise clients on how they can reduce electricity consumption, and explain to them about how much they can save on energy costs by using replacement appliances.

Secondly, we propose solar systems or other appropriate renewable energy technologies depending on the type of client we are talking to.

Thus far, we have completed several large rooftop solar projects in Cambodia. In addition to the 2.6MW system installed at the Coca-Cola plant, we have installed systems at the International School of Phnom Penh and at the US Embassy, to name just a few of our major projects. We are also currently building a 9.8MW solar system at Chip Mong Insee Cement’s factory in Kampot.

We have collected enough data from our completed projects to demonstrate to our clients that solar systems have the potential to be highly financially attractive.

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Damming the Mekong

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