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Oil & Gas

Singapore’s Pavilion Energy signs long-term LNG charter deal with BW

25 October 2018

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Singapore

SINGAPORE, Oct 22 (Reuters) – Singapore’s Pavilion Energy has signed an agreement with commodities shipper BW Group for the long-term charter of two newly built liquefied natural gas (LNG) vessels, the company said on Monday.

The 173,400 cubic metre vessels, expected to be delivered between 2019 and 2020, will add to Pavilion’s global portfolio and boost its LNG trading expansion, the company said.

The M-type, electronically controlled, gas injection (MEGI) vessels offer environmental benefits through greater efficiency and lower carbon emissions, it added.

“The long-term charters of these MEGI newbuilds … will strengthen Pavilion Energy’s global LNG trading activities, especially on long-haul voyages from Atlantic liquefaction plants to Singapore and Asian markets,” said Frederic Barnaud, group chief executive of Pavilion Energy.

Pavilion Energy was set up in April 2013 by Temasek Holdings , Singapore’s sovereign wealth fund, and is focused on LNG investment.

It formed a joint venture with BW in 2014 called BW Pavilion LNG to acquire, manage and charter maritime LNG assets, including LNG carriers.

Energy Efficiency

New service to help companies cut carbon emissions, generate savings

25 October 2018

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Singapore

SINGAPORE: Singapore companies can now subscribe to a service that will help them cut energy usage and carbon emissions by about 10 per cent, and in turn, generate savings.

The service – called the Co-Pilot Hub – was launched on Monday (Oct 22) and is offered by software and services provider KBC.

The hub is co-funded by Japanese electrical engineering and software firm Yokogawa Electric Corporation and through a grant from the Economic Development Board under the Research Incentive Scheme for Companies (RISC).

Companies can sign up and pay a subscription fee and pay the solutions provider, KBC, a portion of the energy savings that are achieved. KBC declined to disclose how much the subscription fee is.

KBC projects that a refinery, for example, will be able to save up to S$30 million a year through the service.

In essence, the co-pilot programme provides a second pair of expert eyes on the firm’s plant, to provide expertise and assistance through a shared digital twin – or digital copy – of the firm’s complete facility that is uploaded onto a secured cloud platform.

This way, the service provider will be able to monitor the plant and thereafter, analyse plant performance, discover improvement opportunities and formulate a plan that will optimize energy efficiency and in turn, reduce carbon emissions.

KBC’s Asia Energy Lead Andrew Morrison said the service will help energy and chemical companies in Singapore to comply with legislative requirements.

“Over the next three years, we anticipate total benefits for Singapore industries in the range of S$200 million to S$300 million.” he said.

This comes on the back of the Energy Conservation Act which was enhanced in March 2017 to make it mandatory for large industrial emitters to report greenhouse gas emissions from 2021.

The measures will help Singapore achieve its pledge under the Paris Agreement on climate change to reduce emissions intensity by 36 per cent from 2005 levels by 2030.

Currently, the industrial sector accounts for about 60 per cent of Singapore’s greenhouse gas emissions, according to the National Environmental Agency.

Electricity/Power Grid

Air taxis will be tested in Singapore skies next year – here are 5 things to know about the Volocopter

25 October 2018

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Singapore

A man who can fly, a robotic supermarket, and now, flying taxis? We are living in the future.

Volocopter, a German aviation start-up, will be putting its air taxis to test in Singapore in the second half of 2019.

In a statement on Wednesday (Oct 18), Volocopter said that the air taxi trials in Singapore are supported by the Ministry of Transport, Economic Development Board and Civil Aviation Authority of Singapore (CAAS).

CAAS will collaborate with the firm to establish the scope of the test flights and ensure that they meet the necessary requirements.

CAAS director of aviation industry Ho Yuen Sang said that there is potential for air taxis to transform mobility and logistics in urban cities. He added that Volocopter is at the forefront of such new and innovative technology in the aviation industry.

Although these air taxis resemble helicopters, the Volocopter is actually based on drone technology and powered by electricity.

Before it hits the skies next year, here are 5 things we know about the Volocopter air taxi.

1. Distance and weight

Volocopter’s air taxi can fly two people for distances up to 30km.

Apart from ferrying passengers, air taxis are designed for inner city missions and can carry 160kg.

2. No pilot

The Volocopter 2X is operated by a single joystick which controls altitude, balance and landing, according to its website.

Volocopters can be flown fully autonomous with a pilot on a joystick, or remote-controlled from the ground.

Even when the pilot lets go of the joystick, the multicopter will retain its prevailing position.

The machine can even fly completely on its own “in areas which autonomous operations are possible”, the company said.

3. Quiet

The Volocopter 2X has 18 rotors that operate within a narrow frequency band. This means that the rotors sound only twice as loud as one single rotor.

The Volocopter 2X has a total of 18 rotors.

Volocopter

In comparison, a helicopter has main and tail rotors and a turbine, which makes it many times louder than an air taxi.

Volocopter’s website states that the Volocopter 2X, within 75m, sounds equally as loud as the smallest helicopter within seven times the distance.

4. Emergency and safety

There is an emergency parachute on board and numerous support systems for flight control and stabilisation.

Critical components such as propellers, electric motors and battery packs are designed to assure “the highest degree of reliability”, the company said.

It also promised that communication networks are connected via the latest optical fibres.

In Sept 2017, Volocopter performed a public unmanned test flight in Dubai in September 2017. It said that it has been granted a certificate for manned flights since 2016 in Germany.

5. Expansion to Singapore

The company said that to support its expansion plans, it will be setting up a product design and engineering team in Singapore.

It will also partner real estate developers and mobility providers in Singapore to establish infrastructure that can support flight testing.

Electricity/Power Grid

Govt readies additional supply of electricity to meet demand

25 October 2018

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Myanmar

Arrangements have been made to prepare sufficient electricity to meet rising demand next year, according to the Ministry of Electricity and Energy (MOEE).

The rate of increase in electricity consumption typically rises by 15 percent per year on average. This fiscal year though, demand is expected to increase by 19pc. As such, the MOEE is aiming to raise supply to 3700 megawatts during the period, from 3400MW this year.

U Soe Myint, deputy permanent secretary of electricity at the MOEE, warned though, that some projects may still be delayed, depending on the availability of funds. The ministry is expected to spend K578 billion in next year, which includes international aid.

Myanmar generates most of its energy through gas and hydropower plants. As construction of several hydropower projects is still ongoing, additional energy requirements for the fiscal year will be supplied by three gas-fired power plants, said U Khin Maung Win, managing director of the Electric Power Generation Enterprise (EPGE).

These include the 225MW combined-cycle Sembcorp Myingyan gas plant, which commenced operations this month, a second gas plant producing 90MW of energy in Myingyan as well as a 145MW plant in Belin, Kyaukse.

“We have also stored water and repaired gas towers for running existing power plantsto supply electricity for the coming summer,” said U Khin Maung Win.

Meanwhile, construction of transmission lines, substations and distribution lines to transmit the energy generated to the national grid will need to be accelerated.

However, U Khin Maung Win said more delays can be expected at this stage. “If there are financial difficulties or objections from the community in the process of constructing the supporting infrastructure such as power stations, substations and distribution lines, it will lead to delays,” he said.

Whatever the case, state funds have already been allocated for the generation of additional power. “The government wants to complete many hydropower projects and build all the power stations and lines necessary to meet electricity demand. As the MOEE enjoys the second highest priority on the budget, we will be able to expand our power generation capacity,” U Soe Myint said.

States and regions

With help from the state and World Bank, arrangements are being made to supply electricity at various townships and villages in proportionate amounts by utilising state and regional budgets, the MOEE said.

Currently, funds are being allocated towards expanding the national grid to Rakhine, Shan, Sagaing, Magwe and Mandalay. Sub-power stations will also be built across ten major cities, including Pathein,Dawei, Mawlamyine, Taunggyi and Loikaw, which, in turn, will channel electricity to more than 400 villages, in line with the National Electrification Project.

The national grid expansion project will include development of infrastructure in Thilawa as well as the 117-mile 500KV Taungoo-Kamanat transmission line project and 230KV Mawlamyine-Ye-Dawei line.

Meanwhile, upgrades are being carried out at the 118MW Thaton power station and other power stations in Hlawga, Alone, Ywama and Thaketa. The MOEE will also be building of 66KV, 33KV, 11KV, 400 KV lines and sub-stations with the aim of alleviating poverty in poorer states and regions.

Hydro power

Over the longer term, several hydropower projects are expected to come onstream. State funds will be deployed into developing only the smaller hydro power projects, while larger projects will be implemented with international help.

Currently, the Upper Yal Ywar Project, Upper Kyine Taung Project and Thahtay Hydro Project are still under construction and are expected to come onstream within the next 4-5 years, depending on the availability and frequency of funds, said U Khin Maung Win.

He added that the budget for electricity and energy is also under constant pressure as large sums are utilised to subsidise electricity for the country. This fiscal year, the government is expected to incur losses of up to K600 billion to subsidise electricity tariffs, which is up from K480 billion in 2017-18.

“We need to increase electricity prices even as we raise supply to meet demand. We are now awaiting orders from senior officials to do so,” U Khin Maung Win said.

Currently, residential prices in Myanmar are K35 per kilowatt-hour for the first 100 units, K40/kWh for the next 100 units, and K50/kWh for all units after that. With an average tariff of roughly US$0.03/kWh, these are the lowest residential prices in ASEAN, and among the lowest in the world.

Oil & Gas

Philippines Scrambles to Find Undersea Energy as Import Prices Hit Consumers

25 October 2018

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Philippines

Israeli President Reuven Rivlin, left, walks along his Philippine counterpart Rodrigo Duterte as they meet in Jerusalem, Israel, Tuesday, Sept. 4, 2018.

TAIPEI — The resource-rich Philippines is doubling up development of its own fuel sources as world oil price hikes hit the largely impoverished population.On October 17, Philippine President Rodrigo Duterte signed a service contract with the Israeli energy exploration firm Ratio Petroleum to scout for fuel under the South China Sea, the Department of Energy in Manila said. It is the first Philippine-foreign energy contract signed since 2013.

The Philippines is talking separately with China, despite a maritime sovereignty dispute, about another joint exploration deal.

Pursuit of joint exploration with foreign countries reflects not only a lack of technological expertise in the Philippines to exploit its own undersea fuel reserves, but also an urgency to find that fuel, experts believe.

“It’s ideal to probably have a good source of oil,” said Jonathan Ravelas, chief market strategist with Banco de Oro UniBank in Metro Manila. “It would be ideal if we can be self-sufficient. It would save money given the rising oil price.”

Price-sensitive consumers

Oil price hikes have rippled around the world this year but hit the Philippines especially hard because food staples such as rice have suddenly started costing more at the same time. Inflation was 6.4 percent August, the highest in Southeast Asia, and 6.7 percent in September.

About one-fifth of the 100 million-plus Philippine population lives in poverty, meaning some feel a pinch when they get gasoline for their motorcycles or buy tickets for public transport.

Duterte, an otherwise popular president, saw his net trust rating fall from 75 to 57 points from December through June in part because of inflation, analysts believe.

Philippine President Rodrigo Duterte delivers his State of the Nation address at the House of Representatives in Quezon city, Metro Manila, Philippines July 23, 2018.

Prices for Brent crude oil hit $78.90 per barrel on the world market in September, up from $72.50 a month earlier, for a 40 percent increase over the previous year. Sino-U.S. trade disputes and a cut in oil export loading by Iran have driven the increases.

“The President has been very clear – our country needs to attain energy security and sustainability at the soonest possible time,” energy department Secretary Alfonso Cusi said via his department’s website last week.

“We are currently experiencing how our dependence on importation has left us at the mercy of price movements in the global oil markets,” he said. “We need to boost the exploration and development of our own energy resources and the awarding of the petroleum service contract to Ratio Petroleum is a step in the right direction.”

Oil and gas exist; expertise lags

The Philippines controls untapped fuel deposits estimated at $26.3 trillion, the state-run Philippine News Agency said in February, calling that amount “more than enough to free the country from the shackles of poverty.”

But its contractors lack the exploitation expertise available in Western countries, analysts believe. In Asia, Vietnam and Myanmar also rely on foreign partners to tap fuel under the sea.

“Often these frontier economies don’t have good capabilities in that area,” said Rajiv Biswas, executive director and Asia-Pacific chief economist with the research firm IHS Markit.

“Definitely oil and gas technology is a key area where developing countries, especially countries like the Philippines, need the help of big global players who have advanced technology in oil and gas,” Biswas said. Developing countries may also need the foreign contractor’s investment, he added.

Manila is no stranger to foreign oil exploration deals, but deals can be elusive because estimated reserves are not on the scale of places such as the Middle East, while parts of the South China Sea west of the Philippine archipelago are contested. Five other governments claim all or part of the same waters.

Philippine officials brought on Shell Philippines Exploration, a subsidiary of Royal Dutch Shell, in 2002 to help explore a major undersea tract called the Malampaya gas field. Gas from that field accounts for 20 percent of domestic electricity requirements but Philippine media say reserves are forecast to start declining by 2022.

China and the Philippines have talked about joint oil exploration since 2017, with China saying it would be willing to accept just a 40 percent share of any discoveries. The two sides still dispute sovereignty in parts of the South China Sea, but since 2016 officials from both have set the dispute aside to work together economically.

The Israeli firm is untested so far, analyst say, but it should pay attention to potential competition. The 7-year contract calls for tapping 416,000 hectares in an undisputed zone for potential oil and gas.

“If they want to get more oil exploration projects in the Philippines, they better measure up, because China is coming in,” said Eduardo Araral, Philippine and South China Sea-specialized associate professor at the National University of Singapore’s public policy school.

Renewables

Philippines’ Ayala Corp. Pivots To Renewables With Vietnam Solar Investment

25 October 2018

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Philippines ,
Vietnam

Jaime Augusto Zobel de Ayala, chairman and CEO of Ayala Corp., speaks during the Belt and Road Summit in Hong Kong on Sept. 11, 2017. (Photo: Vivek Prakash/Bloomberg)

AC Energy, a subsidiary of Philippine conglomerate Ayala Corp., has pledged to use technology to improve lives and ensure a sustainable future for all. It recently announced a deal in Vietnam to build out 80 megawatts of solar electricity generation capacity, in advance of Vietnam’s June 2019 feed-in-tariff change. This is the latest in a string of deals for AC Energy, which plans to develop 5 GW of attributable capacity by 2025, half of which will come from renewable energy, requiring an investment of around $2 billion of equity.

AC Energy is expanding beyond the Philippines, and has identified Indonesia and Vietnam as key target markets with expansion plans that will complement existing renewables projects in its home country. The company’s climate-friendly transition is aided by more favorable regional policies toward renewable energy, according to AC Energy’s website.

Earlier this year, I profiled Nguy Thi Khan, one of the founders of Vietnam’s Green Innovation and Development Centre (GreenID), who won the prestigious Goldman Environmental Prize for demonstrating the viability of sustainable energy solutions for Vietnam. As a result of her work, the Vietnamese government shifted its plans to include more renewable energy in the future. Vietnam’s current feed-in-tariff of $0.095 per kilowatt hour is quite generous.

Much of the cash for AC Energy’s renewables build-out comes from ongoing sales of its coal-fired assets. It sold roughly 35% of its coal-fired capacity to AboitizPower, another Philippine power industry giant, in a deal announced on Sept. 26, for a reported $579.2 million (P31.4 billion), one of the largest regional power transactions in several years. AboitizPower is purchasing equity in two coal-fired plant partnerships, GNPower Mariveles and GNPower Dinginin. (Erramon I. Aboitiz, the chairman of AboitizPower, is a member of Asia Business Council, where I am adjunct fellow). After the sale, AC Energy retains 51% of voting shares on both assets. AC Energy’s post-sale generation mix stands at 800 megawatts of thermal energy capacity and 400 megawatts of renewables.

AC Energy President and CEO Eric T. Francia noted the need to scale up the company’s renewables if they are to meet their 2025 goal. “While we will continue to develop projects in the Philippines, a lot of that incremental growth in renewables will have to come through international expansion,” he said.

Renewables

PHL ‘seriously’ eyeing nuke energy–DOE chief

25 October 2018

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Philippines

AFTER nearly 40 years, the government is now seriously considering the possibility of allowing the construction of nuclear power plants in the country.

“The Department of Energy [DOE] is studying all sources of energy to address the energy security of the future. We’re pushing nuclear and last year finished the draft on national policy on nuclear energy,” Energy Secretary Alfonso G. Cusi said on Monday at the sidelines of the Kapihan media forum at the Manila Hotel.

“We are pushing to have nuclear energy in the country because we want industry to flourish and one of the considerations the manufacturers are looking at is the cost of energy and labor.” He conceded that the Philippines has one of the highest costs of energy in Asia—ranked 16th-most expensive of 44 countries surveyed in a 2016 study by Meralco—but assured the public the Duterte administration is seriously thinking of ways to bring down the cost of electricity.

“Aside from affordability, we are also looking at the quality of energy,” Cusi added, explaining that frequent fluctuations lead to the breakdown of machinery and equipment that rely on electricity, a matter that has discouraged investors.

Cusi observed that the only reliable and affordable source of power is nuclear, and the policy option is “not necessarily to revive the Bataan Nuclear Power Plant [BNPP],” but consider other places in the archipelago.

In 1976, then-President Ferdinand E. Marcos ordered the building of a $2.3-billion nuclear power plant in Morong, Bataan, as the then-dictator’s bid to diversify the Philippines’s energy source. The plant was completed in 1984, but failed to produce a single watt of electricity due to strong public opposition.

Critics pointed out that the BNPP sits on an earthquake-prone fault, and said the loan-funded plant was overpriced.

It was mothballed after Marcos was ousted in 1986 and in the aftermath of the Chernobyl nuclear disaster.

“There’s too many negatives implanted in our mind—especially the BNPP, which we were told is substandard, sitting on an earthquake fault and would collapse—and other reasons [were given] simply to stop it from operating,” Cusi said.

He added that after 40 years, “all of our fears have been addressed. We realized that what we were told is not true, but [already] too many opportunities have been lost.”

Cusi said the apprehensions about the security of nuclear power plants have already been raised in the past, and, he stressed, it is time for the Philippines to learn from its neighbors.

“The Duterte administration is forwarding the idea to use nuclear power. Nuclear technology has advanced so much we should ride along with this new technology,” the energy chief said.

Renewables

Calls for removal of energy obstructions

25 October 2018

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Vietnam

Vietnam is among those hardest-hit by climate change, but renewables investment is slow

As Vietnam strives to ensure sufficient energy sources, it has been urged by the international community to enable private investors to engage more in the country’s energy industry.

Last Wednesday, Hanoi hosted an event of high significance: the launch of the “Special Report on Global Warming of 1.5 degrees Celsius” by the Intergovernmental Panel on Climate Change (IPCC). The report was approved only a few days prior, and Vietnam was selected as the first country to share this important research.

According to the IPCC, the event was important for Vietnam, as the country is one of the countries in the world to be hit hardest by climate change. It also remains at a slow pace in reducing greenhouse gas emissions and enabling private investors to invest heavily into renewable energy (RE) projects. It is acknowledged the country can attract more of this type of investment if it removes obstructions against investors.

Caitlin Weisen, United Nations Development Programme (UNDP) country director in Vietnam, said that the country has great potential for RE. Vietnam can deploy at least 85 gigawatts (GW) of solar photovoltaic generation capacity and 21GW of wind energy generation well before 2050, showing that a low-carbon pathway is possible. The combined total technical capacity (126 GW) is an equivalence of 80 per cent of Vietnam’s total installed energy capacity by 2030 (129.5 GW).

Vietnam also boasts high potential for energy-saving of up to 7 per cent relative to business as usual, through to the year 2035. Energy efficiency (EE) measures can remove some 67 million tonnes of carbon dioxide equivalent (CO2e) by 2035 as well as deliver additional environmental benefits.

“Cutting across all climate efforts is of importance to enabling the access, contribution and involvement of the private sector,” Weisen said.

A recent UNDP survey of 13 large banks, institutions, and investors show that there is at least $10 billion readily available for investment in RE and EE in Vietnam, amounting to almost 40 per cent of the total investment required by Vietnam by 2030.

“This investment is possible if the current barriers constraining such investments are addressed, especially the low price of electricity that lowers incentives for efficient use, and the existing format of power purchase agreements (PPAs) that deter investors from investing,” read a UNDP report on private funding opportunities for RE and EE investments in Vietnam, released last week.

A foreign bank representative said that it stands ready to invest $1 billion into around 10 RE projects in the country. “However, the bank’s engagement in Vietnam’s RE market is presently being prevented by PPAs that are deemed un-bankable,” the representative said.

Another bank also revealed that it has $10 billion set for RE investment loans worldwide, and would be happy to become engaged in RE investments in Vietnam. “The bank could theoretically offer up to $1 billion for Vietnam, but currently has several major concerns about the PPA framework that prevent its full engagement,” a bank source said.

A third bank also stated that if the regulatory framework was simplified it could provide $500 million annually for RE and EE in Vietnam’s state-owned enterprises through concessional loans, as well as provide another $500 million annually for project preparation. “However, Vietnam’s Law on Public Investment procedures are too long – larger projects may take several years to develop during which time procedures may change,” the bank’s spokesperson said. “Moreover, flexible credit lines related to RE/EE are effectively not allowed since most RE projects have to be approved by the prime minister, which further complicates lending.”

The Ministry of Industry and Trade (MoIT) has approved over 70 new solar power projects to be put into operation before June 2019, with a total designed capacity of over 3,000 megawatts (MW).

According to pan-Asia consulting firm Dezan Shira & Associates, as of July, solar power projects with a total capacity of 12,600MW were in the pre-investment phase, while 1,430MW was in the development and feasibility phase. Around 1,000MW is under construction, while only 8MW is currently in the operating stage. Also, 748 solar roof-top projects were in operation with a total capacity of 11.55MW.

Last year the Vietnamese government issued Decree No.11/2017/QD-TTg on mechanisms for encouraging the development of solar power in Vietnam, offering a feed-in-tariff (FiT) for utility solar power plants of 9.35 US cents per kilowatt an hour (kWh) for 20 years. The FiT will be applicable for projects beginning operations before June 30, 2019, except for those in the south-central province of Ninh Thuan, which have a 2020 deadline.

Currently the FiT for wind power is set by the Vietnamese government at 7.8 US cents per kWh. However, this price will be increased to 8.5 US cents as November 1.

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