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Renewables

Vietnam’s proposes to extend the solar feed-in-tariff by two years

11 February 2019

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Vietnam

On 29 January 2019, the Vietnam Ministry of Industry and Trade issued the draft policy to extend the solar feed-in-tariff (FIT) eligibility until 30 June 2021. This is an extension of two years from the earlier 11/2017/QD-TTg. This extension is coupled with a shift from a single standardized FIT, to differentiated FITs based on the regions’ solar irradiance, installation type and commercial operation date.

Although the FIT is being extended until 30 June 2021, the overall rates have been reduced. The largest reduction is almost 30% lower for projects that achieve commercial operations between 1 July 2020 and 30 June 2021, in provinces with the best solar irradiance. This will motivate developers to meet the 30 June 2019 deadline to qualify for the rewarding $93.50/MWh feed-in tariff.

The proposed FIT is also differentiated by region, based on the solar irradiance for each province/municipality. The government has proposed lower FIT rates for regions with better solar resources and higher rates for poorer irradiance regions. This differentiated rate aims to spread out solar development more evenly across the country.

Figure 1: Heat map of solar PPAs in Vietnam

Renewables

Renewable energy-led pathway vital for Vietnam

11 February 2019

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Vietnam

Renewable energy could become Vietnam’s lowest-cost option to meet its energy needs, according to a whitepaper released by global management consulting firm McKinsey & Company at a press conference held on January 23.

renewable energy led pathway vital for vietnam

At the press conference

‘Exploring an alternative pathway for Vietnam’s energy future’ evaluates how Vietnam could meet its growing energy demand at the lowest cost, with the least impact on public budgets and the least risk.

“As one of the 18 outperforming emerging economies we identified globally, Vietnam needs more capacity to meet the rapidly growing energy demand it requires for sustainable growth. The path Vietnam chooses to build this capacity will have far-reaching implications on GDP growth potential, trade, environmental performance and energy security,” said Marco Breu, managing partner, Vietnam, McKinsey & Company.

The research found Vietnam’s significant natural endowments of solar and wind power combined with a drop in the capital costs of solar and wind over the past five years – 75 percent decrease in solar costs and 30 percent decrease in the costs of wind – strongly positions renewable energy to be a more affordable source of electricity than thermal generation.

Vietnam’s current power plan requires an investment of roughly 150 billion USD by 2030 in additional generation assets and grid infrastructure. The power-generation investments focus largely on coal (about 45 additional gigawatts by 2030) and to a lesser extent renewable energy (18 gigawatts by 2030).

Antonio Castellano, partner and co-lead, electricity and natural gas practice, Southeast Asia, McKinsey & Company

The research suggests that a renewable energy-led pathway could help Vietnam’s power sector perform better than the current trajectory because overall power costs between 2017 and 2030 would be reduced by 10 percent, primarily driven by savings in fuel costs resulting from a move away from high levels of fuel-intensive thermal generation.

Greenhouse gas and particulate emissions would be reduced by 32 percent and 33 percent respectively between 2017 and 2030. This would also boost health and economic productivity.

In addition, the renewable energy-led pathway relies on 28 percent less total fuel and 60 per cent fewer imports. This would reduce Vietnam’s reliance on fuel imports and fossil fuels.

“There is no silver bullet that will solve Vietnam’s energy challenges. The ability to meet rapidly growing demand while keeping costs low will depend on the creation of financial and regulatory infrastructure that make the market attractive to capable renewable energy developers,” said Antonio Castellano, partner and co-lead, electricity and natural gas practice, Southeast Asia, McKinsey & Company.

The whitepaper also discusses the keys that could unlock a renewable energy-led pathway. These include creating suitable market conditions for renewable energy development, building the country’s capabilities to deliver large scale renewable energy projects and expanding natural-gas generation’s role in the country’s power plan.

“This is a watershed moment for Vietnam. Renewable energy is potentially the lowest-cost option for Vietnam to meet its energy needs. Actions taken today to help lay the groundwork for renewable energy development would offer the country the prospect of a less expensive, cleaner and more secure future,” he added.

Theo VNS/VNA

Renewables

Solar Philippines enters India market

11 February 2019

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Philippines

SOLAR PHILIPPINES Power Project Holdings, Inc. has entered the renewable energy sector in India with the construction of a 500-megawatt (MW) solar farm, its top official said.

“We already have our first project in India,” Leandro L. Leviste, president of Solar Philippines, told reporters last week, but declined to give details because of the issues faced by his proposed minigrid franchise in the Philippines.

“Ayaw lang namin guluhin ang kuwento (We just don’t want to muddle the story),” he said, when asked to elaborate. “But this year we’ll have around 500 MW of projects in India.”

Mr. Leviste first disclosed in May last year his company’s plan to venture in India, which he described as having a favorable regulatory environment.

Asked about his company’s partner in India, he said: “We don’t do partnerships in India. The beauty of India is the very low barrier to entry to develop grid-connected power projects in solar parks, as what they are called, with land and transmission provided by the government.”

“So any company in the world, with no local ownership condition can come in and bill P2.00 per kilowatt-hour (kWh), and basta P2.00/kWh makakakuha ka ng kontrata (as long as it is P2.00/kWh, you’ll get a contract),” he added.

Mr. Leviste had said the solar power rates in India are in the range of P2 to P3/kWh, although the capacity at stake is in thousands of megawatts. That range compares to the P2.34 per kWh offered by his company to distribution utility Manila Electric Co.

“In the last tenders of India, they awarded more than a thousand megawatts to just one company in one go. So we’re hopeful that by bringing the cost of solar energy down to India levels in the Philippines, we’ll be able to convince utilities and policymakers to unlock that same volume,” he said in a previous interview.

He said every year, India awards around 20,000 MW of solar energy as the country targets to have a solar capacity of 100,000 MW by 2022.

For Solar Philippines, the target capacity in India is dependent on the number of contracts it signs in the Philippines as the balance of what has not been taken up of its solar panels will be filled by the overseas market, Mr. Leviste had said.

In the Philippines, the company has around 300 MW of solar energy, either operating or under construction, he said last year. He expected the number to reach 400 MW end-2018.

The company has a manufacturing plant in Sto. Tomas, Batangas that produced solar panels with an equivalent capacity of 800 MW in 2017. Its target output in 2018 was 2,000 MW. — Victor V. Saulon

Renewables

AC Energy to focus on existing expansion projects in Vietnam, Australia

11 February 2019

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Vietnam

MANILA, Philippines — AC Energy Inc., the energy platform of the Ayala conglomerate, is focusing on its over 700-megawatts (MW) renewable energy developments in Vietnam and Australia before finding its fifth market for its regional expansion.

The Ayala firm has recently bought a 25 percent stake in The Blue Circle Pte. Ltd. (TBC), a Singapore-based firm with assets across Southeast Asia, primarily Vietnam, Thailand, Indonesia and Cambodia.

However, the company is still busy in Vietnam and Australia, AC Energy president and CEO Eric Francia said. “There could be a fifth market, but depends on how things evolve,” he said.

For now, AC Energy’s existing markets are Australia, Indonesia, the Philippines and Vietnam. The company is planning to spend $200-to $300-million in the near term for its regional expansion.

“We have a very rich pipeline, our pipeline is focused in Vietnam, the Philippines and Australia,” Francia said.

In Vietnam, AC Energy is developing solar projects and is looking at possible wind projects.

“We’re currently building over 400 megawatts (MW) of solar, 410 MW to be exact,” Francia said. “But we’re also looking at wind in Vietnam. Right now, we are looking at projects somewhere in the 500 to 1,000 MW.”

The wind projects should be shovel ready by first quarter of 2020 to meet the deadline for the Feed-in Tariff (FIT) race.

“That’s imminent because there’s a deadline. We have to complete by November 2021. That means we have to start construction by first quarter of 2020, which means we have to deploy capital in the next 12 to 18 months,” Francia said.

Meanwhile, AC Energy has 3,000 MW renewable energy project developments located in New South Wales, Tasmania and Victoria. Currently, it is working on a 700-MW solar farm in New South Wales.

“In Australia, we hope to be shovel ready by the middle of this year, second quarter to be a little more on the hopeful side. We’re doing a 700 MW solar in New South Wales, that hopefully will be shovel ready in the middle of the year,” Francia said.

He said the solar project might be done in phases since it is going to require significant investment.

At home, AC Energy has laid down several projects but is constrained to develop these in one go because of the oversupply in the market.

“We have a strong pipeline here. But because of supply-demand situation here in the Philippines, we’re not planning to roll out aggressively our renewables, maybe 100 MW here and there over the next couple of years, nothing massive,” Francia said.

These bits of projects are solar developments in Luzon.

“We’re focusing now on solar. Modest size, 100 to 200 MW over the next one to two years is what we’re looking at as possible projects to be constructed here…in Luzon,” Francia said.

These projects will help AC Energy meet its 5,000-MW target by 2025, a ramp up from the previous target of 2,000 MW by 2020.

Based on its equity interest in power generation businesses, it owns approximately 1.7 GW of generation capacity in operations and under construction.

Last year, it generated 2,800 gigawatt-hours of energy, of which 48 percent was from renewable sources.

Electricity/Power Grid

Companies await electric vehicle regulation

11 February 2019

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Indonesia

Several companies have expressed their readiness to develop and operate electric vehicles although the government has not yet completed a regulation that would provide incentives for their development and adoption.

PT Bakrie & Brothers has announced that it would soon launch an electric bus, produced in cooperation with Chinese automaker Build Your Dreams Auto (BYD).

Bakrie and Brothers spokesman Bayu Nimpuno said in Jakarta on Sunday the company would import completely built up (CBU) vehicles from China, while “the company is preparing its own electric vehicles produced domestically”.

“We plan to sell [the buses] to provincial governments for city-based public transportation,” Buyu said as reported by kontan.co.id.

Meanwhile, BMW Group Indonesia vice president of corporate communication Jodie O’tania said BMW Indonesia had also expressed its readiness to develop a range of low-emission vehicles. He added that since 2014, BMW had introduced the i8 Coupe and i8 Roadster electric cars in Indonesia.

“We want to see the details of the regulations [on electric cars],” Jodie said, adding that learning from BMW’s experience in other countries, it was difficult to begin introducing fully electric vehicles and that many countries started with plug-in hybrid vehicles.

“If people have started to enjoy the economic value and environmental benefits, they will start to eye [fully] electric cars.”

PT Blue Bird head of investor relations Michael Tene also said the company was still waiting for the government to issue a regulation on electric vehicles. “To use electric cars, Blue Bird, as a company that abides by the law, will wait for the government’s regulation,” he added. (bbn)

Renewables

Renewables to eat up 21% of Thailand’s energy mix by 2028

11 February 2019

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Thailand

Strong government support is pushing reliance away from natural gas-fired power.

The capacity of non-hydro renewables may expand to 21% of Thailand’s total power capacity mix at 14,858 MW by 2028, according to a report by Fitch Solutions.

The report forecasted capacity growth in the renewables sector to be robust over the coming decade driven by the biomass and solar sectors as the Thai government ushers the country away from a heavy reliance on natural gas-fired power.

“This view is also informed by our expectation that coal-fired power growth will stagnate amidst popular opposition, meaning that there are ample opportunities for renewables as the Thai government seeks to deliver increased power sector investment to meet rising electricity demand in the country,” Fitch Solutions explained.

Also read: Thailand’s domestic gas production declines amidst changes in energy mix

Additionally, the report highlighted how local authorities are aiming to raise the share of renewable energy from 10% to 30% in the domestic power mix by 2037 through the country’s Power Development Plan (PDP2018-2037). The plan, which reaffirmed that feed-in-tariffs (FiT) will be available to new renewable power projects to support growth, will also allow peer-to-peer private electricity trading, particularly for solar power distribution.

The plan which was approved by the National Energy Policy Council is expected to take effect from Q2 2019.

“We see little scope for an alternative government to depart from the existing energy policy,” Fitch Solutions noted. The National Strategy Act, which came into force in August 2018, was written into the constitution to ensure policy continuation and implementation regardless of a change in government. Thailand’s parliamentary elections are scheduled for 24 March 2019.

Meanwhile, opportunities in Thailand’s renewable energy market will be supported by a strong demand for electricity on the back of continued economic growth, an increasing population and improving standard of living. The report added that Thailand’s power consumption is forecasted to grow at an average of 3.1% YoY.

Also read: Sembcorp to build 6.2MWp rooftop solar farm in Singapore

Fitch Solutions pointed out that Chinese solar manufacturers have been flooding the Thai market with solar equipment in recent years whilst setting up manufacturing capacity, as Thailand’s high solar radiation levels and large bio-waste from agriculture production provide good natural conditions for renewable energy.

“We forecast solar capacity to more than double between end-2018 and 2028, from 3GW to more than 6.7GW, whilst the biomass capacity will expand from 4GW to 5.8GW over the same time frame,” Fitch Solutions added.

Amidst the growth in renewables capacity, the sector is predicted to not grow fast enough to sustainably offset the country’s heavy reliance on gas for power consumption. The report highlighted that Thailand will still remain highly reliant on natural gas for power over the coming decade, making up nearly 70% of its power mix by 2028.

That being said, the country’s attractive investment environment for renewable energy was highlighted by a number of investments and financial deals closed in early 2019. State-run Electricity Generating Authority of Thailand (EGAT) is expected to start installing floating solar panels in five provinces in April 2019 and begin commercial operations in 202.

Likewise, the Asian Development Bank (ADB) invested an additional $160m (THB5b) into B.Grimm Power which is one of Thailand’s largest power producers on top of a $235, ;pam agreement in 2018 to enhance renewable energy capacity in the region.

“IRENA has also signed a Memorandum of Understanding (MOU) with ASEAN in late-2018 to provide technical support and tools for development and financing into renewable energy in the region,” Fitch Solutions added.

Oil & Gas

Indonesians enjoy cheaper gasoline ahead of election

11 February 2019

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Indonesia

State-owned energy holding company Pertamina lowered the prices of its subsidized and non-subsidized gasoline by up to Rp 800 (6 US cents) per liter on Sunday, a move some consider political ahead of the presidential election in April.

Although proposals to lower or increase fuel prices are made by Pertamina or other fuel distributors, they require the approval of the Energy and Mineral Resources Ministry before taking effect.

Pertamina lowered the price of subsidized gasoline Premium, which is sold under the public service obligation (PSO) scheme, to Rp 6,450 per liter on Java, Madura and Bali islands from the previous price of Rp 6.550.

As for its non-subsidized brands, the new price for Pertamax Turbo (RON 98) in Greater Jakarta is Rp 11,200 per liter, Pertamax (RON 92) Rp 9,850 per liter, while Pertalite gasoline (RON 90) remains at Rp 7,650 per liter.

Meanwhile, prices for non-subsidized diesel fuel are Rp 11,700 per liter for Dex and Rp 10,200 per liter for Dexlite.

Pertamina retail marketing director Mas’ud Khamid said the price adjustments were made following a drop in the global crude oil price and the strengthening of the rupiah against the US dollar.

“We will continue to periodically evaluate the fuel prices,” he said, adding that the fuel prices could differ in each region.

The price adjustment came following the slump in global oil prices after they climbed to above $80 per barrel in early October last year.

The price of fuel is a sensitive issue in the country as fluctuations in fuel prices could significantly affect the prices of other commodities because of the associated costs of transportation.

It could also lead to high inflation, something President Joko “Jokowi” Widodo wishes to avoid as he seeks reelection in April.

In October 2018, Energy and Mineral Resources Minister Ignasius Jonan announced the government’s plan to increase the price of Premium gasoline by 7 percent following the global oil price hike, sparking protests among many Indonesians who rely on the gasoline brand, as it is the cheapest fuel in the country.

The government abruptly dropped the fuel price hike hours later, with State-Owned Enterprises Minister Rini Soemarno stating she and Pertamina had not been informed of the plan, and that the company was not ready to implement it.

Policies on fuel prices have remained an indicator by which the public rates an administration’s performance, according to Saiful Mujani Research and Consulting (SMRC) president director Djayadi Hanan.

This factor led incumbents, including President Jokowi, to resort to populist policies to improve their images and woo voters ahead of elections.

“There is nothing wrong with such policies as long as they are based on rational and objective reasons. Making such policies is one of the incumbent’s advantages,” he told The Jakarta Poston Sunday.

Djayadi said former president Susilo Bambang Yudhoyono had also resorted to such policies ahead of the 2009 presidential election. An incumbent at the time, Yudhoyono was faced with rising global oil prices and high inflation domestically.

However, social policies such as lowering fuel prices in 2008 and 2009 and the direct cash assistance scheme (BLT) helped Yudhoyono gather 60.8 percent of the vote and secure a second term, Djayadi said.

“The policy will at least give Jokowi a positive image and consolidate his support among his base and swing voters,” he said, also mentioning Jokowi’s other populist policies, such as the distribution of land certificates and village funds.

Fabby Tumiwa, executive director of local energy watchdog Institute for Essential Services Reform (IESR) argued that although the move could have been political, it was bound to happen considering the drop in global oil prices.

“The decrease in the prices is small and reflects the downward trend of global oil prices in the past three months. The ICP [Indonesia Crude Price], for example, has hit around US$50 per barrel lately,” he said, adding that private gasoline distributors such as Shell had also lowered their prices.

Energy and Mineral Resources Ministry Oil and Gas Director General Djoko Siswanto denied claims the decision was politically motivated. He said the fuel price adjustments were the result of the slump in global oil prices.

The government has tightened its control of fuel prices by requiring gasoline distribution companies to follow certain formulas in the setting of prices of non-subsidized gasoline. The companies were then required to report their price adjustments to the ministry, Djoko said.

“Fuel prices might have varied following the global oil price drop. So we think it’s important to analyze the data we have collected from the companies to create an evaluation system,” Djoko said during a press briefing at the ministry’s office in Jakarta on Sunday.

He added that the evaluation would be done monthly to adjust the fuel prices. (ars)

Energy Efficiency

Building a green Singapore

11 February 2019

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Singapore

In the concrete jungle of the Central Business District, a red flower-like structure stands out against the skyline.

Called a wind scoop, it perches atop the 40-storey CapitaGreen and its “petals” draw in cooler, cleaner air that is funnelled through the building’s air-conditioning system, helping to save energy on cooling.

It is among the energy-saving features introduced in buildings in recent years, with the Building and Construction Authority (BCA) aiming for 80 per cent of buildings in Singapore to be green by 2030.

Cooling systems are a big drain on power, taking up 40 per cent to 50 per cent of a building’s energy consumption. Together with other energy-saving features, such as a double-skin facade to reduce heat gain, the wind scoop helps CapitaGreen generate monthly savings of about 580,000kwh – equivalent to the energy needed to power about 1,500 four-room Housing Board flats in a month.

The premium Grade A office development by CapitaLand sits on the site that used to house Market Street Car Park and was completed in late 2014.

In one-north, near Buona Vista, sits Galaxis, an integrated development by Ascendas-Singbridge designed to generate 30 per cent more energy savings compared with other buildings.

“This translates to estimated energy and water consumption savings of $900,000 per annum,” said Mr Jeffrey Chua, chief executive of Ascendas-Singbridge Services.

Together with other energy-saving features, such as a double-skin facade to reduce heat gain, the wind scoop helps CapitaGreen generate monthly savings of about 580,000kwh – equivalent to the energy needed to power about 1,500 four-room Housing Board flats in a month.

The building, which consists of a 17-storey business park tower, a two-storey retail podium and a five-storey office block, was completed in late 2014.

Mr Chua said the high efficiency of the air-conditioning system contributes to about two-thirds of the savings. For instance, the pipes and equipment are laid out such that the recirculation of air is reduced.

To maximise energy savings, the developer set up the Ascendas-Singbridge Operations Control Centre in 2017. It monitors the performance of 26 buildings, including Galaxis.

The centre uses data and video analytics to reduce operational downtime and enhance security through early detection and response to incidents and faults. It also monitors toilet use to determine the timing and frequency of cleaning.

It is among the first of such centres here. In February last year, statutory board JTC launched its $15 million J-Ops Command Centre in Jurong Town Hall Road. The centre oversees the facilities of more than 20 JTC buildings.

However, the latest technology is not always limited to gleaming skyscrapers.

One would not expect to find state-of-the-art technology at Joo Chiat Complex, a shopping mall built in 1982 that is known for its textile shops.

However, in 2015, the building underwent a two-year retrofitting process led by energy service company Johnson Controls.

Mr Derek Teo, leader of special verticals and key account management at the company, said: “The building is old, but the underlying chiller technology is one of the latest.

“The retrofitting opens up doors to innovative solutions, such as connecting (the chiller system) to the ‘cloud’, which can help the old building to be connected in a smart digital way.”

If the chiller system is connected to a cloud server, anomalies may be detected before breakdowns, potentially reducing mean repair time by 60 per cent, said Johnson Controls.

Since the chiller plant started running in 2017, close to 1.2 million kwh has been saved, which has helped save $250,000 in utility costs. The amount of energy translates to 503 tonnes of carbon dioxide emissions – equivalent to the emissions produced by the electrical consumption of 125 four-room flats in the same time.

Carbon dioxide is among the greenhouse gases that pollute the environment and contribute to global warming.

In 2017, Joo Chiat Complex won the Green Mark Platinum award, one of the most prestigious accolades for green buildings given by the BCA.

It is crucial that old buildings like Joo Chiat Complex meet green standards. Currently, only about 40 per cent of existing buildings are green.

Besides developers, there are also firms, such as Barghest Building Performance (BBP), which provide energy-saving solutions.

Using optimisation algorithms to improve the efficiency of installed equipment, its team of 40 engineers aims to shave energy use in 26 sites across eight markets, including Singapore.

BBP chief executive Poyan Rajamand said it has seen millions of dollars in annual savings for customers, which include tech giant HP and Resorts World Sentosa.

The firm, which was started in 2012, is now working on using wireless sensors to improve monitoring of parameters such as temperature, humidity and water pressure.

Mr Rajamand pointed to the increasing trend of Singapore energy-saving companies going overseas to share their knowledge.

“It’s becoming an export industry,” he said. “Singapore companies have a competitive advantage because the authorities here have been driving energy efficiency for decades.”

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