News Clipping Archive - Page 1235 of 1321

Electricity/Power Grid ,
Energy Efficiency ,
Others

Power infrastructure to drive Indonesia’s energy sector growth: Fitch Solutions

17 January 2019

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Indonesia

Construction of power infrastructure — chiefly coal-fired power plants — will remain the primary driver of growth in Indonesia’s energy and utilities sector for the near future, said Fitch Solutions Macro Research in a Jan 16 report. However, there are risks that power projects may be postponed due to the country’s widening current account deficit and a weakening rupiah, which would then cause a drag on growth.

Power infrastructure’s continued dominance

The power sector accounts for over 85 per cent of the total value of all energy and utilities projects, with a total project value of US$64.1 billion, according to Fitch Solutions’ key projects database. State-owned Perusahaan Listrik Negara is involved in the majority of projects that are in the pre-construction and construction phases, and Fitch Solutions expects the government’s investment in energy projects to grow, expanding electricity capacity to keep pace with rapid economic growth.

Fitch Solutions forecasts real growth of 4.6 per cent for the power infrastructure sector in 2019, to average 5 per cent annually between 2019 and 2027. The sector is expected to be the main pillar supporting growth of the overall energy and utilities sector, ahead of the water and pipeline infrastructure sub-sectors.

Given Indonesia’s established coal industry and substantial coal reserves, coal is likely to be “the cost-competitive fuel of choice for electricity generation over the next decade”, expected to account for 53 per cent of generation in 2028, up from 49 per cent in 2018. Coal-fired power plant projects currently in the pre-construction and construction phases are valued at US$28 billion.

Macroeconomic headwinds

However, power infrastructure construction does face the risk of postponed projects amid macroeconomic pressure. In September 2018, in a bid to lower the current account deficit by reducing imported construction materials, the government announced plans to postpone 15,200 megawatts’ (MW) worth of projects — though further action has yet to be taken. The projects are part of Prime Minister Joko Widodo’s flagship 35,000MW electricity procurement plan.

In 2018, a weakening rupiah increased construction costs and widened the current account deficit. Said Fitch Solutions: “We note that a further depreciation of the rupiah may trigger an actual postponement of key power projects that will consequently slow down growth of the power infrastructure sector.”

Water infrastructure growth to stay steady

In the smaller water infrastructure sub-sector, Fitch Solutions expects moderate growth as Indonesia continues to work toward improving rural access to clean water, while building water treatment facilities and upgrading urban sewerage systems. Their database shows 53 projects worth US$4.5 billion currently under planning and construction.

One key project in the water project pipeline is the massive US$652 million Jakarta Sewerage System (Zone 6), accounting for 14 per cent of the total value of water infrastructure projects. Though the project has suffered numerous delays over the years, authorities are negotiating with Japan International Cooperation Agency over a US$280 million loan that will potentially solve financing issues, noted Fitch Solutions.

Fitch Solutions is maintaining its water infrastructure sector growth forecast of 4.2 per cent in 2019, with average annual growth of 4.8 per cent from 2019 to 2027, but will revise this once the Jakarta Sewerage System (Zone 6) project moves into the construction phase.

Others

PHL seeking to expand application of ‘green bonds’

17 January 2019

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Philippines

THE GOVERNMENT is looking to expand the list of environmental projects eligible for financing via the issue of so-called “green bonds.”

“Government is looking at expanding the coverage of the ASEAN (Association of Southeast Asian Nations) Framework for Green Bonds to cover such sectors as transportation, infrastructure, and commercial banking. We hope to mainstream access to green financing through the banks and microfinance institutions,” Finance Secretary Carlos G. Dominguez III said in a speech during the Forum on Green Finance Towards a Sustainable Philippines on Thursday in Manila.

In August, the government adopted the guidelines on green bond issuances under the ASEAN Green Bonds Standards, which uses proceeds to fund renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of living natural resources and land use, clean transportation, climate change adaptation, and green buildings.

Mr. Dominguez added that the government is also exploring possible funding of various public-private partnerships through green financing.

Budget Secretary Benjamin E. Diokno meanwhile said that the government has allotted P242.6-billion worth of climate-change mitigation projects this year, which accounts for about 6-7% of the 2019 national government budget, compared with the 1-2% average share about two decades ago.

“Most of these funds are allocated to the Department of Agriculture (DA) for climate-resilient crops and food security-oriented programs, to the DENR (Department of Environment and Natural Resources) for research and implementation of climate change laws and policies, and yes, to the Public Works Department for flood control and seawall projects,” he said.

British Ambassador to the Philippines Daniel Pruce meanwhile said that the Philippines can tap the £1.2 billion Prosperity Fund to bridge the gap in financing environment-friendly projects.

“We are looking to develop areas where we can work specifically in partnership. We have an extensive program, the Prosperity Fund. Elements of which will be focusing on low-carbon economic development and doing that here in the Philippines. We are in early stages of that program. The definition of specific projects, areas is still to be clarified and identified,” he said.

In the same forum, the Bangko Sentral ng Pilipinas (BSP) said that it is focusing on capacity-building programs for banks seeking to participate in green bond issues.

“For now our focus is on capacity building. Our efforts on the last years on this are getting more understanding in risk measurement, and embedding risk management principles in our banks. We are also seeing if there’s anything in terms of regulatory guidance, possible regulatory incentives, these are the things that under study,” said Bernadette Roman-Tayag, Head of the BSP’s Inclusive Finance Advocacy Office, during the forum.

But she noted that the BSP wants to mainstream green financing in the local banking system “without it just being seen as a compliance mechanism,” and attracting investments from the private sector.

Three local private banks have participated in green bond issuances in the Philippines in 2018.

Bank of the Philippines Islands (BPI) was involved in a $225-million green bond transaction, $90 million was also raised through BDO Unibank, Inc. and $150 million through China Banking Corporation — which were backed by multilateral institutions Asian Development Bank and International Finance Corporation.

Securities and Exchange Commission Commissioner Ephyro Luis B. Amatong said that green bonds are currently seen as a high-risk investment.

“We want to structure them in a way that makes them financially viable. We are looking at where we can mitigate, or de-risk the project. The interest of the private sector to finance them to be commercially viable are so important,” Mr. Amatong said.

National Economic and Development Authority (NEDA) Assistant Secretary Mercedita A. Sombilla meanwhile said that the government is pushing to remove investment restrictions on advanced environmentally-friendly technology.

The government has reiterated its commitment to keep the rise in the global temperature below 1.5 degree Celsius.

“The challenges posed by climate change demand all hands be on deck: government, the private sector and the non-government organizations. Among the weapons we have is green financing. This will allow us to mobilize investments for a range of initiatives, from wider use of renewable energy to improving the resilience of our communities,” Mr. Dominguez said.

“The Philippines is among the most vulnerable to the effects of climate change. We have seen how increasingly severe weather conditions inflict a growing cost on our economy, increase the vulnerability of our communities and threaten our food security. We need to put in our best efforts to turn back climate change and improve resilience to minimize economic dislocation,” he added. — Elijah Joseph C. Tubayan

Electricity/Power Grid

Frost and Sullivan finds latent demand for EVs in Malaysia

17 January 2019

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Malaysia

KUALA LUMPUR: A survey by business consulting firm Frost and Sullivan has found a latent demand for electric vehicles (EVs) in Malaysia.

Associate partner and senior vice president of mobility Vivek Vaidya said the survey found that Malaysians have a good understanding of EV technology and prices compared to conventional vehicles, as well as EVs’ association with renewable energy sources and environmental issues.

“This shows that Malaysians are quite well aware (of EVs) and therefore we believe that there is latent demand in the market for EVs,” he told reporters at a briefing on Malaysia’s Automotive Market Outlook 2019 here yesterday.

Elaborating on the survey, he said 37 per cent of the correspondents said that they were willing to consider an electric vehicle as their next product of choice, with about 50 per cent of them also saying they expected EVs to be more expensive than conventional cars.

He added that the percentages are considered to be very high in a market where electric vehicles are almost non-existent.

Vaidya said for EVs to progress, the government needs to outline any policy that could help develop EVs in the upcoming National Automotive Policy (NAP).

“Currently we have an Energy Efficient Vehicle (EEV) policy which tends to put all the vehicles into the same
bracket.

“If the government wants to pursue EVs, biofuel or compressed natural gas/liquefied petroleum gas (CNG/LPG) vehicles, there needs to be a focused incentive plan or focused ecosystem creation to make these products successful,” he said.

He said the NAP should also outline a clear definition of EVs, how the ecosystem would be created, how the vehicles would be manufactured and what incentives would be given. – Bernama

He added that the government should also clarify whether it wants to pursue zero emissions vehicles or low emissions vehicles. –Bernama

Oil & Gas

Pertamina’s gas production up 51 pct in 2018 – director

17 January 2019

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Indonesia

JAKARTA, Jan 17 (Reuters) –

* Gas production by Pertamina, Indonesia’s state-owned energy company, soared 51 percent to 3,064 million cubic feet per day (MMCFD) in 2018 from 2,035 MMCFD in 2017, a company director said on Thursday

* Meanwhile, Pertamina’s crude oil output increased 15 percent to 392,000 barrels per day in 2018 from 342,000 bpd in 2017, upstream director Dharmawan Samsu told reporters (Reporting by Wilda Asmarini, Writing by Fergus Jensen, Editing by Sherry Jacob-Phillips)

Oil & Gas

Indonesia to export 185 LNG cargoes from Tangguh, Bontang in 2019 -regulator

17 January 2019

–

Indonesia

JAKARTA, Jan 16 (Reuters) –

* Indonesia plans to export 185 cargoes of liquefied natural gas (LNG) from Tangguh and Bontang LNG plants in 2019, below the 203 cargoes the two plants exported in 2018, upstream oil and gas regulator (SKKMigas) officials said

* Bontang is expected to export 93 cargoes of LNG in 2019 versus 118 in 2018

* Bontang targets to produce 132 cargoes of LNG in 2019, down from 150 in 2018

* Tangguh is expected to export 92 cargoes of LNG in 2019, up from 85 in 2018 -regulator

* Tangguh aims to produce 120 LNG cargoes in 2019, unchanged from 2018

* Of the 2019 export target, 9 cargoes from Bontang and 7 from Tangguh are currently uncommitted, SKKMigas financial chief Parulian Sihotang said (Reporting by Wilda Asmarini; writing by Fergus Jensen; editing by Jason Neely )

Energy Economy ,
Energy Efficiency

DOE receives 331 applications for projects of national significance

17 January 2019

–

Philippines

THE Department of Energy (DOE) has received 331 applications from industry stakeholders seeking the certification of their power projects as “energy projects of national significance [EPNS].”

As of January 11, the DOE said in its website that 293 applications were accepted while 38, or 11 percent, were notified of their noncompliance as to form or documentary requirements.

To date, the DOE has awarded certificates of EPNS to 12 power projects. The latest was awarded last December 20 to Total Power Inc. for its 100-megawatt (MW) Sarangani solar-power project, currently in a pre-development stage.

The 11 other projects are the Visayas-Mindanao Interconnection Project (VMIP) of the National Grid Corp. of the Philippines, Kalinga geothermal-power project of Aragorn Power and Energy Corp. (APEC), the 151.2-MW Talim wind power project of Island Wind Energy Corp., the 2×600-MW coal project of Atimonan One Energy Inc., Coal Operating Contracts (COC) 185 and 186 of the Philippine National Oil Co.-Exploration Corp.’s (PNOC-EC), the 500-MW pumped storage hydropower project of Coheco Badeo Corp. (Coheco-Badeo), the 650-MW Pagbilao combined cycle gas turbine power plant of Energy World, the 15-MW Masbate coal plant of DMCI Power Corp., the 1.2-MW biogas power plant project of First Quezon Biogas Corp. and the 6-MW Pangasinan Green Atom Waste to Energy project of Green Atom Renewable Energy Corp.

The issuance of EPNS certificates is stipulated under Executive Order (EO) 30, which states that concerned government agencies shall act upon applications for permits not exceeding a 30-day period. If no decision is made within the specified processing time frame, the application is deemed approved by the concerned agency.

“It is the policy of the State to ensure a continuous, adequate and economic supply of energy. Hence, an efficient and effective administrative process for energy projects of national significance should be developed in order to avoid unnecessary delays in the implementation of the Philippine Energy Plan [PEP],” the EO stated.

The EO also stated that the CEPNS is not an assurance or an automatic guarantee of favorable action by the permitting agencies, but a requirement from them to immediately act on the applications for permits/licenses within the prescribed periods under prevailing laws.

Renewables

Bangkok Industrial Gas is to begin construction of a second H2 plant

16 January 2019

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Thailand

Bangkok Industrial Gas (BIG), a joint venture between Thai investors and Air Products and Chemicals Inc, proceeds with plans to develop a second hydrogen (H₂) plant in Map Ta Phut, Rayong, in line with the Thailand government’s strategy to promote the use of H₂ as an alternative energy to fossil fuels.

The ฿500m (Thai Baht) ($16m) investment will emphasise BIG’s role as Thailand’s largest H₂ gas producer, supporting the growing industry, in particular, the petrochemical and refinery sectors in the European Economic Community (ECC).

Piyabut Charuphen, Managing Director of BIG, announced the start-up of the H₂ plant at the ceremony held in Map Ta Phut industrial estate in Rayong, where the development budget is due to be spent.

The H₂ plant will be constructed using advanced technology from the US and will produce 12,000 tonnes of H₂ per annum at full capacity. The commercial operation of the H₂ plant began at the start of 2019 and is expected to be used in the production process of propylene oxide, a raw material that PTT Global Chemical Public Company, a petrochemical flagship of PTT group, uses in producing its polyol products.

The H₂ production business has been growing rapidly in Thailand with demand rising 5-10% annually due to increasing consumption in the petrochemical and automotive sectors. The high purity H₂ produced by BIG will not only be supplied to the petrochemical and refinery sectors, but will also be used as fuel for H₂-fuelled vehicles.

The plant construction is scheduled to complete in Q4 2019.

Source: BIG

Oil & Gas

Barakah unit secures five-year service contract from Petrofac

16 January 2019

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Malaysia

KUALA LUMPUR (Jan 16): Barakah Offshore Petroleum Bhd’s unit has won a five-year contract to service Petrofac (Malaysia-PM304) Ltd’s oil and gas fields offshore peninsular Malaysia.

In an exchange filing today, the group said the contract, awarded to its wholly-owned subsidiary PBJV Group Sdn Bhd for the years 2018 to 2023, includes Pan Malaysian maintenance, construction and modification works for structures and facilities for the client’s oil and gas fields.

The contract’s total value is not fixed and will depend on the actual scope based on work orders to be issued by the client from time to time throughout the contract duration, which is effective for five years from July 17, 2018.

Barakah expects the contract to contribute positively to its earnings and net assets during the period.

Yesterday, the debt-laden company announced it was still negotiating an amicable debt settlement proposal with its lenders and creditors.

That statement came after Kuala Lumpur High Court’s order to restraint any proceedings and actions by the lenders against Barakah and PBJV expired on Monday. The restraining order was obtained on Oct 12 last year.

Shares in the Main Market-listed group slid half a sen lower to close at 5.5 sen today, giving the oil and gas service provider a market capitalisation of RM45.97 million.

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