News Clipping Archive - Page 1228 of 1232

Jonan: Indonesia Commits to Implement Clean Energy

16 October 2018

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Indonesia

JAKARTA, NNC – Indonesia Minister of Energy and Mineral Resources Ignasius Jonan onTuesday (10/09) received the visit of the Minister of Foreign Trade and Development of Finland, Anna-Mari Virolainen. The meeting was then followed by the 2018 Indonesia-Finland Business Seminar. During this visit, Finland brought business delegates representing various sectors.

Jonan revealed that the long-term cooperation relationship between Indonesia and Finland has developed in recent years. This collaboration has also produced results. “As we know, Indonesia and Finland have built a number of joint businesses, including diesel engine companies that have been implemented, including in Papua, as well as several companies engaged in new renewable energy,” said Jonan.

To the participants of this forum, Jonan also explained that the Indonesian government was focused on developing new renewable energy, such as through the obligation to use biodiesel mixture of 20 percent in diesel fuel oil, and establish regulations regarding Solar PV on rooftoop. “Renewable energy development in Indonesia is a long-term program, and is currently in its initial stages. Although the commitment in Paris has been signed in the summer of 2015, it is still valid today. We try to reach at least 23% of the energy mix by 2025. Often people ask whether this target can be achieved? Is it difficult? Or is it easy? Or does it makes sense? But I say realistically we will continue to strive to develop to achieve the target,” he said.

Indonesia also has a strong commitment in applying clean energy to increase energy supply. This is mandated in the National Energy Policy to change Indonesia’s energy sector by reducing oil consumption and expanding renewable energy. Likewise with the implementation of energy efficiency with a target to reduce energy intensity in all sectors by 1% per year.

“The commitment to reduce the greenhouse effect from 29% in 2030 is the main goal. Although it is not easy, we continue to try to disseminate the impact of reducing greenhouse gases to the public,” continued Jonan.

On this occasion, Minister Anna-Mari Virolainen also expressed her gratitude to the Ministry of Energy and Mineral Resources for the opportunity given in business cooperation in the energy sector. “Some Finnish companies work in remote areas. This is a form of our commitment to support the Government of Indonesia in providing access to energy for all Indonesian people,” said Minister Anna-Mari Virolainen

Energy is a major factor in economic development and development. For this reason the Government of Finland is giving more attention to its energy management. Companies in Finland are very trying to create energy at affordable rates. This makes Finland one of the countries with low cost energy tariffs in Europe.

Indonesian Finnish cooperation has been carried out since 2011. During the period of 2011 to 2014, the Ministry of Energy and Mineral Resources collaborated with the Government of Finland to implement the Energy and Environment Partnership with Indonesia/EEP Indonesia program. The program aims to improve energy access by utilizing renewable energy sources, reduce greenhouse gas emissions, reduce the impact of climate change and improve economic prosperity by utilizing renewable energy. The implementation was the construction of livestock-fueled biogas units in 15 villages, the use of biogas in sago flour mills, the construction of a biomass gasification system unit with two reactors that produced fuel gas and the use of high efficiency biomass stoves in six villages.

After the signing of the Memorandum of Understanding in 2015, the Indonesia-Finland Joint Working Group on Energy was held in Jakarta in 2016. Within the working group there was the Power Sub-Working Group, the Bioenergy Sub-Working Group, and the Sub-Working Group Energy Efficiency. Subsequently, on June 6, 2017, Indonesia – Finland Business Forum was held, which aims to encourage cooperation between business actors from both countries and increase direct investment to Indonesia in the energy sector.

Ending his speech, Jonan emphasized the importance of facilitating the private sector from two countries. Promotion of private sector relations in the exchange of expertise and development of renewable energy resources and energy conservation. Engagement between Indonesian and Finnish companies in the initiative will help accelerate the development of renewable energy and energy conservation also play an important role.

“I hope there will be a discussion that can produce a real business. I also hope this relationship can be improved through understanding a better new renewable energy sector so that our cooperation can be established in the long run.

Oil & Gas

Analysis: Malaysia’s Petronas gears up for new investment cycle

16 October 2018

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Malaysia

RAPID refinery completion will free MYR15-20 billion/year capex Oil price rebound allows Petronas to start new investment cycle Petronas spends MYR30 billion/year just to maintain reserves.

Singapore — Malaysia’s national oil company Petronas is poised for its next wave of investments, in line with the recent final investment decision on the LNG Canada project, as the completion of its RAPID refinery frees capex and higher oil prices boost cash flows.

With the 300,000 b/d RAPID project starting in early 2019, not only is MYR15-20 billion ($3.6-4.8 billion) in annual capex freed up, but Petronas has also received nearly MYR29.5 billion following the transaction with Saudi Aramco earlier this year, when the Middle Eastern oil producer joined the downstream project.

The additional cash gives Petronas further financial flexibility to either increase reserves or undertake longer-term projects like LNG Canada, according to Xavier Jean, senior director of corporate ratings at S&P Global Ratings.

This is a big shift from mid-2017, when oil prices were hovering around $50/b and the company was forced to shelve its Pacific NorthWest LNG project at Port Edward in British Columbia, Canada, citing “changes in market conditions.”

At the time, Petronas’ capex commitments were spread thin between maintaining the size of its petroleum reserves, downstream investments at the Pengerang RAPID refinery, dividend payments to the government and potentially high capex LNG projects in North America.

Petronas was in fact digging into its cash pile in order to finance an elevated capital spending plan and steady dividend distributions.

S&P Global Ratings estimated that Petronas’ spending on investments (mostly on its RAPID project and reserve replacement) and dividends exceeded the cash generated from its operations by nearly MYR27 billion ($6.5 billion) for the fiscal year ended December 31, 2015, and by almost MYR17 billion for the year to December 31, 2016.

The state-run oil company needs to spend approximately MYR30 billion annually just to maintain its reserve life, Jean said.

Given its conservative financial policies and balance sheet management strategy, it’s no surprise why Petronas decided to call off the Pacific NorthWest LNG project that would have been difficult to finance without depleting cash reserves further.

But by the end of 2017, Brent crude prices had bounced back to $67/b and along with it, Petronas’ cash flows had strengthened.

Petronas’ annual capital spending is estimated to average MYR50 billion-MYR55 billion in 2018, 2019, and 2020, with spending geared toward completing downstream projects in 2018, and focused on growing reserves in 2019 and 2020, according to S&P Global Ratings.

Petronas didn’t respond to queries seeking comment on its capex spending.

NEW UPSTREAM INVESTMENT CYCLE

In May 2018, Petronas surprised the market with the acquisition of a 25% stake in the LNG Canada project, which went on to reach a final investment decision earlier this week, for two trains with a capacity of 14 million mt/year.

The investment was suitable given Petronas’ declining domestic oil and gas production.

Petronas’ focus on resources and production in Malaysia, where more than half of its resources are located, is a relative weakness for its earnings quality compared with larger and more geographically diversified peers like Norway’s Equinor, Italy’s Eni SpA and China’s CNOOC Ltd, S&P Global Ratings said.

LNG Canada also allowed Petronas to exploit its acreage in the Western Canada Sedimentary Basin, first acquired through an investment in Calgary-based Progress Energy Resources in 2011, meant to develop the Montney shale gas assets in British Columbia.

Petronas holds an estimated 52 Tcf of resources in its North Montney acreage, making Canada the second-largest resource holder in its portfolio after Malaysia, according to Wood Mackenzie.

It expects Petronas’ share of capex in LNG Canada at $5 billion between 2018 and 2023 until the first LNG cargo is shipped, including spending on Montney feedgas exploitation. In addition to natural gas, Montney also yields 10-20% natural gas liquids that will boost returns.

Lastly, LNG Canada will add North American gas diversification to Petronas’ LNG portfolio that already comprises Malaysian LNG, Australian LNG from Gladstone and Egyptian LNG.

The project will start production in five years, when the net LNG balance in Asia is expected to tighten as demand starts outpacing supply, which will increase reliance on supplies from other regions, Jeff Moore, Asia LNG manager at Platts Analytics, said. Wood Mackenzie expects Petronas to maintain its long LNG position with 14 million mt/year of uncontracted LNG through to 2030, and LNG Canada contributing 3.25 million mt/year to this uncontracted tranche.

Petronas now needs to divert attention to boosting its upstream profile as global E&P spending gradually limps back to normal. It remains to be seen whether this will extend to the high profile Malaysian deepwater projects that had stalled at low oil.

Barclays said in its global 2018 E&P spending outlook that overall spending from Asia and Australia is expected to increase 6%, led by PetroChina and Petronas.

Singapore banks need to warm up to renewable energy financing

16 October 2018

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THE launch in South Korea on Monday of the Intergovernmental Panel on Climate Change (IPCC) report on avoiding runaway global warming hammered home some stark realities about the need to rapidly address climate change.

The report stated that keeping warming to 1.5 rather than two degrees could save 10 million people from losing their homes to rising sea levels. This is no small matter, particularly for Singapore, which is already investing millions of dollars in protecting critical infrastructure from rising seas. Singapore expects sea levels to rise by 0.76 metres by 2100.

Faced with rising sea levels and more powerful storms as the climate changes, airports around the world are having to invest in protective measures including higher runways, seawalls and better drainage systems. Of the world’s top 50 airports in terms of air traffic, 15 are at an elevation of less than 10 metre above sea level, making them particularly vulnerable to the effects of climate change.

Given the impact on investments, it’s no surprise that financial institutions around the world are starting to address the self-defeating strategy of enabling greenhouse-intensive projects that damage value in investments elsewhere. Since burning coal is the largest culprit in terms of carbon emissions, it stands to reason that the dirtiest of the fossil fuels would be the first item on the chopping block.

In September, Standard Chartered became the latest institution to rule out finance for “any new coal-fired power plant projects, including expansions, in any location”. It follows hot on the heels of Singapore’s big three banks (DBS, OCBC and UOB), Japan’s big three banks (MUFG, SMBC and Mizuho) as well as HSBC, which have all made positive moves this year and updated their policies on coal lending.

Clear, scientific reality

While its peers in Singapore, Hong Kong and Japan have fiddled around the margins with their coal policies, leaving the door open to finance new coal plants of particular types or in particular locations, Standard Chartered’s is the only policy that recognises the clear, scientific reality: if we are to avoid runaway climate change, we need to stop building new dirty coal power plants, full stop.

Standard Chartered has also been a major player in the coal market. Since 2010, it has loaned at least US$1.8 billion to coal power, including US$820 million to projects that added 10.6 Gigawatts of additional coal power capacity.

It was also active in syndicates for several new coal power plants prior to the policy update. But those projects are now incompatible with a policy that rules out an energy source that – in the words of Standard Chartered’s chair, Jose Viñals – results in “pollution that poisons both the environment and the people that live in it, higher temperatures that contribute to extreme weather conditions and destroy habitats, and rising sea levels”.

Those new coal power proposals will now need to look elsewhere for finance. And today, that elsewhere could mean Singapore.

Unfortunately, whilst Singapore is under threat from the affects of climate change and its government is in the midst of a vital “year of climate action”, coal developers in Vietnam and elsewhere could still find a sympathetic ear and an open chequebook among Singaporean banks.

Relic of the past

It’s a bad look and frankly it does not seem like particularly smart business. In key markets around the world, the price of solar and wind energy has already dipped below that of coal. Coal power is already a relic of the past, squeezed out by tightening climate regulations and renewable energy, which continues to decline in cost and improve in technology with every passing month.

No wonder then that as far back as 2015, global investment in renewables was already double that of coal.

There’s no shortage of studies demonstrating that Singapore’s neighbours can power their growth with clean renewable energy and Vietnam in particular is rapidly scaling up. Back in July, Singapore’s Sunseap began construction of the country’s largest solar plant in Vietnam’s Ninh Thuan province.

In October 2015, Asean countries made a collective commitment to increase renewable energy by 2025 to 23 per cent of the region’s energy mix. To achieve this goal, the region needs to invest US$27 billion annually.

But as things stand, Singaporean banks are doing little to meet that target. In fact, over the past five years DBS, OCBC, and UOB loaned nearly eight times as much to coal than renewable energy in Asean.

Given our understanding of the science of climate change, coupled with the investment opportunities in clean energy, this situation has to change. Standard Chartered has raised the bar for all banks active in South-east Asia. Are DBS, OCBC and UOB up to the challenge?

Bioenergy

Indonesia says looking at converting old oil refineries into biofuel plants

16 October 2018

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Indonesia

NUSA DUA, Indonesia (Reuters) – Indonesia is looking into converting two of the country’s older crude oil refineries into plants for producing biofuels, a cabinet minister said on Tuesday.

The government is conducting a study with Italian energy company ENI, which has successfully converted one of its refineries to the production of biofuels, Rini Soemarno, the minister overseeing state-controlled companies, told reporters on the sidelines of the IMF-World Bank annual meetings in Bali.

The move is part of a drive to reduce energy imports as the government tries to narrow the country’s current account gap amid emerging market volatility that has dragged the rupiah currency to its weakest in over 20 years.

ENI is conducting a study on state energy company Pertamina’s [PERTM.UL] Plaju and Dumai refineries, which were built around the 1930s, according to Soemarno.

“We have been planning to modernize those refineries, but we found out that they could be turned (into biofuel plants) – most likely these two will be converted,” Soemarno said.

According to Pertamina’s website, the Plaju plant has an oil refining capacity of 133,700 barrels per day (bpd), with Dumai at 170,000 bpd.

Indonesia’s biodiesel drive also aims to absorb the country’s rising crude palm oil output amid sluggish global demand. Indonesia is the world’s top producer of the commodity.

Starting in September, Indonesia enforced a mandatory use of B20 fuel, which has 20 percent bio-content mix, for all diesel machines in the country, including train locomotives and heavy equipment.

Government officials have estimated the nation could save billion of dollars in energy imports per year through the B20 program.

Renewables

First Philippine floating solar farm launched

16 October 2018

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Philippines

Floating solar farms are more technically efficient than ground-mounted projects because the cooling effect of the surrounding water on the panels makes the panels produce more energy. As an archipelago with bodies of water, the Philippines has a huge potential for floating solar farms.

According to a recent report, a 10 kilowatt-peak (kWp) floating solar farm was commissioned on Laguna Lake within Baras, Rizal province. This intended to supply the town with clean and free energy.

The project is the first floating solar farm in the Philippines, thereby opening the possibility of using energy from the sun beyond the traditional ground-based and rooftop-mounted systems.

The sustainable energy firm that launched it aims to show the technical feasibility of floating solar technology in the country.

The technology involves deploying solar photovoltaic panels on the surface of a body of water. The technology has been deployed in many other countries, such as Japan, China and the United States.

The 10kWP project is designed to last for 25 years. A connecting station was also built, allowing residents to use the power generated for charging gadgets, powering sound systems, and lighting up the river.

One of the advantages of floating solar farms over ground-mounted solar facilities is that no farm or forest lands are used. No trees are required to be cut.

Moreover, floating solar farms also mitigate water evaporation and the proliferation of algae in the lake, and may help aquatic and marine life to flourish.

The project also has the potential to improve the community and boost local tourism and economy.

Floating solar farms are more technically efficient than ground-mounted projects because the cooling effect of the surrounding water on the panels makes the panels produce more energy.

The pilot project would provide free renewable energy to the municipality of Baras. The solar farm is equipped with a battery storage system that ensures a sustainable power flow.

The pilot also forms part and paves the way for the development of a much larger and commercially-viable project, also being executed by the sustainable energy firm.

As an archipelago with inland and offshore bodies of water, the Philippines has a huge potential for floating solar farms.

This technology could also make use of lakes created by abandoned open-pit mining by deploying solar panels on top of it.

Prior to the commissioning of the solar farm, a tripartite memorandum of agreement was signed by the company, together with the town and the Laguna Lake Development Authority (LLDA), on 14 August 2018 for the pilot project.

The mission of the Laguna Lake Development Authority is to manage, develop and transform the Laguna de Bay Region into a vibrant economic zone through conservation of lake basin resources and good governance with the participation of empowered and responsible stakeholders.

In 1993, through Executive Order 149, the administrative supervision over the Agency was transferred from the Office of the President to the Department of Environment and Natural Resources (DENR).

Oil & Gas

INFOGRAPHIC: Natural gas and the Philippines’ rising power demands

16 October 2018

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Philippines

MANILA, Philippines – As consumption rates continue to rise and the government’s massive infrastructure program gets underway, one thing is clear: the Philippines’ demand for power will be higher than ever.

Can our existing energy mix sustain this growth? Based on latest figures, up to 50% of our energy comes from coal-fired power plants.

At first look, coal is the reasonable option because it is believed to be cheap and stable. However, increasing dependence on coal isn’t good for the environment or for our health. Recently, it hasn’t been good for our pockets, either, as coal prices and electricity rates have increased significantly

There is another major energy source that is cleaner, affordable, and reliable—natural gas. Based on latest figures from the Department of Energy, It already makes up 30% of Luzon’s existing energy mix, providing more than 2,000 MW’s of capacity to the Luzon grid.

Check out the infographic below to learn more about why natural gas can help address our rising power demands.

Illustration by Alyssa Arizabal/Rappler – Rappler.com

Coal

Challenges in Coal Supply for Thermal Power Production

16 October 2018

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Vietnam

As thermal power accounts for the largest proportion of Vietnam’s energy production, the country is facing challenges to ensure sufficient supply of coal for thermal power plants in the coming years.

According to President of the Vietnam Association of Thermal Science and Technology Truong Duy Nghia, coal-fired thermal power has dominated the country’s energy market, particularly in southern provinces. It is largely due to the fact that hydropower, also popular in Vietnam, requires spaces for reservoirs and large evacuation for facility construction in spite of its low prices, environmental friendliness and short building time. Meanwhile, most of natural resources for the development of hydropower plants have been almost used up, he noted.

Renewable energies like wind power, solar power or biomass are environmentally friendly but generation of these types of electricity has remained low, equivalent to only one fifth or one sixth of the thermal power production while they heavily depend on natural resources and weather conditions, making their prices relatively high.

Gas-fired thermal power faces similar issues in terms of cost as the operation and maintenance costs for a facility are very expensive, almost doubling those of the coal-fired thermal power while gas supply is limited.

According to the Ministry of Industry and Trade (MoIT), by 2020, Vietnam is expected to produce about 26,000 MW of coal-fired thermal power, accounting for 49.3 percent of the total electricity generation and consuming about 63 million tonnes of coal. By 2030, the production of coal-fired thermal electricity will increase to 55,300 MW of power, representing 53.2 percent of the total generation and consuming 129 million tonnes of coal.

It was estimated that to provide sufficient supply of fuel for coal-fired power plants, Vietnam will have to import about 90 million tonnes of coal a year after 2030, which puts the country under great pressure.

Since 2016, Vietnam has started importing coal which was input for Duyen Hai 3 Thermal Power Plant. In 2017, imports of coal totalled 4.5 million tonnes and it is likely to rise to about 24 million tonnes by 2020.

Le Van Luc, deputy head of the MoIT’s Electricity and Renewable Energy Authority, said if demand for coal keeps increasing, the ministry will propose the government to adopt a special mechanism for thermal power producers to sign long-term contracts for coal imports and allow them to hold ownership of coal mines abroad to stabilise the coal supply for electricity production.

He further noted that the ministry is drafting a plan for national power development for 2020 – 2030 with a post-2030 vision, which will also take the supply of coal for power generation into consideration.

IFC’s Komodo green bond raises $134m for climate investments

16 October 2018

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Indonesia

International Finance Corporation (IFC), a member of the World Bank Group, has issued its inaugural Indonesian rupiah Komodo green bond, attracting strong investor demand and raising Rp 2 trillion (US$134 million) to combat climate change.

“The issuance of IFC’s green Komodo bond underscores our commitment to support Indonesia in achieving environmentally sustainable economic growth,” said Nena Stoiljkovic, IFC’s vice president for Asia and the Pacific.

“The bond allows us to mobilize international funding into Indonesia’s climate-friendly projects and we intend to replicate and scale up this model to address the country’s climate challenges.”

This is the first such green Komodo offshore rupiah-denominated issuance by a multilateral development bank for investment into climate projects in Indonesia.

The five-year green bond, which will be listed on both the London Stock Exchange and the Singapore Stock Exchange, will support the local-currency market in Indonesia, funding the first-ever green bond issued in Indonesia by an IFC client, Bank OCBC NISP. The proceeds will finance underlying infrastructure and climate-related projects.

Jingdong Hua, IFC’s vice president and treasurer, said the first ever green Komodo bond issued in rupiah for climate investment in Indonesia was a significant milestone for IFC and for Indonesia to help the private sector manage foreign exchange risk through local-currency financing.

Since launching the Green Bond Program, IFC has raised billions of dollars for clean energy, climate-smart cities, green buildings and green finance. As revealed in IFC’s Green Bond Impact Report released on Monday, IFC issued 32 green bonds totaling $1.8 billion in the fiscal year that ended June 30.

News Clipping

RAPID refinery completion will free MYR15-20 billion/year capex Oil price rebound allows Petronas to start new investment cycle Petronas spends MYR30 billion/year just to maintain reserves.

NEW UPSTREAM INVESTMENT CYCLE

Floating solar farms are more technically efficient than ground-mounted projects because the cooling effect of the surrounding water on the panels makes the panels produce more energy. As an archipelago with bodies of water, the Philippines has a huge potential for floating solar farms.

As thermal power accounts for the largest proportion of Vietnam’s energy production, the country is facing challenges to ensure sufficient supply of coal for thermal power plants in the coming years.

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