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  • Renewables
18 October 2018

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  • Cambodia

Bentley Systems, a leading provider of advancing infrastructure solutions, said greenfield and brownfield substation projects can reap design collaboration and construction benefits from the  building information modelling (BIM) and realty modelling.

Whether designing greenfield substation projects from the ground up or performing brownfield design associated with existing substation infrastructure, intelligent 3D substation design employing BIM processes and reality modelling demonstrates cost and time-saving benefits, said the company in a statement.

In a greenfield project in Cambodia, Pestech undertook a project for Diamond Power for the conceptual design through commissioning of the 230-kV Kratie and Kampong Cham Substation and Transmission System. The project will support the growing population and tourism industry.

The Kratie 230/22-kV substation will connect with the Sesan hydropower plant, which is under construction in the upper Mekong area, and also serve as a major collection center of power from several mini hydropower plants, connecting to the national power grid of Cambodia.

Visualization of the 3D substation design was essential to prepare and plan work before and during construction. The site was located far from the town within forest and hilly roads and visualisation of the design with accurate dimensions was a significant challenge, which was successfully overcome using Bentley Substation and Bentley Navigator.

ProjectWise was used for collaboration across departments on-site and offsite including procurement, management, engineering, and construction. The project is expected to be completed in November 2017 and Pestech will also be responsible for operating the power transmission system for a concession period of 25 years.

The design of past projects was done manually, via hand-drawn and manual calculation of components and third-party CAD software. This approach was prone to human error, time consuming, and resulted in inconsistent quality.

Pestech’s engineering team reported many benefits of Bentley Substation from the unified design environment facilitating cross-discipline collaboration, automated design drawing and reports, enforcement of engineering standards, and more. These included cost savings in procurement, reduction in errors, and substantial time savings. A detailed analysis comparing the use of Bentley applications with previous methods estimated time savings of up to 70 percent were achieved.

In contrast, approximately 95 per cent of Pacific Gas & Electric’s (PG&E) annual $1-billion substation budget is spent on existing brownfield substations. Since 2016, PG&E has been pioneering the use of a combination of aerial equipment such as man lifts, unmanned aerial vehicles (UAVs), and on-ground photo equipment to capture images of existing substations.

Bentley’s ContextCapture is used to process these images and produce accurate 3D reality meshes, which can be referenced into Bentley Substation to complete the entire substation design in 3D.

ContextCapture models allow effective collaboration between the Transmission Line, Land Planning and Zoning, and the Electrical and Civil Substation Engineering departments. ProjectWise is used to manage the models and facilitate collaboration.

With up-to-date 3D models, all stakeholders can clearly see the impact of each department on the project, avoiding costly conflicts in the field and allowing for more streamlined, effective, and sustainable long-term planning.

Ralph Hansen, construction supervisor, PG&E, said: “Having a complete 3D model at the time of constructability review allows us to measure electrical and physical clearance in real time, which helps eliminate costly conflicts during the construction phases. With today’s increasing substation complexity and decreasing substation footprint, having a 3D model is a must.”

The South Street 115/11.5/23-kv indoor substation project executed by TRC for National Grid involved rebuilding South Street Substation in Providence, Rhode Island, converting the existing three 115-kV overhead line supply circuits to underground cable circuits, and re-routing the existing 23- and 11.5-kV underground feeder getaway facilities.

To complete the project on time and on budget required TRC to integrate existing conditions to the new construction while the substation remained in operation. This project was also in a highly visible and congested area, which caused concern over the aesthetics of the site and building.

The project had a very complicated building design and required incorporating a large number of subcontractor files in third-party formats to a single master design model for cross-discipline checking. These files were placed in ProjectWise and provided an indisputable record of what was received from subcontractors.

Bentley Substation was used to integrate these different formats into the Bentley Substation models by TRC staff in design centrrs across the country. As a result, TRC identified issues before construction or fabrication that would have led to delays at the site and cost overruns. Bentley Substation was used to do full 3D client walkthroughs for interior and exterior design reviews and the 3D models were also used in the renderings for the planning board and for public comment.

Jason Poissonnier, TRC ProjectWise administrator, said: “Bentley Substation along with ProjectWise was instrumental in successfully completing the South Street project, which was in a congested, highly visible area. TRC utilised resources from several offices who collaborated on over 2,000 CAD files as well as Excel, Word, PowerPoint, Outlook, PDF, TIFF, and other files.”

“The ability to incorporate different types of design files from subcontractors into the 3D model made the design reviews truly all-encompassing and resulted in identifying many areas that needed redesign, thereby avoiding costly changes later during construction,” he added.-TradeArabia News Service

  • Oil & Gas
18 October 2018

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  • Brunei Darussalam

Real GDP in 2017 was stronger than expected, rebounding to 1.3 per cent supported by both the O&G and non-O&G sectors.

On September 17, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Brunei Darussalam.

Brunei Darussalam’s economy has been adjusting well to lower oil prices since 2014, with the authorities undertaking wide-ranging reforms. The decline in oil and gas (O&G) prices led to large budget deficits and narrower current account surpluses. In response, the authorities in 2015 launched a reform program aimed at (i) ensuring long-term fiscal sustainability and intergenerational equity and (ii) fostering economic diversification by improving the business climate. These reforms have started to bear fruit, as growth has begun to rebound and inflation has returned to positive territory.

Real GDP in 2017 was stronger than expected, rebounding to 1.3 per cent supported by both the O&G and non-O&G sectors. Higher liquified natural gas (LNG) and methanol production drove O&G sector growth, more than offsetting lower oil production, while non-O&G growth was mainly underpinned by the ongoing downstream construction projects. Recent data indicate that the recovery carried over into early 2018.

The growth momentum is expected to continue, with growth accelerating to 2.3 per cent in 2018. Over the medium term, economic growth and macroeconomic balances are expected to strengthen further. The start of downstream production—including from the Hengyi refinery and Brunei Fertilizer Industries (BFI)—and stronger O&G activities, will result in robust GDP growth and exports in 2019–23. Imports linked to the FDI project execution are likely to keep the current account at a moderate surplus in 2018, but the surplus is expected to increase from 2019 onward. The fiscal position is also expected to recover over the medium term but remains vulnerable to O&G price shocks. Inflation is expected to remain low but positive. Risks to the near-term outlook are broadly balanced, although substantial uncertainty surrounds O&G prices.

The authorities have made progress in implementing fiscal consolidation, adjusting financial sector regulation, improving the business climate, attracting foreign direct investment (FDI), and supporting micro, small and medium enterprises (MSMEs). From 2016 to 2018, Brunei experienced the largest cumulative improvement in the World Bank Doing Business score, particularly with a remarkable improvement in access to credit. Major FDI projects underway in the downstream sector—the Hengyi refinery and BFI—together with other FDI projects within other priority business clusters should contribute towards achieving the goals of more dynamic and sustainable economic growth under the Wawasan 2035 development plan. The Financial Sector Blueprint articulates the authorities’ plans for the financial sector’s developments over the medium-term. Its five pillars identify areas for action that would help foster new international financial linkages for the country and boost the financial sector’s contribution to GDP—a central component of the diversification strategy.

Executive Board Assessment

Executive Directors noted that Brunei Darussalam has been adjusting well to lower oil and gas (O&G) prices since 2014. Directors welcomed the rebound in economic growth and the prospects for continued recovery over the medium term. They commended the authorities for their wide-ranging reforms. Directors noted, however, that important risks are clouding the outlook, including uncertainty surrounding O&G prices and production, rising protectionism and tighter global financial conditions. Against this background, they underscored the need to continue reform implementation to ensure long-term sustainability and intergenerational equity, increase productivity and competitiveness, diversify the sources of growth, and build resilience to shocks.

Directors emphasized that continued fiscal consolidation is needed to bring the fiscal position closer to that required by intergenerational equity considerations. They stressed that fiscal policy reforms should focus on rationalizing current expenditure, including gradually reforming fuel subsidies and containing the wage bill by streamlining the civil service, as well as diversifying revenues. Directors encouraged the authorities to formalize a medium-term fiscal framework and intensify public financial management reforms. This would require incorporating subsidies and extra-budgetary funds in the budget presentation, improving management, and better monitoring of public expenditure.

Directors noted that the Brunei dollar’s peg to the Singapore dollar remains appropriate, providing a credible monetary anchor and stability to the financial system.

Directors encouraged further efforts towards financial sector development, while also underscoring the need for improvements in banking regulation and supervision to preserve financial stability. They underscored the benefits of broadening the investor base, establishing a secondary bond market, and creating a stock exchange. Directors welcomed plans to operationalize the macroprudential surveillance framework and supported the ongoing development of a contingency planning and crisis management framework for the banking system.

Directors commended the authorities’ efforts towards economic diversification. They considered that sustained efforts in enhancing the business environment, supporting the growth of micro, small and medium enterprises (MSME) and raising human capital would help develop the non-O&G and private sectors and attract FDI. However, further measures are needed to generate stronger positive spillovers from FDI to the rest of the economy. Support for MSMEs should also be assessed regularly.

Directors welcomed the steps taken to improve statistical compilation and build technical capacity. They encouraged further efforts to address remaining data and dissemination gaps. In this context, they encouraged the authorities to undertake a data ROSC.

  • Oil & Gas
18 October 2018

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  • Myanmar

NAYPYITAW—The government cannot control the fuel oil price, which is determined by market forces and the law of supply and demand, Ministry of Electricity and Energy managing director U Thant Sin said.

At a press conference on Thursday, the managing director said fuel oil prices were unlikely to come down any time soon due to the kyat’s decline against the Singapore dollar and other currencies.

“We can’t bring down fuel oil prices in the international market. Similarly, we can’t control domestic market prices, which fluctuate based on the [kyat-dollar] exchange rate and market prices in Singapore,” U Thant Sin said.

“But we are always monitoring the market to make sure that the prices of imported fuel oil are fair,” he added.

The kyat has slumped steeply against the dollar over the past four months, from 1,346 kyats per dollar on June 11 to 1,585 kyats per dollar on Friday. The kyat has also weakened against the Singapore dollar. The market rate was 1,148 kyats to the Singapore dollar on Friday.

Earlier this month, the Myanmar Fuel Oil Importers and Distributors Association said fuel oil prices would remain high due to price increases in Singapore, a key source of Myanmar’s fuel imports.

“We will freeze the price if the selling price in the market is unreasonably high. We have the authority to do so. But, as we’ve built a free market economy, we have to be careful with price restrictions,” said U Thant Sin.

The ministry has intervened in the market twice before, in December 2017 and April 2018, following price spikes.

Fuel oil prices have increased by around 300 kyats per liter over the past three months, with prices varying from place to place depending on transportation costs.

“The government can’t handle this; it can’t exert influence on fuel oil importers,” said U Kyaw Thura, a resident of Pyinmana Township.

“The government should intervene, for example by selling reserve fuel oil or by inviting foreign investment in fuel oil distribution, so that the market is not monopolized,” he added.

The Myanmar Investment Commission relaxed regulations last year and allowed 100-percent-foreign-owned companies to invest in local fuel oil distribution. Since then a few foreign companies have inquired about the possibility, but none has made an official proposal.

“[U.S.-based] Shell Oil Company approached us recently. We asked why they hadn’t yet come [to invest in Myanmar]. They said they are still examining the feasibility [of such a move],” U Thant Sin said.

The ministry is also considering establishing joint ventures with foreign companies to supply fuel oil in Myanmar, he said.

In response to the fuel oil price increase in the domestic market, the Ministry of Electricity and Energy has sold domestically produced petroleum, but this is only suitable for use in motorbikes.

Since April, the ministry has sold 15 million gallons of domestically produced petroleum.

  • Oil & Gas
18 October 2018

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  • Myanmar

Sembcorp Industries’ US$300 million gas-fired power plant in Myingyan, Mandalay commenced full commercial operations on Wednesday following its first phase of operations in May.

The 225-megawatt Sembcorp Myingyan Independent Power Plant (IPP) is one of the largest power plants of its kind in the country and also among the most efficient, Dennis Foo, managing director of Sembcorp Myingyan Power Co, told The Myanmar Times.

The facility utilises advanced combined-cycle gas turbine technology that maximises power output while minimising emissions. The company said in a statement that this is “in line with our sustainability commitment to reduce carbon emission intensity by close to 25pc by 2022.”

The plant is expected to generate around 1,500 gigawatt hours of power which will be supplied to state-owned Electric Power Generation Enterprise (EPGE).

Neil McGregor, Sembcorp’s head, said, Sembcorp Myingyan IPP will serve Myanmar for decades to come, “providing power to support the country’s continued development, and thereby enhancing living standards there.”

Mr Foo added that the IPP was completed with “an uncompromising focus on health, safety, security and the environment.”

The project’s completion follows the signing of a long-term power purchase agreement as well as a build-operate-transfer agreement with the Ministry of Electricity and Energy. Sembcorp will operate the plant for 22 years, after which the facility will be transferred to the government.

The project is expected to benefit 5 million residential customers with improved access to electricity, according to the International Finance Corporation, which served as the lead transaction adviser for the project tender.

Myanmar has one of the lowest electrification rates in the world, with less than 30pc of the population having access to electricity and annual per capita electricity consumption at less than 100 kWh. In particular, many rural areas have almost no electricity at all. With regular blackouts and electricity shortages, Nay Pyi Taw hopes that the privately financed IPP can augment power supply and alleviate short- and medium-term power needs.

  • Oil & Gas
18 October 2018

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  • Philippines

ENERGY COMPANIES have counted the cost of the peso depreciation against the US dollar, prompting them to adopt measures to soften the impact on their finances, operations and investment decisions.

“In the short-term operating perspective, you’d have to worry if the movement, the devaluation of the peso, has an impact on the growth rate of the economy,” said Joseph S. Yu, president and chief executive officer of SN Aboitiz Power (SNAP), the joint venture of Norway’s SN Power AS and Aboitiz Power Corp.

“If it becomes inflationary, it begins to affect the growth rate and that affects the entire pricing structure in the market,” he said in an interview.

For SNAP, which owns a number of hydroelectric power plants in north Luzon, that pricing structure affects the development of its projects, the latest of which is an energy complex composed of the 20-megawatt (MW) Ollilicon and the 120-MW Alimit hydro power plants.

“In the long term, if you look at developing projects, the investment cost of projects would go up from a peso perspective. So a project, let’s say $500 million like Alimit, if that would have been P25 billion if it’s P50 per dollar, and then if it were now P60 that would become a P30-billion project,” Mr. Yu said.

“And then you could see how it would make it much, much more difficult if you had to recover the investment of something like that,” he added.

SNAP has temporarily suspended the technical studies for the third component of complex, the 250-MW Alimit pumped storage facility, because of “market constraints.”

Angelito U. Lantin, Manila Electric Co. (Meralco) senior vice-president, shared the same sentiment as its unit Meralco PowerGen Corp. (MGen) is building several power plants, which are now in different stages of development.

“I think P47 [to a dollar was the exchange rate] at the time when we submitted the PSA (power supply agreement) to ERC (Energy Regulatory Commission). Now it’s over P54 so makikita mo na lang ‘yung (you’ll see the) percentage [difference],” he said.

“Our equipment are mostly, well all of it, are imported so we have to pay in US dollars. And then, of course, you pay pesos to acquire the dollars. Now you need to have more pesos to buy the dollars so that you can purchase the imported equipment,” he said.

MGen is leading the development of three power plants — all coal-fired. Its unit Atimonan One Energy, Inc. (AIE) is building a two-unit ultra supercritical coal-fired power plant, each with a capacity of 600-MW in Atimonan, Quezon.

Another unit, San Buenaventura Power Ltd. Co. (SBPL), is constructing a 455-MW facility in Mauban, Quezon province. It will be the country’s first supercritical coal-fired power plant. The plant was targeted to be completed in mid-2019.

The third project, a coal-fired power plant under Redondo Peninsula Energy, Inc., has two units, each with a capacity of 300 MW using the circulating fluidized bed technology.

Of the three, only SBPL secured project financing, through a P42.15-billion omnibus agreement for a senior-term loan with several banks. For AIE, MGen previously said it had signed mandate letters with seven banks for the debt financing portion or P107 billion of the P135-billion project.

LOSSES
For state-led Power Sector Assets and Liabilities Management Corp. (PSALM), the losses from the weakening peso are huge and expanding.

“Sadly, we get hit around P8.4 billion for every peso devaluation. Medyo malaki siya (It’s quite big) but then we just have to do our best under the circumstances,” said Irene Joy B. Garcia, PSALM president and chief executive officer.

PSALM, which has the bulk of its debts denominated in dollars, is now trying to optimize and move forward with privatizing the government’s energy assets — its mandate under the law.

Ms. Garcia said the company had changed its strategy by now focusing on the sale of its real estate holdings.

“In fact, we have streamlined and parang (sort of) fixed the rules for privatization for the real property assets so that once we roll that out mas mabilis na (it will be faster) and we can generate more income,” she said.

PSALM has lined up for sale several real estate assets this year and next. Earlier this month, it called on bidders to signify their interest to participate in the privatization of the 650-MW Malaya thermal power plant Pililla, Rizal and its underlying land. It also plans to rebid a 20,975-square-meter land in Manila on which a thermal power plant used to stand.

“One of the things that I have done when i came into office is really to review all the receivables, [the] unpaid loans of a lot of the electric cooperatives… We have reached out to them to try to come up with a reasonable payment arrangement kaysa (instead of) zero,” she said.

Ms. Garcia, who assumed her post in May this year, said the compound on which state-led National Power Corp. and privately owned National Grid Corporation of the Philippines stand on are up for re-development to generate more income for the company.

With expectations of the peso weakening further against the dollar, the future looks bleak for these companies.

18 October 2018

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  • Philippines

DAVAO CITY — Energy officials said more investors are needed in the power supply sector, particularly for Mindanao, to meet the island’s projected 10,200-megawatt (MW) additional capacity requirement by 2040.

Department of Energy (DoE) Assistant Secretary Redentor E. Delola, speaking at the 2018 Mindanao Energy Investment Forum held here Oct. 11, said that while a 1,400-MW surplus power for the southern mainland is expected within the medium term, more generation plants are needed for the long term.

“This surplus will, however, not last for very long considering Mindanao’s growth. There is a need for more power plants and more sources of energy to avoid a repeat of the Mindanao power crisis four years ago,” he said.

A total of 1,332.43 MW of committed power projects are expected to enter the grid between 2018 to 2025.

Mr. Delola said they are also hopeful that another 1,937.28 MW of proposed power projects will push through before 2025.

Mindanao currently has a capacity of about 2,400 MW, based on data from the National Grid Corporation of the Philippines (NGCP).

The NGCP’s Mindanao-Visayas Interconnection Project (MVIP), which will loop in Mindanao to the linked Visayas-Luzon grids, is also underway and targeted for completion by 2020. The MVIP will pave the way for a nationwide sharing of supply.

The Mindanao Development Authority (MinDA), meanwhile, said the guiding policy is to put premium on renewable energy investments to achieve a balanced mix of 50-50 with fossil fuel sources.

The present mix in Mindanao is 60% fossil fuel, mainly from coal-fired plants, and 40% green energy.

“We want to make renewable energy as attractive to investors….What we want in the future is essentially to make renewable energy as attractive as conventional energy,” MinDA Assistant Secretary Romeo M. Montenegro said at the forum.

“Our target is to have a diversified mix of energy source but we put a premium on renewable energy,” he added.

Mr. Montenegro, who also heads the technical working group of the Mindanao Power Monitoring Committee, said they are glad to see the emergence of generation assets located at load points which decentralizes sourcing and minimizes supply disruptions.

There are currently 33 embedded power plants and 20 grid-connected plants in Mindanao. — Carmencita A. Carillo

18 October 2018

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  • Indonesia

In a bid to attract more investment to support the country’s economic growth, Indonesia recently issued a new regulation granting a 100 percent Corporate Income Tax (CIT) cut to new FDI-backed businesses.

The government has further announced that the tax holiday will now be offered to new investors in all business sectors in the country. Previously, it was available to investments in any of the 17 pioneer industries including transportation, telecommunications, robotic components, oil and gas refinery, train engines, medical devices, pharmaceutical raw materials, power plant machinery, and processing of metals and agricultural products among others. Pioneer industries are those that create added value, introduce advanced technology and have strategic value for the national economy. Originally, the provision was available to only eight such industries.

Tax holiday allowance

Under the latest regulation, the newly established companies with a minimum investment of Rp500 billion (US$36.4 million) can avail 100 percent CIT exemption for a period in proportion to the scale of their investment.

Investments starting from Rp500 billion (US$36.4 million) up to under Rp1 trillion (US$72.5 million) can enjoy exemption from CIT for the first five years, while those investing more than Rp30 trillion (US$2.2 billion) can enjoy a maximum CIT exemption for 20 years.

In addition, investors can enjoy a 50 percent tax cut in the transition period of two years, following the expiry of the initial the tax holiday.

Earlier, the rate of tax allowance varied from 10 percent to 100 percent for a maximum of 15 years, and only those companies with a minimum investment of Rp1 trillion (US$72.5 million) could avail such benefit.

  • Renewables
18 October 2018

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  • Cambodia

As the world increasingly opens up to renewable energy, Southeast Asia Globe speaks to Olivier Duguet, CEO and co-founder of the Blue Circle, a renewable independent power producer based in Southeast Asia, to find out more about the region’s future energy path. The company has already begun work on a wind farm in Ninh Thuan province in South Vietnam – one of the largest in the region – and has its sights set on creating a similar farm in Cambodia

You’re going to open your first wind project in Cambodia next year. What are your expectations for this project?
That will only be the very first test phase of a much larger deployment of wind power in Cambodia. We have been working on this for the last four years. We came to an agreement with the government, with the Ministry of Mines and Energy, on sizing a first test phase of 13MW, meaning basically four turbines. So a small first phase mainly to demonstrate to EDC (Electricité du Cambodge) that it’s feasible; that it’s not impacting the grid. So that’s the purpose of this first phase, which we hope of course will lead to much more in the future on the same site. We have much more space with the same wind resource to build 200 to 300MW wind farms.

Regarding the land where the turbines will be situated – which is in Kampot province – have there been any issues or obstacles?
With wind power – different to solar – we are mainly looking at sites far from anybody. Far from any villages, schools, towns or whatever it is. So we have an agreement already with the owner of the land on the site to do these first four test turbines, but there is [also space to add] up to 15 more turbines in the future, so it’s already secured.

Just talking about Cambodia specifically, do you believe there are enough sites where wind can be effectively harnessed?
Definitely yes. We have been collecting data for [four years] so we now know exactly where we can go, how much [each site] will produce, and what are the economics now of the site. So to answer your question, yes. From our understanding of the Cambodian market we think that there’s largely a possibility of 500MW plus of commercial wind power potential in Cambodia.

“I used to joke about it, but each time we speak in the region with utilities or governments dealing with energy they always tell us there are three imperatives we need to comply with if we want to sell our electricity: price, price and price”.

Renewable energy options such as wind, solar and hydropower have been around for a long time, but it seems like now these are being pushed forward a lot more around the world, and to a certain extent in Southeast Asia. Why now?
Two reasons, I think. The first one is of course climate change – the need to fight climate change and the Paris Agreement – so it’s pushing global conscience and political will. And the second reason why it’s now reaching Southeast Asia is the declining costs of these technologies.

Your website states that “free-enterprise capitalism is the most powerful system for social cooperation and human progress ever conceived.” Do you believe that renewable energy development should be free from political interference?
It’s a more philosophical question, but you’re totally right to mention this. The energy sector [is] highly dependent on state regulation and state decisions. So yes, I think it’s better to leave the private sector to deal with the business decisions, but business decisions come after a political decision.

Energy, I think, is a special case. It’s is a special sector because it has very long term assets, a long-term vision. You build a grid, you build power stations for fifty years or even more… and most of the time the most effective way to do it is to make long-term planning.

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