Energy Absolute Public Company has brought online the 260MW Hanuman wind farm cluster in Thailand.
The development comprises five sub-projects and features Siemens Gamesa G126-2.5MW hardware.
Finnish engineering consultancy Poyry provided owner’s engineering services during installation and commissioning of Hanuman.
Poyry’s work included reviewing and inspecting the turbine supplier’s site management plans, progress reports and commissioning and testing reports.
It also monitored installation and commissioning and reported to the owner, attending system walk downs to identify punch list items, as well as re-inspections after remedial actions by the turbine supplier.
Electricity from the wind farm will be sold to the Electricity Generating Authority of Thailand under a power purchase agreement.
Poyry business director, wind power said: “As one of the biggest wind power projects in south-east Asia, the Hanuman project sets an example to south-east Asian nations on how to substantially increase the domestic renewable energy production in order to cut greenhouse gas emissions, to diversify national energy production portfolio, and to reduce long term operating cost of the power system.”
BANGKOK, April 30 (Reuters) – Thailand’s cabinet on Tuesday approved a national energy plan that looks to add 56 gigawatts (GW) of power by 2037, a senior official said.
The Power Development Plan 2018-2037 (PDP2018), which maps out the long-term energy needs and capacity of the country, expects Thailand to add 56,431 megawatts of new capacity by 2037 to reach a total capacity of 77,211 megawatts, Nathporn Chatusripitak, government spokesperson told reporters.
Thailand currently has a power generation capacity of 40,000 megawatts, with 20,000 megawatts to go offline over time, he said.
By 2037, 53 percent of total capacity would be from natural gas, 20 percent from renewable sources, 12 percent from coal and the remainder from other sources including imports, Nattaporn said.
The previous plan from 2015 estimated natural gas would make up 40 percent of total Thai energy by 2036 and coal up to 25 percent.
Electricity generation is not a task that can be carried out overnight, and the government needs to approve all the budgets the Ministry of Electricity and Energy has demanded, said Deputy Minister Dr Tun Naing.
The deputy minister’s remark came after the question of a member of parliament at a parliamentary session of the Lower House held in Nay Pyi Taw on April 29.
MP Nay Myo Htet for Kyauktada Township Constituency questioned how many megawatts were used in March and April in 2019 and whether there was any measure to ensure that there is no power cut in summer.
“It is also necessary to all the amounts of budget our ministry has demanded. Electricity cannot be generated overnight,” said Dr Tun Naing.
He said that it took about seven or eight years to build a power station, adding that Myanmar’s electricity demand would be met only after efforts of 5 or 10 years for power generation.
“It is not true there is no power cut in other countries. Even in Singapore, it took days to bring back power after power cut. In one case in the United States, there were about two weeks of power cut. In our country, we can make efforts to bring back electricity in hours after it went out,” the deputy minister commented.
As dam water deceases now, electricity is being provided on a quota basis this summer, he added.
The Maritime Industry Authority (Marina) and the Department of Energy (DOE) are promoting more sustainable and eco-friendly fuels for Philippine-registered ships to implement the global 0.50% sulphur cap in 2020.
Guided by the International Convention for the Prevention of Pollution from Ships (MARPOL Convention) of the International Maritime Organization (IMO), the Marina and DOE discussed the specifications of the global 0.50% sulphur cap with petroleum industry stakeholders, oil importers, and shipping industry partners.
The state agencies are also threshing out concerns to prepare for possible challenges that may emerge due to the new regulation.
Annex VI of the MARPOL Convention, which the Philippines has ratified in 2018, requires all ships in non-emission control area (ECA) zones to set limit on the sulfur content of fuels from 3.50% to 0.50% by January 1, 2020.
To date, the Philippines is a state party to all annexes of the MARPOL Convention.
Marina – Shipyards Regulation Service (SRS) Director Engr. Ramon Hernandez acknowledged stakeholder concerns such as the need for existing Philippine-registered vessels to undergo retrofitting to be able to utilize sustainable and eco-friendly fuels.
The Marina and DOE assured the stakeholders that they will formulate a comprehensive plan for the implementation of the global 0.50% sulphur cap in 2020 by identifying other alternative sources of eco-friendly and affordable fuels, among others.
Next month, the MARINA and DOE will meet with the Department of Finance (DOF), the National Economic and Development Authority (NEDA), and the Department of Environment and Natural Resources (DENR) to ensure that the Philippines will be able to comply with the Annex VI of the MARPOL Convention.
THE favorable arbitration ruling on the $1.1-billion tax case between the Malampaya consortium and the Commission on Audit (COA) would entice investors to pursue exploration activities in the country.
“The Department of Energy welcomes this latest development in the International Chamber of Commerce [ICC] arbitration case. We have always upheld the position that the tax regime for petroleum service contracts is legal and valid. This victory would go a long way in giving exploration and development activities in the country a much needed and long overdue boost as investors will now have renewed confidence in our upstream gas industry,” Energy Secretary Alfonso G. Cusi said in a text message on Monday.
The DOE has been urging investors to “explore, explore, explore” to help the country build its power supply. He said last year, the country was grossly trailing behind its neighbors in terms of petroleum exploration and development activities.
“It is high time we step up. We need to attain energy security and sustainability to minimize our vulnerability to global oil price shocks,” Cusi said during the launch of a new round of energy-contracting exploration program.
The ICC decided in favor of the Malampaya consortium, with a unanimous vote of 3-0. The ICC is a global organization that provides services to resolve disputes in international business, with headquarters in Paris, France. Service Contract 38, which governs the Malampaya project, provides for dispute resolution under the arbitration rules of the ICC.
The Senate Committee on Energy, the proponent of the Drill Drill Drill program, said there is no longer a legal impediment for investors to undertake oil and natural gas exploration now that the arbitration court in Singapore has finally resolved the tax case between Shell Philippines Exploration BV (SPEX) and the government.
“The multi-billion tax case has been a big specter that discouraged foreign players from conducting petroleum explorations in the Philippines over the past several years and drove away investments in high risk, capital-intensive, and technology-intensive sectors. With the case now behind us, it is high time for the government to aggressively pursue a ‘Drill, Drill, Drill’ program, so that we can tap these oil and gas resources and use them to achieve Philippine energy independence and pave the way for the country to become an energy exporting powerhouse,” Sen. Sherwin Gatchalian said.
The Petroleum Association of the Philippines (PAP) also said the ruling will revive the oil and gas exploration industry.
“I hope the government will react positively. This, of course, will be of great help to the exploration industry,” PAP chairman Rufino Bomasang said.
Shell Philippines Exploration B.V. (SPEX), which leads the Malampaya consortium, and the DOE, will meet soon.
“The Malampaya joint venture can confirm that the ICC arbitration tribunal has issued its decision, which we are currently reviewing with our legal counsels. At this stage, we cannot provide details due to the confidentiality of the proceedings, but the joint venture will be engaging the Department of Energy in due course,” Spex said.
Other members of the consortium are Chevron Malampaya LLC, with a 45-percent stake and state-owned PNOC Exploration Corp. with the remaining 10 percent.
The case stemmed from a COA ruling that overruled the petition of the Malampaya consortium that income tax was already imputed in the government’s 60-percent share in the Malampaya royalties. The tax, it argued, was deductible from the government’s share of the Malampaya earnings.
The COA, in its April 6, 2015 decision, upheld its findings that the income taxes of the service contractors could not be assumed by the national government in its 60 percent share in the Malampaya proceeds and thus ordered the consortium to pay the national government P53,140,304,739.86 in taxes.
It stressed that is no provision in the law stating that the income tax of the contractors forms part of the share of the government.
On a per year basis, COA said the under collection amounted to P2,409,817,191.46 in 2003; P2,335,402,961.38 in 2004; P2,832,586,038.93 in 2005; P7,901,265,361.42 in 2006; P11,272,523,434.55 in 2007; P15,826,563,356.86 in 2008; and P10,562,146,395.26 in 2009.
In September 2015, SPEX filed an arbitration case against the National Government with the Singapore International Arbitration Center. In July 2016, SPEX filed another arbitration case in the International Centre for the Settlement of Investment Disputes Arbitration (ICSID) in Washington against the National Government regarding its tax dispute.
AC Energy, Inc. expects to break ground early next year on several wind projects in Vietnam with its three existing partners in the regional neighbor in time for the feed-in tariff deadline in November 2021, its top official said.
“It could be as big as 250-300 megawatts (MW), it could be as small as 30 MW. That’s a big range,” Eric T. Francia, president and chief executive officer of Ayala Corp.’s energy company, told reporters in an informal gathering in Vietnam during the weekend to celebrate the completion of a solar project.
“We have over 250-MW, expandable to 350 MW with AMI,” he said, referring to Vietnamese partner AMI Renewables Energy Joint Stock Co.
In 2017, AC Energy formed a platform company with AMI Renewables to build renewable energy plants in Vietnam, including a 352-MW wind project in Vietnam’s Quang Binh province.
“We could also potentially do solar in there, so puwede kaming mag-hybrid (we could go hybrid), but we haven’t really finalized that yet,” Mr. Francia said.
The platform company became AC Energy’s second in Vietnam after it partnered with BIM Group of Vietnam to develop 330 MW of solar power in the country.
In November last year, AC Energy announced its international unit had invested in Singapore-based renewable energy company The Blue Circle Pte. Ltd. through a 25% ownership acquisition as well as co-investment rights in the latter’s projects.
AC Energy and The Blue Circle are to jointly develop, construct, own and operate the latter’s pipeline of around 1,500 MW of wind projects across Southeast Asia, including about 700 MW in Vietnam. Its partner developed and constructed one of the first wind farms in Vietnam.
The company announced back then that the partnership plans to develop around 100 to 200 MW of wind energy projects out of The Blue Circle’s project pipeline in Vietnam.
“We really focused on solar because of the tighter deadline, it’s June 2019. Now we did 410 MW between BIM and AMI — 330 [MW] with BIM [and] 80 [MW] with AMI,” Mr. Francia said, referring to the solar projects AC Energy completed with its Vietnamese partners with a feed-in tariff rate of 9.35 US cents.
“We don’t own all of that 410 [MW],” he said, adding that about half of that capacity is attributable to AC Energy.
“Now the focus shifts to wind because the deadline now is 2021. It takes about a year, a year-and-a-half to build a wind farm, so we have until early 2020 to start construction. Between now and early 2020, basically in the next 12 months, we really need to get the projects to shovel-ready stage,” he said.
Mr. Francia had said that he was seeing a potential 1,000 MW of wind projects attributable to AC Energy in Vietnam. He earlier said that the company was in talks with BIM to partner with the latter’s 300-MW wind project.
He declined to identify which of the wind projects would be completed first.
“We don’t know yet which of the 1,000 MW we’re gonna do. That’s just the potential based on the pipeline that we see. It really depends on getting the permits, getting the financing,” he said. “We have two years.”
Mr. Francia said the feed-in tariff used to be 7.80 US cents for wind, but was adjusted a few months ago to 8.50 US cents to encourage more investments. He said the “meaningful adjustment” in the tariff, which guarantees a fixed electricity rate and a regular revenue stream, made wind projects viable in Vietnam.
“Definitely, we’re very bullish with Vietnam. That’s gonna be one of our major international markets,” he said.
Cambodia has been gripped by daily blackouts in recent weeks, leaving many parts of the capital Phnom Penh without power for most of the day. As temperatures spike during the region’s hot season, heated questions are rising about why the government can’t seem to keep the lights on.
Prime Minister Hun Sen has blamed the blackouts on a severe drought that has stifled the operations of hydropower dams, which supply about half of the country’s electricity needs.
Last month the Ministry of Environment advised farmers not to plant their next rice crop because of the drought, causing some to resort to eating lotus roots to survive, according to local reports.
But the economic impact of the blackouts will be most acutely felt in the national capital, home to the country’s most profitable industries. There is not yet any concrete official estimate on the rising costs of the daily power cuts on the economy.
Kimlong Chheng, director of the Center for Governance, Innovation and Democracy at the Asian Vision Institute, a local think-tank, says that economist costs “depends on the frequency and duration of power cuts.”
“It is hard to say exactly without having hard evidence. Possibly, an estimated 40-50% of factories have been affected, but only about 20 to 30% of their production processes might have been damaged,” he estimates.
An electricity utility worker checks power lines in Phnom Penh. Photo: Twitter
Ou Virak, president of the Future Forum, another local think tank, reckons that the effect on the economy could “be in the tens of millions of dollars.” He adds, however, that a business sector friend estimates the blackouts could cost the economy hundreds of millions of dollars if they last until June.
In mid-March, the government estimated that 400 megawatts of energy were needed to make up for the shortfall caused by depleted hydropower dams, or roughly one-sixth of all the electricity Cambodia consumed last year.
So far only a quarter of this power gap has been purchased from neighboring Laos and Thailand. Vietnam, meanwhile, has declined to sell Cambodia any more power because it, too, is facing energy reductions in its southern provinces.
On April 2, the government agreed to terms on a three year lease of a vessel from Turkey that can generate 200 megawatts of energy, but it is not yet known when the floating facility will be operational.
The hardship, depending on how long it lasts, could have implications for stability. Electricity generator vendors have dramatically raised prices in recent weeks, sparking a heated response on social media.
Government spokesman Phay Siphan has asked people to “keep faithful behavior toward[s] each other with a culture of solidarity for Cambodian people, especially when it comes to hard times with electricity shortages.”
But clearly not everyone is pulling together, exposing the already severe divide between rich and poor.
The commanding towers of the capital’s only licensed casino, NagaWorld, which saw more money pass through its VIP rooms last year than the nation’s entire gross domestic product (GDP), are glaringly illuminated day and night.
Phnom Penh’s poorest neighborhoods, including those on the city’s hard-scrabble outskirts, are being hit the hardest by the power cuts, with some areas apparently receiving electricity for only a couple of hours per day.
A Phnom Penh apartment building in a file photo. Photo: Facebook
Such a dire situation was somewhat foreseeable. In 2015, Cambodia experienced its worst drought in 50 years, while one in 2012 affected half of the country’s provinces.
A report by the United Nations in 2015 predicted Cambodia would be the world’s ninth-most vulnerable country for natural disasters, including droughts and floods, as well as other effects of climate change.
That means the current electricity shortage might become a regular occurrence without more forward-thinking investment and planning.
Cambodia’s electricity needs are growing rapidly, in line with a fast accelerating economy that has seen average GDP growth of 7% in recent years. The country consumed roughly 2,650 megawatts of electricity last year, up 15% from 2017, according to government data.
About 20% of this energy came from imports from Thailand, Vietnam and Laos last year, down from imports of about 60% in 2010. The remainder came from coal-fired plants (660 megawatts), other fossil-fuel burning stations (271 megawatts), renewable sources (163 megawatts) and the remainder from hydropower, officials from the Ministry of Mines and Energy told local media.
The Electricity Authority of Cambodia, a state utility, reckons that about 72% of all households now have electricity and that percentage is expected to rise this year, which will see projected electricity needs grow to 2,870 megawatts by the end of 2019.
According to a report published on April 1 by Fitch Solution, a macroeconomic research firm, Cambodia’s net power consumption will grow at an annual average of 6.1% between now and 2028, largely “driven by an expanding industrial and manufacturing sector, particularly for textiles.”
Cambodias Lower Sesan II hydropower dam. Photo: Facebook
The government reckons that hydropower projects can be expanded so that they produce around 2,000 megawatts by 2020 – up from 1,329 megawatts last year – and eventually 10,000 megawatts at some point in non-specified future.
The Fitch Solutions report, however, argues that supply projection is likely too optimistic and that only 1,380 megawatts will be available from hydropower dams next year.
“Project delays have been frequent and general environmental and social opposition from the region could curb future growth in the sector,” it stated, referring to frequent land rights protests by people who are relocated to make way for the dams.
Moreover, the firm revised down its estimates for this year’s hydropower generation, noting that while the drought is the main cause of the problems, it is “compounded by the country’s strong power demand that have exceeded government estimates.”
Shortages, meanwhile, are compounding costs for the state. It is not yet known how much the electricity shortages will cost the wider economy, but the losses will inevitably impact on tax revenues and thus the government’s future spending power.
More costly, however, are the state’s emergency outlays to cover shortfalls. Energy produced from the vessel leased from Turkey, for example, will cost US$0.03 more per kilowatt per hour than power produced by local hydropower plants, according to local media reports.
The cost of the lease agreement has not yet been announced, although the Cambodian government says it will subsidize the additional energy prices for consumers. But pass-through effects are inevitable.
Workers in a Cambodian garment factory. Photo: Facebook
Inflation was expected to hit around 2.6% this year, according to the National Bank of Cambodia, but that estimate will no doubt rise with more costly power.
Last month, the state-owned Electricite Du Cambodge agreed to purchase 200 megawatts of energy from the Electricite Du Laos over the next three years, although the price Cambodia will pay similarly has not been publicly disclosed.
Apart from the extra cost to national coffers, “the worst is the impact [the shortages] will have on potential investments,” says Ou Virak, of the Future Forum think-tank.
“That’s much more difficult to know. My bet is potential investors will now incorporate the blackouts and lack of predictability into their costs and risks considerations” when making investment decisions, he adds.
Cambodia already has some of the highest electricity rates in Southeast Asia, which private businesses say makes industry, especially those in the electricity-dependent manufacturing sector, less competitive.
High electricity costs are also affecting Cambodia’s ambitions to move up from low-cost, low-skilled manufacturing to higher-skilled technology assembly.
The government clearly understands the costs and problems incurred by expensive and unreliable power. In December, Hun Sen responded to rising concerns by announcing that electricity rates would be cut in 2019.
Cambodian Prime Minister Hun Sen speaks during a ground breaking ceremony in Phnom Penh on January 14, 2019. Photo: AFP/Ly Lay
“The reduction of electricity rates will make people happy. They will welcome the effort to lower electricity rates . . . even if the rates for the water and the prices of other goods are the same,” Hun Sen said at the time.
In March, the leader announced plans to cut electricity prices from $0.17 to $0.02 per kilowatt per hour for most industries – and even lower for vitally important economic sectors like garment manufacturing.
Such cost savings would no doubt be widely welcomed by private businesses, but such vows will be more pie-in-the-sky than reality as long as Hun Sen’s government struggles to even keep the power on.
Amid electricity cuts, parched hydropower dams and millions of dollars of blackout-related economic losses, a bright spot could be emerging on Cambodia’s energy front.
After nearly two decades of false starts, Cambodia has announced it will begin to extract oil for the first time later this year, representing a potential rich new source of energy and revenue.
Extraction is expected to begin by the end of this year from the so-called “Apsara” oil field, situated in a 5,000 square kilometer area of the Gulf of Thailand known as Block A.
Cambodia’s extraction plans have been hobbled for years due to a maritime territorial dispute with neighboring Thailand but Block A is safely within Cambodia’s solely claimed area.
The area contains an estimated 30 million barrels of oil, according to the Ministry of Economy and Finance. Currently, Cambodia is a net fuel-importing nation.
US energy giant Chevron, which took a controlling stake in Block A in 2012, had earlier estimated it held 700 million barrels of oil but that figure has since been revised down substantially.
Source: KrisEnergy
Two years later, Chevron backed out of the venture, selling its stake to Singapore’s KrisEnergy for US$65 million, roughly a third of what the US company had spent on exploration in the area over the years.
KrisEnergy first entered the joint venture in 2010. The fact that one of the world’s most experienced energy companies abandoned the field at a loss led many analysts to assume that it was commercially unviable.
Chevron’s decision coincided with a slump in global oil prices: the price of a single barrel of oil dropped from around $115 in 2014 to just $35 in 2016.
In 2017, KrisEnergy signed an agreement with the Cambodian government over the oil field’s ownership. The Singaporean firm holds a 95% stake in the contract area while the government maintains a 5% share.
The company predicts the oil field will produce somewhere near 8,000 barrels per day of crude, with the first oil expected to be produced in October this year and transported by barge. It says 27 wells have been drilled in Block 1A, 13 of which have reportedly struck oil and gas.
In Phases 1B and 1C, which haven’t yet been assigned start dates, nine more extraction platforms are expected to be built in the maritime area.
The Ministry of Economy estimates that Block A has about 30 million barrels of oil and that complete extraction of the fuel could take as long as nine years.
KrisEnergy Chief Operating Officer Kelvin Tang (L) shakes hands with Cambodia’s Minister of Mines and Energy Suy Sem during a signing ceremony in Phnom Penh, August 23, 2017. Photo: AFP/Tang Chhin Sothy
So far there are few reliable estimates on how much the enterprise would be worth to Cambodia. A previous sticking point with Chevron involved revenue-sharing, with the government requesting as much as 70%-80% during negotiations.
The revenue-sharing arrangement with KrisEnergy isn’t immediately clear.
Much, of course, depends on whether the global price of petroleum stabilizes near its $65 per barrel historical moving average after recent years of wild up-and-down fluctuations.
A recent report by Oxfam and the Cambodian For Resources Revenue Transparency, a nongovernmental organization, estimates that the first six-year phase could earn the government between $90-$120 million.
If the government’s estimate of roughly 30 million barrels of oil holds, and if the fuel is also sold at today’s prices of around $65 per barrel, then the extraction could be worth as much as $1.9 billion.
Ancillary benefits could be derived from foreign investment in the fledgling sector. The Ministry of Mines and Energy stated last year that foreign direct investment (FDI) in extractive industries, including oil exploration as well as mining, was worth $1.3 billion last year.
“Future opening up of the resources sector offer huge potential for investors. The infrastructure sector is in the need of investments as well. The local refinery production facilities are not able to handle large-scale exploitation operations,” reads a recent Asean Briefing by Dezan Shira & Associates, an Asian consultancy firm.
In February the Ministry of Mines and Energy announced that a Canadian firm, Angkor Gold, is also diversifying into oil and gas, and has applied for exploration permits.
A KrisEnergy platform type that will be used at Block A in the Gulf of Thailand. Photo: KrisEnergy/Facebook
The company has not publicly disclosed where it aims to explore; its website says the company is negotiating with the government for permits to as much as 7,000 square kilometers, with a particular interest in the Kampong Som basin, an area southwest of Phnom Penh where thermal conditions indicate a possibility of oil or dry gas.
The company is also reportedly the only company exploring any of Cambodia’s 19 onshore blocks.
In March, a report by the Indonesian news agency Antara said that “Indonesian companies and [state enterprises] need to explore minerals [in Cambodia], as there is still a lot of space, for instance, in gold and oil which has not been well-explored there.”
Initially, it was thought that Block A’s extracted oil would first be sold only in the Cambodian market, according to past statements by Cheap Sour, director-general of the General Department of Petroleum at the Ministry of Mines and Energy.
However the ministry now says, at least in the initial phases of extraction, that the crude oil will be exported because Cambodia lacks the infrastructure to process and refine the raw fuel.
To be sure, crude oil exports will bring in needed revenue for the government, though some already caution a sudden surge in foreign currency dominated capital inflows could also ramp up inflation if mismanaged.
Inflation is “manageable” at the moment, according to a National Bank of Cambodia statement in January, and is projected to grow about 2.6% this year, though the price of food is set to increase at a higher rate.
A fuel vendor prepares to fill a motorbike with petrol along a street in Phnom Penh in a file photo. Photo: AFP/Tang Chhin Sothy
If Cambodia can move to quickly develop the necessary infrastructure so that processing can be done domestically – meaning some of the produced oil enters the local market – it could boost the economy on various fronts and potentially alleviate future power crises.
That would potentially include money saved on the high amount currently spent on subsidizing the local petroleum market as well as on fuel imports.
In March 2016, a cross-ministerial directive established a mechanism for limiting the price domestic petroleum distributors are allowed to charge customers. This price is updated every ten days and gas stations can be fined if they flout the rules.
When global oil prices rose in early 2018, the government spent $83 million to stabilize domestic fuel prices for consumers in the first five months of the year, Sim Vireak, a strategic adviser to the Asian Vision Institute, a local think tank, recently noted.
To soften the blow for petroleum distributors and to forestall another rise in gas prices, last June the government drastically cut tax rates, costing the state about $30 million in revenue.
An electricity utility worker checks power lines in Phnom Penh. Photo: Twitter
While the sums aren’t vast, the steep rise in the price of oil and gas over the last four months has no doubt added to the government’s financial burden, notably at a time of politically challenging rolling electricity blackouts.
But the promise of domestically produced oil, including reductions in how much Cambodia imports and potentially lower fuel costs, would be a boon to domestic distributors and narrow the need for expensive state subsidies.
Yet all of this “depends on the price of oil and the cost of extraction. If it costs too much, and the price is too low, extraction does not make sense,” says Sophal Ear, associate professor of diplomacy and world affairs at Occidental College at Los Angeles.
