LOPEZ-led Energy Development Corp. (EDC) said last week it would carry out “a small expansion” of its geothermal assets.
“We have a few plants lined up for EDC. They are small, less than 30 megawatts [MW],” said EDC President Richard Tantoco when asked what renewable-energy (RE) projects are in store for EDC this year.
Tantoco said these small expansion projects involve EDC’s geothermal plants at Leyte, Bacon-Manito (BacMan) and Mount Apo.
“Just a couple in the pipeline and we are likely to issue notice to proceed on one of them within the next six months—geothermal, brownfield and within the existing assets for expansions,” he added.
EDC’s geothermal-plant portfolio is composed of the following: 140-megawatt Bac-Man, 588.4-MW Unified Leyte, 123-MW Tongonan, 172.5-MW Palinpinon, 49.4-MW Nasulo and 106-MW Mindanao plant.
This year, the company expects normal geothermal plant operations after the full restoration of the Leyte plants. It has also invested in various resiliency programs to better mitigate the company’s vulnerability to natural calamities and quickly recover from their effects.
EDC’s Leyte plants were hit by two calamities in 2017—a 6.5-magnitude earthquake in July and Typhoon Urduja in December.
EDC is a subsidiary of the First Gen Corp., the country’s largest clean-energy company, with a portfolio that includes natural gas, geothermal, solar, wind and hydro.
The company also continues to explore and assess growth opportunities in Indonesia, Chile, Peru and other countries in the Asia Pacific and Latin America regions. It owns a number of geothermal concessions in these areas, and various predevelopment works are ongoing.
Renewable energy may be one of the government’s new top sources of investment, but industry players have complained it is difficult to develop clean power projects in the Philippines largely due to bureaucratic red tape.
Renewable Energy Association of the Philippines President Erel B. Narida lamented the procedure for getting a project approved is just too tight. He cited, for one, putting up utility farms, which requires over 250 signatures from energy and environment officials, as well as from local government executives and stakeholders.
“Under the regulatory process, it is really by the numbers, so you have to follow all of that. If you are building a utility farm, some of the developers say you need about 250 signatures in order for that to be on the ground. If one official did not sign today, you cannot finish it in a year,” Narida told reporters on the sidelines of a business forum last week.
“The regulations are just too tight because [the government wants] to protect the consumers. Little by little though, the regulatory process is changing,” he added.
In spite of the restrictive procedure, Narida urged renewable energy investors to just adhere to the entire process, as it will only create complications if they do otherwise. “Any investment who would like to come here, we always advise them: follow the process. It would take time, but you are more secured doing that,” Narida said.
Further, Martin Henkelmann, executive director of the German-Philippine Chamber of Commerce and Industry, said another problem developers face is the difficulty of getting the necessary technologies here.
“Some of the machines needed for the projects, they are quite complicated. There arise issues on the side of installing them, but also sometimes in getting the equipment. It is quite a typical issue. We probably would have to look at each project and see where the problems arise, where the obstacles arise,” Henkelmann said in an interview with reporters.
“The thing is it is not importing a normal [unit]. They are very tailor made, made very specific. There is a criteria, there is energy involved, electricity involved, so a lot of things have to be standardized and tested,” he added.
Last week seven German power firms in a business forum presented their portfolio to an audience of local firms in search for investment partners. Most of them are engaged om renewable and efficient energy systems, of which many are providers of solar power technologies.
The investment climate for renewable energy is favorable for the German delegation, as the government has been approving power projects left and right.
Power projects made up nearly two thirds of investments approved by the Board of Investments from January to April. BOI approvals of energy projects after the first four months of the year stood at P185.4 billion, which is 64.66 percent of the investment body’s total for the period.
The study from analytics firm GlobalData predicts a a compound annual growth rate (CAGR) of 22.4 per cent for currently untapped non-hydropower renewables in the country, which it attributes to a change in government policies.
The report highlights that, with Vietnam’s coal reserves depleting, the government is looking to expand the energy mix away from fossil fuels.
Power industry analyst Anchal Agarwal said: “In Vietnam, market development of renewable sources such as wind and solar is in nascent stage. Hydropower potential is nearly exploited; in contrast, wind, and solar expansion potentials are high and to a great extent untapped.
Against this backdrop, Agarwal said Vietnam has revised power development plan and set priorities for developing renewables such as wind, solar, and biomass.
Projections are to increase the percentage of renewable energy power to 7 per cent by 2020 and 10 per cent by 2030.
As of 2018, hydropower dominated the Vietnam power mix, with a share of 40.2 per cent of the total installed capacity, followed by coal and gas 38.9 and 15.9 shares respectively.
Non-hydro renewables accounted just 2.1 per cent, of which 1.3 was biopower, followed by wind and solar with 0.5 and 0.3 per cent respectively.
GlobalData says hydropower’s share of the total installed capacity will fall to 23 per cent in 2030: however, it is expected to be replenished by an increase in non-hydro renewables, with wind and solar the frontrunners.
But Agarwal warns that there are several challenges currently facing Vietnam’s power sector – the biggest of which is how the country mobilizes the huge investment of around $8bn that is needed to meet power demand.
“Low electricity prices, limited funding, slow pace of major power projects and lack of private sector interest, including that of foreign investors, are some of the other challenges facing by Vietnam’s power sector.”However, Agarwal adds that “in spite of certain roadblocks, investment is happening in the country’s renewable power sector. Vietnam is trying to reduce its dependence on fossil fuels for electricity generation and more emphasis is given to the development of solar, wind and other renewable resources.”
Vietnam is just one of several countries in the Asia-Pacific that is adopting strategies and roadmaps to bring more renewables into its energy mix.
It highlights how India, Kazakhstan, Indonesia, Pakistan and Taiwan have all implemented auctions to drive their renewable energy markets.
Power analyst Piyali Das said: “Auctions are the major mechanism in APAC driving the renewable energy sources in most of the key countries, with India being the most prominent in implementing auction plans to award 80 GW of solar and 28 GW of wind projects between 2018 and 2020.”
GlobalData also stresses that feed in tariffs (FiTs) play a role in enhancing the renewable energy market in APAC. In countries such as Australia and India, FiTs to renewable projects is a provincial or state subject. Pakistan is providing FiTs in renewable sources such as solar, wind and small hydro from 2015, and Taiwan offers a FiT for renewable systems and is subject to annual revision.
Piyali added: “The regulatory framework and policy structure supporting renewable energy resources in various APAC countries has led to significant development in the renewable energy market. China, India, Japan are some of the leading nations in renewable energy growth trajectories. In the wake of growing energy security and environmental concerns, most APAC countries are expected to strengthen their renewable energy mechanisms, which will help the Asia Pacific renewable energy industry to maintain growth in the coming years.”
KUALA LUMPUR: Argentina is seeking joint venture and cooperation with Malaysia in the field of renewable energy and the peaceful use of nuclear energy, said Vice President Gabriela Michetti (pix).
She said Argentina saw great potential in renewable energy, such as wind and solar power, and has made large investments in the sector in the past.
“The important aspect is that Argentina is now focusing a lot on our renewables. We have made large investments in this sector. However, some of these investments were lost due to bad policies of the previous government,“ she said.
She said this to Bernama International News Service in an exclusive interview.
The Vice President was in Kuala Lumpur for a five-day official visit since May 2 (Thursday).
This is the first official visit from the Argentinian side in 22 years since the visits by former President Carlos Menem in 1990 and 1997. The Argentinian embassy was opened in Kuala Lumpur in 1983 while Malaysia opened its embassy in Buenos Aires in 1989.
The World Energy Council lists Argentina as presently possessing more than a dozen wind parks, located in six different provinces, with an aggregate installed capacity of 29.76 MW.
It has been estimated that Patagonia’s wind potential, south of the 42nd Parallel, represents more energy than those contained in the whole of Argentina’s annual crude oil production. Patagonia is a region on the southernmost tip of South America, shared by Argentina and Chile.
Argentina is also experienced in the peaceful use of nuclear energy, Michetti said, considering that the country’s first commercial use of nuclear power began over 45 years ago in 1974, and that the South American country has exported nuclear reactors to the Netherlands, Australia and many other countries.
Currently, it has three nuclear power plants that generate five per cent of the country’s electricity.
Michetti added that Argentina, through its National Institute of Applied Research (Instituto Nacional de Investigacion Aplicada, INVAP) provides the expertise for the energy sector, especially in nuclear energy.
INVAP, established in 1976, specialises in the research and construction of nuclear reactors, radio-isotopes, and other nuclear-related projects. It has built nuclear reactors in Argentina, Algeria, Australia, Egypt and Peru.
Michetti said the private sector, local and foreign investors have realised that Argentina, at present under the government of President Mauricio Macri, had implemented security, transparency and corporate responsibility in tender processes for businesses.
After Macri assumed the presidency on Dec 10, 2015, he had initiated a series of reforms including the promotion of renewable energy and transparency in the bidding of contracts.
“Responsibility in the biddings, no corruption, so that everyone knows nothing is hidden. These companies see this as an Argentinian compromise to be honest and transparent. So, investors can trust. Therefore, companies have started to come in,“ she said.
Meanwhile, Michetti said Argentina and Malaysia could also explore collaboration in agro-based industries, especially considering the former’s technological advancement in the sector.
“It is not only traditional agricultural production that we are looking at. We can supply the commodities, you can then reprocess and manufacture and even re-export them, and it will be a win-win situation for both countries”, she said.
Michetti added: “It’s not only the corn or the maize, but it’s also the bio-genetics and bio-technologies that can be applied to its production”.
The Vice-President said, concerning the agro-based industry, that Malaysia and Argentina can work on the segment of animal feed as the former requires an increase in supply and the latter is established in the (animal feed) activity.
“I think there are a lot of things we can do together because we have the same vision. I think this is an ideal moment to strengthen the relationship. We need to start today to build our future”, she said. — Bernama
Norwegian firm Scatec Solar has grid-connected a 65MW solar plant in the south-west of Peninsular Malaysia, its second PV project in the Southeast Asian nation.
The Jasin plant is the first of three Scatec projects of the same size being developed in Malaysia. The new plant is expected to provide about 94GWh of electricity per year, providing energy for more than 31,000 households.
“We are pleased to have reached commercial operation for the Jasin solar plant, doubling our assets in operation to 130MW in Malaysia. Southeast Asia continues to be a key market for us, and we expect that the Government of Malaysia will maintain high ambitions for the deployment of renewable energy in the country,” said Raymond Carlsen, CEO of Scatec Solar.
Scatec entered the Malaysian large-scale solar energy market in December 2016, by joining forces with a local ITRAMAS-led consortium that had signed three 21-year power purchase agreements (PPAs) with major utility, Tenaga Nasional Berhad (TNB). The partnership covers realisation of three solar plants totalling 197MW with a total investment of about MYR1,235 million (US$293 million).
Scatec Solar also recently detailed to PV Tech its plans to set up solar-plus-storage systems in emergency zones for humanitarian aid workers, starting with a pilot in South Sudan.
Back in February, the Energy Commission of Malaysia released its third LSS solar auction round, with a tender for 500MWac of grid-connected large-scale solar projects to be developed on Peninsular Malaysia.
Investment Coordinating Board chairman Thomas Lembong points to Indonesia’s “scariest macro-economic graphic,” showing an energy trade balance where oil and gas production keeps falling, fuel imports keep rising – and the country which was once the world’s largest exporter of liquified natural gas (LNG) becomes a net importer by 2020-21.
“I can’t begin to tell you how dramatic the implications from that will be on the trade balance, the balance of payments and ultimately our exchange rate,” Lembong told foreign journalists last week in Jakarta. “We have three years to fix the problem, or we will be in a world of hurt.”
His surprisingly candid appraisal came in response to unconfirmed reports that Royal Dutch Shell is close to selling its 35% stake in eastern Indonesia’s giant Masela gas field. If true, it would be a potential serious blow for President Joko Widodo, who was elected to a second term last month partly on an economic nationalism ticket.
While Shell would likely be replaced in the project by a regional investor with deep pockets and access to cheap financing, the giant energy company’s withdrawal would send another wrong signal to oil majors that, as prospective as Indonesia may be, it is not worth the politics and regulatory hassle when other opportunities abound.
Quoting industry and banking sources, the Reuters news agency is so far the only media outlet to have run a story on Shell’s potential withdrawal. Sources close to Shell told Asia Times they are convinced the report is untrue and that it is still “ full steam ahead” on the project.
Oil and gas regulator SKKMigas claims to have received a statement from Shell denying the report, but in explaining the Anglo-Dutch company’s silence to the Reuters report, one executive told Asia Times it never comments on commercial matters “until they are full and final.”
A map depicting the Masela gas field. Image: Inpex Corp
Shell and Japanese majority partner Inpex Corp were both taken aback by the government’s decision in 2017 to change the Masela project from a floating LNG platform to an onshore processing plant in the remote Tanimbar islands, aimed solely at the domestic market and to boost economic development in the Maluku region.
As a global player, Shell always appeared less flexible than Inpex, which has already spent millions of dollars on the project. Shell’s original interest in the project rested largely on the fact that it is the first petroleum giant to develop a floating LNG facility, in this case a 600,000-ton platform off the coast of Western Australia.
So-called “FLNG technology” allows LNG to be off-loaded at sea onto purpose-built carriers for direct shipment to world markets. But Indonesia’s new nationalist policy under Widodo appears to exclude fuel exports altogether.
The Reuters report suggested Shell wants to raise $1 billion from the sale of its share in Masela to help pay for its $53 billion purchase of British energy giant BG Group, an acquisition that made Shell the world’s second largest energy company.
The company pulled its Masela-specific staff out of Jakarta early last year in a sign of declining interest, but majority partner Inpex would be expected to do much of the planning work anyway, based on an agreed 20-year extension to its current production sharing contract which expires in 2028.
Construction of the 9.4 million ton processing facility is expected to begin on the main Tanimbar island of Yamdena in 2021-22. But the so-called Plan of Development (POD) faces one big obstacle in particular — a $4 billion gap in the project’s pricing.
Indonesian President Joko Widodo (C) arrives for a press conference after the country’s presidential and legislative elections on April 17, 2019. Photo: AFP/Goh Chai Hin
The government is insisting on $15 billion, while Inpex and Shell have been holding out for $19 billion, the same estimate given by a New York-based consulting firm Poten & Partners three years ago when the Widodo administration was considering the onshore option.
It has long been understood that a 180-kilometer pipeline between Masela’s Abadi gas field and Yamdena would be a major added cost because it has to traverse a 2,000-3,000 meter-deep trench, part of the Indian Ocean fault line that skirts Sumatra, Java and the Nusa Tenggara island chain.
Abadi has a proven 12.7 trillion cubic feet of gas, with possible and probable reserves elevating it to more than 40 trillion cubic feet, three times larger than BP’s Tangguh operation in West Papua where a third $8 billion production train is under construction
The Tangguh facility will supply about 75% of its output to domestic customers, but it is understood that while the construction of the offshore platforms are on schedule, there are delays to the onshore plant that may push the completion date out beyond next year.
Tangguh is now Indonesia’s biggest producing gas field ahead of East Kalimantan’s Mahakam block, where output has dropped alarmingly to an annual 700 million cubic feet a day, 300 million below target, since Pertamina took over the field from French giant Total in 2017.
SSKMigas chairman Dwi Soetjipto has blamed the decline in production on a lack of investment in drilling wells, with only 30 dug out of a 2019 target of 118, 10 of which have still not started to produce. Three other Pertamina subsidiaries have failed to meet their drilling targets as well, according to industry sources.
Source: JODI Data/Report Linker
In his presentation, Lembong referred to that same production fall-off, then expressed concern that the same thing could happen to Sumatra’s Rokan block, the country’s biggest producing oilfield, when state-run Pertamina takes over from US energy giant Chevron in 2021 – as well as to other expiring blocks that will fall under state control over the next few years.
Mahakam and Rokan are both mature fields, tracing their histories back to the 1970s. Each presents their own unique and costly challenges, with Rokan depending on the tricky technique of steam-driven enhanced recovery to maintain production at about 200,000 barrels a day.
Little wonder that SKKMigas officials are already predicting the country will fall short of this year’s 750,000 barrels of oil a day target, with some blocks declining faster than expected. Ironically, they are looking to ExxonMobil’s Cepu block in East Java to ensure production doesn’t slide any further.
One recent industry analysis estimated Indonesia will need to invest more than $150 billion in exploration, gas distribution infrastructure and refinery capacity to slow production decline and meet growing demand from the country’s 270 million-strong population.
Without new investment, Indonesia could see its oil and gas production fall by another 20% before 2024, yet only two potential foreign investors showed any interest in this year’s first auction of five oil and gas blocks and even then they failed to meet all the tendering requirements.
An Indonesian worker fills up a truck with fuel at a state energy giant Pertamina filling center in Jakarta, August 27, 2014. Photo: AFP/Adek Berry
Now that last month’s election is “in the bag,” Lembong says he has full trust in Widodo to do the right thing, which he hopes will mean slowing down nationalist policies and “swinging the pendulum back to a more pragmatic, realistic and honest” appraisal of its national capabilities in the energy sector.
“The reality is we need technologically advanced and competent partners in the energy sector,” he said. “The report of Shell’s potential exit is another disconcerting milestone and should be seen as a wakeup call as to whether our energy policy, as such, is working.”
Lembong, a former trade minister and investment banker known to have Widodo’s ear on economic issues, says the growing energy trade imbalance in the next 5-10 years will weigh on the trade and current account deficits and impact on Indonesia’s overall industrial and commercial competitiveness.
It’s not clear whether he will be in Widodo’s new Cabinet when it is announced in October, but the current line-up is expected to undergo a limited reshuffle in June, apparently to discard three or four ministers currently under a corruption cloud and others who have won seats in the legislative election on April 17.
The investment chief’s comments appeared to be an early warning to Widodo that continuing on the same nationalist course, which he inherited from predecessor Susilo Bambang Yudhoyono and was directed at boosting his populist credentials ahead of the elections, could be potentially disastrous for a country already staring at declining production and a loss of investor confidence.
Royal Dutch Shell Plc. shelved a plan to venture into renewable energy projects in the Philippines and decided to focus on energy efficiency measures and off-grid projects. “It was challenging because first of all, there is a nationality requirement being an RE company. And we noticed when we are doing our market scouting, the market is already quite crowded with regards to RE opportunities in solar panels,” Shell Companies in the Philippines country chairman Cesar Romero said. “So what we do in that space is we concentrate on energy efficiency measures within, rather than creating a new business out of it,” Romero said. SCIP includes Pilipinas Shell Petroleum Corp., which owns a 110,000-barrel-per-day refinery, and Shell Philippines Exploration B.V., the operator of the Malampaya gas project in northwest Palawan. Shell was initially planning to set up a renewable energy company in partnership with local partners, but Romero said the group would rather build “hybrid” projects in remote areas and install solar panels for its own use. Romero said the group was now looking at five far-flung sites for various modes of “hybrid” power projects. “We have five sites under various hybrid modes. And our priority are the difficult-to-reach areas. Communities that are not in the five-year masterplan of the government, those are the ones we choose to help, [and those in] close proximity to our operations,” Romero said.
Romero said Shell was also focusing on energy efficiency projects to reduce the carbon footprint of local operations. He said SCIP had 33 sites with solar facilities, on top of its investments in energy solutions. “When we did our study, we noticed there’s still a lot to be accomplished internally first before we start marketing these products. Our refinery as well, we are considering how we can deploy again solar for own use. This is under evaluation. Those kinds of energy solutions from within first. There’s a lot of opportunities to do RE within the family first,” he said. Romero earlier said the company was in the ‘”scouting phase” for a renewable energy project in the Philippines. “But globally, we have declared that as a global priority for us,” Romero said. Shell’s business in the Philippines is focused on oil and gas exploration and downstream oil industry. Shell has been operating in the Philippines for more than 100 years.
Hanoi: India and Vietnam agreed to further strengthen cooperation in defence and security, peaceful uses of atomic energy and outer space, oil and gas and renewable energy as Vice President M Venkaiah Naidu Sunday concluded his four-day visit to the Southeast Asian country. During his visit, Vice President Naidu held talks with his Vietnamese counterpart Dang Thi Ngoc Thinh, Prime Minister Nguyen Xuan Phuc and Chairperson of the National Assembly Nguyen Thi Kim Ngan.
“Vice President’s talks with his Vietnamese interlocutors were extensive and productive and covered whole range of bilateral and multilateral cooperation,” said a statement issued by the Ministry of External Affairs.
Both sides agreed to further strengthen cooperation in defence and security, peaceful uses of atomic energy and outer space, oil and gas, renewable energy, agriculture and innovation-based sectors, it said.
Vietnam is an important trade partner of India and their bilateral trade stood at nearly USD 14 billion last year having nearly doubled from USD 7.8 billion three years ago.
Vice President Naidu and Prime Minister Phuc expressed commitment to enhancing trade and investments and agreed to facilitate direct air connectivity to promote tourism, trade and people-to-people relations.
Both sides reiterated the importance of building a peaceful and prosperous Indo-Pacific region on the basis of respect for national sovereignty and international law, and expressed full commitment to an open, transparent, inclusive and rules-based regional architecture based on freedom of navigation and overflight, unimpeded economic activities and peaceful settlement of disputes in accordance with international law, the statement said.
Vietnam’s leaders appreciated India’s long-standing development partnership engagement, especially scholarships and training programmes. They also thanked India for extending concessional Lines of Credit for defence industry cooperation and implementing other socio-cultural infrastructure projects in Vietnam under Indian grants-in-aid.
Naidu also invited Vice President Thinh to undertake a visit to India.
“Vice President Naidu’s visit has imparted momentum to the bilateral relationship and provided an opportunity to review various areas of collaboration and cooperation of the Comprehensive Strategic Partnership, with Vietnam’s leadership,” the statement said.
Naidu also delivered a keynote address at the 16th UN Day of Vesak at the Tam Chuc Pagoda in Hanam Province in Vietnam.
Vesak, also known as Buddha Jayanti, is traditionally observed by Buddhists as ‘Buddha’s Birthday’.
He also paid respects at the Monument of National Heroes and Martyrs and at the Ho Chi Minh Mausoleum at Hanoi.
