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Cambodia reaffirms commitment to United Nations Framework Convention on Climate Change

16 December 2018

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Cambodia

Cambodia has reaffirmed its commitment to the United Nations Framework Convention on Climate Change and express serious concern over the multi-faceted impacts of climate change.

Eang Sophalleth, secretary of state with the Ministry of Environment and head of the Cambodian delegation to the UNFCCC, said this week in Poland that after the historic agreement in Paris, the need for decisive and ambitious action on climate change has never been stronger.

He noted the recent Intergovernmental Panel on Climate Change pointed out serious
consequences if the objective to maintain global warming below 1.5°C is not delivered. Therefore, significant work has been done this year to develop mechanisms for the implementation of the Paris Agreement.

“The current policy platform to take stock of the efforts to develop Cambodia is the Rectangular Strategy Phase IV, in which sustainability and climate change action are one of the major pillars,” he said.

“With this regard, Cambodia has made progress in promoting renewable energy, particularly through solar farms,” he added. “We are also making progress in the establishment of protected areas and biodiversity corridors, which currently cover 41 percent of the total country land area.”

Electricity/Power Grid ,
Others ,
Renewables

Aboitiz Power to build $28 million battery storage

16 December 2018

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Philippines

MANILA, Philippines — SN Aboitiz Power Group (SNAP), the joint venture of SN Power of Norway and Aboitiz Power Corp., plans to construct a $28-million battery energy storage system (BESS) at its Magat hydro electric power plant (HEPP).

The facility will be used to boost the company’s ancillary services and standby power supply that can be tapped in case the regular supply falls short of the requirement.

In a statement, SNAP said its board approved to conduct a feasibility study in 2019 for BESS in Magat.

Construction will start in 2020 with commercial operations expected by 2022 once the National Grid Corp. of the Philippines (NGCP) approves the facility’s ancillary services procurement agreement (ASPA).

Ancilliary services (AS) are necessary to support the transmission of capacity and energy from resources to loads while maintaining reliable operation of the transmission system in accordance with good utility practice and the grid code.

AS is a system requirement to ensure grid system reliability, security and affordability of the supply.

“You can think of battery energy storage as a giant power bank,” SNAP president and CEO Joseph Yu said. “With BESS, we will have a battery facility that is connected to the grid where we can withdraw power from when necessary.”

The Energy Regulatory Commission classified BESS as a new source of frequency control ancillary services.

The company has included BESS in its scope because of the rise of variable renewable energy in the country, increasing frequency variability to the grid which requires more balancing power supply in the system.

SNAP has been providing the NGCP with AS from its impounding hydropower plants.

It owns and operates the 360-MW to 380-MW Magat hydro on the border of Isabela and Ifugao, the 8.5-MW Maris hydro in Isabela, the 105-MW Ambuklao hydro in Benguet and the 140-MW Binga hydro also in Benguet.

Electricity/Power Grid ,
Energy Cooperation

Laos, Thailand further cooperation, deepen friendship

15 December 2018

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Lao PDR ,
Thailand

Laos and Thailand will target new heights in deepening their relations as they head toward setting up a strategic partnership for growth and sustainable development.

The direction of deepening relations and enhancement of bilateral cooperation was agreed on at the Third Lao-Thai Joint Cabinet Retreat (JCR) held in Vientiane yesterday co-chaired by Prime Minister Thongloun Sisoulith and his Thai counterpart General Prayut Chan-o-cha.

After a two-hour meeting, the two prime ministers witnessed the signing of seven documents; namely the record of the JCR, memorandums of understanding (MOUs) on cooperation in the justice and legal sector, in transport, education, natural resources and environment, immigration management, and a MOU on power trade between Electricite du Laos and Electricity Generating Authority of Thailand.

In the natural resources and environment sector, the two sides have agreed on setting up a botanic garden in Naxon village, Pakngum district, Vientiane.

After the signing ceremony, Prime Minister Thongloun and Prime Minister Prayut together held a news briefing where the Lao prime minister conveyed that the JRC was held under the atmosphere of brotherhood and he hoped the meeting would lead to the implementation of various agreements which would bring development to both nations along with mutual visits that protect their friendly ties.

As mentioned by Mr Thongloun, the sides appreciated the implementation of various agreements which they said had brought productive results.

Regarding the persistent deepening relations between both nations, the Lao PM said “Our two countries will move forward together to bring prosperity to people’s lives”.

At the retreat meeting, the two sides reviewed achievements of past bilateral cooperation in various fields.

The two sides praised the Joint Border Committee for their work in addressing border issues and the progress made in surveying as related units from both sides enhanced their efforts to finish the survey and marker installation for the land border by 2020 and water border by 2021.

The two sides confirmed to continue the promotion of economic, trade and investment cooperation in electric power and other sectors that have the potential for more growth to benefit both sides and strengthen the building of the Asean Community.

The two sides agreed on targeting the doubling of trade volume by 2021 compared to that of 2016.

Prime Minister Thongloun, representing the Lao government and people, expressed gratitude to His Majesty the Thai King and royalty, the royal government and Thai people for their assistance to Lao people, especially following the collapse of the Xepian-Xenamnoy Hydropower project saddle dam in Attapeu province’s Sanamxay district.

“Thailand was among the foreign countries which offered timely assistance for the rescue and relief from the disaster and helped to reduce the losses,” he said.

During the visit of the high-level Thai delegation to Laos, Gen Prayut Chan-o-cha represented the Thai government and people in handing over additional grants valued at 75 million baht or around 19.5 billion kip for the restoration of livelihoods in Attapeu province.

The Thai government and people also presented 55 million baht or around 14.6 billion kip for the development of the Lao Physical Education College in Thongpong village, Vientiane.

At the briefing, Mr Thongloun conveyed Laos’ full support for and cooperation with Thailand in its rotating chairmanship of Asean next year, and the country’s full confidence in Thailand’s chairmanship in deepening the building of the Asean Community.

Laos and Thailand also agreed on activities to be organised to mark the 70th anniversary of the establishment of diplomatic relations between the two countries in 2020.

Speaking at the briefing, Thai Prime Minister Gen Prayut Chan-o-cha stressed the deepening relations between the two nations heading toward setting up the strategic partnership.

He noted the future cooperation in security, combating drug and human trafficking, as well as infrastructure development for facilitating mutual visits between people of the two nations and decreasing travelling time.

After the meeting, the Lao and Thai prime ministers joined the opening of an exhibition at the National Convention Centre in Vientiane to mark 50 years of Lao-Thai Energy relations under the theme “From the first transmission line to the secured presence and future”.

Renewables

Solar Energy Firm Reports Achieving Project Milestone

15 December 2018

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Philippines

UGE International Ltd. (UGE:TSX.V; UGEIF:OTC) announced in a news release it recently “achieved substantial completion” of projects in each of its three key markets: the U.S., Canada and the Philippines.

“When 2018 is complete, we will have installed our largest-ever annual volume of solar projects, taking our cumulative total over 380 megawatts,” Chief Operating Officer Ed Steins said in the release.

In Canada, UGE finished the first two sites of the 15-site Peterborough project, and should wrap up two more next week.

In the U.S., the company finished two of three rooftop installations in Massachusetts and the last of a four-part portfolio in Minnesota.

Finally, in the Philippines, UGE completed its largest project to date there, a 1.4 megawatt system for Nature’s Spring Mineral Water in Bulacan, last week. The solar solutions company also finished a rooftop system for Toys by Robin last month.

An upcoming catalyst for UGE, expected in Q1/19, is its completing the Peterborough contract. Also next year, the company will commence work on additional projects in the pipeline in the Philippines and the U.S.

Energy Efficiency

Making the region’s buildings energy efficient

15 December 2018

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ASEAN

Member states of the Association of Southeast Asian Nations (ASEAN) intend to reduce regional energy intensity 20 percent by 2020 and 30 percent by 2025 compared with 2005 levels. According to the ASEAN Centre for Energy (ACE), the region is on track to reach its goals as energy intensity levels have seen a downward trajectory between 1995 and 2014.

Nevertheless, future projections like these still require concentrated efforts to ensure they are realised. A key enabler towards reaching this goal is to improve energy efficiency. Energy efficiency is an important factor towards ensuring environmental and economic challenges are met in a rapid and cost-effective manner.

Improving energy efficiency of buildings

Buildings are an important piece of the energy efficiency puzzle. According to the United Nations Environment Program (UNEP), buildings are responsible for upwards of 30 percent of global greenhouse gas (GHG) emissions. Moreover, more than 50 percent of the planet’s new buildings are constructed in Asia yearly and the building sector constitutes an estimated 25 percent of overall energy consumption.

Earlier this year, it was reported that Southeast Asia was faced with a “cooling crisis” as more people are cranking up their inefficient air-conditioning systems. This has had a negative knock-on effect on the environment as the electricity used to power these systems are provided by coal-fired power stations.

While it’s true that one could just switch off the air-conditioner, the region’s hot and humid weather would make that an unpopular decision in most office buildings. The solution, however then lies in ensuring that electric devices run efficiently on as little electricity as possible. In this case, ensuring the air conditioner is installed with an energy saving inverter which reduces power consumption.

Source: Various sources

This is just one of many ways, buildings can be made to be more energy efficient.

According to recommendations by the International Energy Agency (IEA), buildings in this region should comply with building energy codes and minimum energy performance standards (MEPS). They should also aim for net-zero energy consumption and strive to improve the energy efficiency of building envelopes, systems, and critical building components.

The most effective way of improving energy efficiency in buildings is to engage with energy service companies (ESCOs) which provide a broad range of energy solutions. These services include designing and implementation of energy savings projects, retrofitting, energy conservation, energy infrastructure outsourcing, power generation and energy supply, and risk management. ESCOs have been adopted widely especially in more developed ASEAN states like Singapore, Malaysia, Thailand and Indonesia and is fast becoming a popular financing vehicle across ASEAN.

Financing energy efficient buildings

One thing to keep in mind is that any effort to improve energy efficiency in buildings will incur additional costs. The advantage is building owners or tenants save more money in the longer term, thanks to the energy saved.

Installing energy efficiency systems opens up bountiful opportunities for investment. According to a report by the United Nations (UN) and Singaporean financial service provider, DBS, residential and commercial building sectors are estimated to have investment opportunities of US$88 billion and US$64 billion, respectively. The returns on such projects are incredibly attractive – at times exceeding 20 percent.

While energy efficiency projects can be financed completely by private financiers, the government can also play a role. For example, in Malaysia, the Energy Performance Contracting Fund helps finance projects with a target financing size of no higher than US$3.8 million and a tenure of no longer than seven years.

There is also potential for green bonds as a means of finance. City Developments Limited (CDL), a Singapore based property developer issued the island republic’s first ever green bond – a two-year secured bond worth US$74 million at a 1.98 percent coupon due in 2019 for the retrofit of an office building. The retrofitting included an upgraded chiller plant, energy efficient lights and motion sensors to reduce energy waste.

Given Southeast Asia’s rapid pace of infrastructure development, energy efficiency is undoubtedly an important aspect to consider when constructing buildings. Ultimately, it boils down to ensuring environment-friendly development which, at the same time, doesn’t disrupt our comfort.

Coal

Calls to cool down on coal

14 December 2018

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ASEAN

While delegates from 200 countries come together to ramp up climate action and investors worldwide call for an end to banking on coal as part of the energy mix, the Trump administration followed through with its threat to host a fossil-fuel promotional side event at the United Nations Climate Summit (COP24), currently held in the Polish coal capital of Katowice.

Amidst protests and jeering from climate campaigners, only Poland and Australia were represented at the event intended to “showcase ways to use fossil fuels as cleanly and efficiently as possible”. Poland’s commitment to coal is solid, with 80 percent of its electricity generated by coal. The country’s coal reserves are projected to last for another 200 years. Australia, the fourth biggest coal producer after China, India and the United States (US), has coal contributing 31.5 percent to its energy mix.

According to Dan Lashof, Director of the World Resources Institute in the US, contrary to what the side event professed, the Trump administration is not interested in making fossil fuel powered energy clean. So far, the administration has proposed a roll back of measures to cut methane leaks from oil and gas operations, making it easier for companies to dump coal ash into drinking water. It has also proposed easing carbon pollution rules for new coal-fired power plants.

“It’s ludicrous for Trump officials to claim that they want to clean up fossil fuels, while dismantling standards that would do just that. The Environmental Protection Agency’s (EPA) own analysis found that Trump’s proposed replacement for the Clean Power Plan is so lax that it could cause up to 1,400 deaths per year. This sideshow in Poland would be laughable if the consequences of climate change weren’t so deadly serious,” said Lashof.

According to the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on Global Warming of 1.5 degrees Celsius (SR15), for atmospheric temperature increase to remain below 1.5 degrees Celsius and in order to avoid the worst of climate impacts, the share of coal in global electricity generation in 2050 needs to be reduced to practically zero or zero to two percent of the existing level.

Source: Various sources.

Closer to home

While the rest of the world is busy phasing out coal powered energy in favour of greener, less carbon-intensive options, Southeast Asia is ramping up its coal plan, preparing for the fossil fuel to contribute 40 percent of the energy growth demand by 2040. While the numbers on the forecast report for economic growth look good, it comes at the expense of the region’s people. Many of whom together with those from neighbouring regions, are regarded as being most vulnerable to climate change impacts.

Indonesia snagged the top five seats on the ranking of the biggest coal producers in 2016, 80 percent of which is slotted for export. While it targets an ambitious 29 percent emission reduction, the country also plans to build 100 coal-fired power plants, while at the same time expanding palm oil production, most probably, at the expense of its forested areas. Indonesia produced 6.3 percent or 460 million tons (Mt) of the world’s coal in 2016. At COP24 in Katowice, Indonesia is one of the top five countries with the biggest number of delegates at 191.

Two other Southeast Asian countries, Malaysia and Thailand are in the top 10 biggest net importers of coal, together absorbing more than four percent of exported coal globally at

53 million tons.

Clean criteria for dirtiest fuel

While coal’s proponents often wave the term ‘clean coal’ about to support their continued consumption, its exact definition is hard to pin down. The ASEAN Clean Coal Technology (CCT) Handbook for Power Plants by the ASEAN Centre for Energy (ACE) stresses the implementation of CCT to curb the release of carbon dioxide (CO2), sulphur dioxide (SO2) and nitrogen oxide (NO) into the atmosphere.

However, in reality, CCT implementation in the region is extremely rare as pollution control, high efficiency low emission (HELE) and carbon capture and storage (CCS) technologies as utilised in supercritical (SC) and ultrasupercritical (USC) coal power plants is extremely expensive. Malaysia’s Manjung 4 and Manjung 5 USC power plants developed at a cost of approximately US$1.4 billion each remain ASEAN’s only completed USC coal power plants to date.

As a region, we are struggling to survive the shocks and slow-onset of a world that is one degree Celsius warmer. Can we really handle an increase of three to four degrees? At this point, Southeast Asia simply cannot afford the technologies needed to make coal clean. At the same time, we also cannot afford the cost of climate change as well as the loss of life that will accompany the continued use of coal.

Oil & Gas

Myanmar plans to sell natural gas produced from PTTEP block mainly for local use

14 December 2018

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Myanmar

Myanmar is planning to sell natural gas produced from PTTEP offshore block (MD-7) mainly for local use, sources said.

The PTTEP, cooperating with Myanmar Oil and Gas Enterprise (MOGE), held a public talk to discuss and explain about environmental impact assessment (EIA) test with locals from Myeik on December 13.

They met with locals in Dawei, Kawthoung and Myeik which are the nearest towns with the offshore block to conduct public poll about the project.

“It is the first public meeting to know about their concerns and the impacts on the environment. We will write down the issues on the report. We will explain about the EIA process at the second meeting. We will explain about the issues related with socio-economy, natural resources, environment and sea creatures to locals. We made the assessment instructed by the authorities. The regional government and union ministry have an agreement with the national grip. It will be implemented after 2019. The natural gas produced in the future will be sold mainly for domestic use and the remaining gas will export if domestic use is sufficient,” said Assistant Director Saw Thandar from Offshore Oil and Natural Gas Department.

PTTEP is an international petroleum exploration and production public company based in Thailand and it is planning to export oil and natural gas to Thailand sustainably.

“Although the projects to explore oil and natural gas are carried out here, the locals have no entitlement. We are using the electricity expansively. We don’t know whether the government is asking our opinion or we are following their orders,” said Kyaw Naing from 88 Generations activist from Myeik district.

The MD-7 is located about 640 kilometers from Yangon, 390 kilometers from Dawei, 300 kilometers from Myeik and 230 kilometers from Kawthoung and it is located in the offshore fishing blocks.

Oil & Gas

Thailand’s PTTEP boosts gas production, reserves with contract wins

14 December 2018

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Thailand

Singapore — Thailand’s energy ministry has awarded the renewed production sharing contracts for two major gas fields to PTT Exploration and Production Public Co Ltd, boosting the state-run oil company’s gas production and reserves profile at a time when the country’s output has been flagging.

PTTEP’s auction wins for the Erawan and Bongkot natural gas fields in the Gulf of Thailand underscore how national oil companies are securing greater control over petroleum reserves in Asia, and the shrinking presence of oil majors in the region.

It also raises several questions about the tougher fiscal terms under which the new contracts are being awarded and whether the renewals of petroleum concessions in coming years will be done at similar terms with a higher share for the government.

On Thursday, the energy ministry announced that PTTEP won the bids for the expiring G1/61 (Erawan) and G2/61 (Bongkot) gas field concessions, overcoming a rival bid by Chevron’s Thailand subsidiary for Erawan and a joint bid by Chevron and Mitsui for Bongkot.

PTTEP made a joint bid for the Erawan field with Mubadala Petroleum’s Thailand subsidiary in a 60%-40% partnership, and an individual bid for the Bongkot field. The Erawan field is currently operated by Chevron and PTTEP is the operator of the Bongkot field.

The Bongkot and Erawan gas fields are considered vital to Thailand’s energy supply and their combined gas production accounts for 60% of total domestic output, PTTEP said.

“Our proposed development and investment plans will enable us to produce natural gas at the required production levels of at least 700 MMSCFD and 800 MMSCFD from the Bongkot and Erawan fields, respectively, during the PSC regime,” chief executive Phongsthorn Thavisin said.

He said PTTEP has an investment plan for Erawan when it takes over in 2022, and immediate field development plans for Bongkot, where it is already an operator, to ensure continuity in gas supply.

Being an operator in both fields will help save costs in the Gulf of Thailand and bring economies of scale by combining activities like procurement and logistics, he added.

OIL MAJOR EXITS

The auction result highlights the continued departure of oil majors from key petroleum acreage in Southeast Asia.

“This is the second major loss for Chevron in Southeast Asia after losing its Rokan asset to Pertamina in Indonesia earlier this year. Chevron’s reserves and production in the region is now expected to fall drastically post-2022, and Southeast Asia could become a non-core region for the major,” Wood Mackenzie analyst Jean-Baptiste Berchoteau said.

He said Chevron’s focus is likely to turn towards the Permian play in the US where it recently increased its budget by 10%, even as it decides the level of capital expenditure for Erawan until the ownership transition to PTTEP in 2022.

Chevron Thailand said in a statement that it was “deeply disappointed that it was not the preferred bidder for the Erawan and Bongkot blocks,” despite bids based on its experience operating in the Gulf of Thailand.

“Our bids allowed for the necessary investment to maximize recovery of Thailand’s resources,” Chevron said, adding that it respected the decision of the government.

CONCESSION RENEWALS

Berchoteau said PTTEP had made an aggressive bid on the gas price and the profit share, and the low gas price constant value of $3.55/mmbtu reflects its competitiveness to meet the government’s need for affordable gas.

However, Thailand’s gas prices are linked to oil and the recent fall in crude oil prices along with a higher profit share for the government have raised some concerns among market participants.

“While we consider the contract award as a positive from a volume/reserve addition perspective, we believe such positives are likely to be overshadowed by concerns around the future profitability of the fields,” Nomura analyst Abhishek Nigam said in a report.

He said a lower future gas price could dent PTTEP’s profitability, and it remains to be seen how it will maintain margins via cost reductions and cost synergies despite a lower gas price for the new contracts.

Additionally, under the new contracts, the government’s share comprising royalties and other components will rise to 68%-70% from 50% earlier. “While this was expected by the market to some extent, it does limit upside to PTTEP under the new contracts,” Nigam added.

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