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  • Oil & Gas
21 February 2019

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  • Indonesia

* Indonesia is offering five oil and gas blocks, three greenfield and two already producing blocks, in its first round of tenders in 2019, Deputy Energy Minister Arcandra Tahar told reporters on Thursday

* The three exploration blocks being offered are Anambas Block in offshore Natuna, West Ganal Block in offshore Makassar Strait and West Kaimana Block onshore and offshore West Papua

* The other two blocks are Selat Panjang Block and West Kampar, which have been offered in the previous tender, but there was no winning bid

* “We offer them again with (a) more attractive clause. There are costs from previous contractors that we no longer include as costs that must be borne by the tender winner,” Tahar said

* All of the oil and gas blocks will use gross split contracts. The government expects $29 million of signature bonus from these offered blocks and bidding documents must be submitted on April 25th at the latest

  • Electricity/Power Grid
  • Energy Cooperation
21 February 2019

 – 

  • Thailand

KUALA LUMPUR (Feb 21): Ranhill Holdings Bhd (Ranhill) and Thailand-based Treasure Specialty Company Ltd (TS Co) will jointly develop a 1,150 megawatt combined cycle gas turbine power plant in Kedah for power export to Southern Thailand.

Upon completion, the power plant is expected to dispatch 100 per cent of its generation capacity through a dedicated transmission line to a substation in southern Thailand, said Ranhill which signed the collaboration agreement with TS Co here today.

“We certainly expect the proposed power plant project to boost the group’s earnings in the long term, in addition to diversifying our energy portfolio regionally, while our investment will contribute towards job creation and economic growth of Northern Kedah,” said Ranhill Group’s president and chief executive Tan Sri Hamdan Mohamad.

Furthermore, the supply of supplementary power to Songkhla, Satun, Pattani, Yala and Narathiwat would certainly act as a catalyst for further development of these provinces in southern Thailand, he pointed out.

Hamdan said providing cost-effective, environmentally clean power to help address power shortage in some parts of southern Thailand would  be a game-changing opportunity for the group.

“It will not only enable us to expand our domestic power generation business but it will also take us beyond our existing water, wastewater and water reclamation activities in the country,” he added.

Ranhill said the project planned to utilise the existing infrastructure gas Combined Cycle Gas Turbine (CCGT) plant that would involve purchasing LNG from Petronas, before converting it to natural gas at the Melaka regasification plant.

It will then be transported through the Peninsular Gas Utilisation (PGU) network to the power plant before electricity is supplied to Thailand.

Evaluation and discussion concerning the project is ongoing, as it is still subject to approval from relevant authorities in both Malaysia and Thailand, said the group.

Meanwhile, TS Co, the advisor for the group’s Thai water projects, is a specialist in project development, fundraising and financial restructuring.

“Given there are strong prospects to be leveraged in the power sector, it made sound business sense for our two entities to jointly develop and invest in the power plant,” it added.

This is also very much in line with Ranhill’s aspirations to grow its footprint in Thailand and China, where the group has been operating since 2005. — Bernama 

  • Electricity/Power Grid
  • Renewables
21 February 2019

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  • Philippines

THE European Union (EU) and the Department of Energy (DOE) are pushing ahead with the lighting of off-grid communities, which would benefit close to 100,000 households, especially in the Bangsamoro region.

The EU Delegation’s Head of Development Cooperation Enrico Strampelli and DOE Undersecretary Felix William B. Fuentebella spearheaded the commemoration of the switch-on ceremony for solar power of electrification and livelihood projects.

Both the EU and the DOE support these initiatives through the Access to Sustainable Energy Program (Asep).

The EU provided a €60-million (P6 billion) grant to the Philippine government for the implementation of a program that would increase the share of indigenous and renewable sources in the energy mix while expanding the access to electricity services in remote areas and populations, as well as pursue new energy-efficiency strategies.

The ceremony represents the powering of households in Sitio New Mabuhay and thousands of households in other off-grid areas in the country. It also highlights the productive use of renewable energy for increased income generation in rural communities.

Under the Asep’s Photovoltaic (PV) Mainstreaming program, about 40,500 solar home systems, each with a 50-watt peak capacity, will be installed in remote off-grid communities in various provinces in Mindanao.

To date, the SHS installation has been completed in Sitio New Mabuhay, Barangay Little Baguio in the Municipality of Malita, Davao Occidental.

About 100 recipient households are already enjoying the benefits of superior lighting from solar PV.

Asep is being carried out as a partnership between the EU and the DOE. Other key stakeholders include the National Electrification Administration, Energy Regulatory Commission, National Power Corp., electric cooperatives and local governments.

Earlier the EU urged local stakeholders to tap its available funding for sustainable and reliable energy projects.

EU Project Manager for Cooperation Section Willy Hick said during the Energy Smart 2018 event of the European Chamber of Commerce in the Philippines that Asep provides investment support for innovative energy solutions.

One of Asep’s three components is to provide a €21-million investment support package for pro-poor and climate-resilient innovative business solutions in the power sector.

Hick said the EU urged stakeholders such as electric cooperatives, communities and entrepreneurs, among others, to submit their proposals for projects intended to help provide electricity to rural communities, particularly in Mindanao.

Under the Asep, the EU grants a €7-million technical assistance and capacity building for reform, as well as another €29-million investment support through the World Bank, to provide 40,000 solar-home systems in Mindanao.

In total, it provides €57 million to help the Philippines promote sustainable and reliable energy.

“We wish to extend the program,” Hick confirmed, and noted that the Asep will run until this year.

For future interventions, Hick said the EU aims to promote a “blending instrument,” which is a combination of loans and grants as investment support for viable businesses and projects that will generate new connections and additional power capacity.

He added that the EU will still be assessing the feasibility of “blending operations” and opportunities in the renewables sector in the country. This will be under the Electrification Financing Initiative, or the ElectriFi program of the EU, which is being rolled out in countries in Africa.

  • Energy Efficiency
21 February 2019

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  • Philippines

THE delay in the passage of the Energy Efficiency and Conservation Act (EE&C) is depriving the economy of the immediate benefits of the P37.8 trillion estimated savings from curbing energy use through 2040, the Philippine Energy Efficiency Alliance (PE2) said.

PE2, a non-stock, non-profit organization of energy efficiency market stakeholders, said in a statement on Thursday that the proposed law could also soften the impact of rising energy prices.

“This means that households, small businesses, buildings, industries, public facilities and other energy end-use sectors stand to collectively save less than P 37.8 trillion in avoided energy purchases between now and 2040 if the passage of the EE&C Act slips beyond this first quarter of 2019,” PE2 President Alexander Ablaza said.

On Jan. 16, 2019, the Bicameral Conference Committee approved the reconciled Senate and House versions of the measure, which institutionalizes a framework to advance energy efficiency and conservation practices in the country.

The reconciled version of Senate Bill No. 1531 and House Bill No. 8629 calls for the creation of a national energy efficiency and conservation plan that sets national targets, strategies, while imposing a regular monitoring and evaluation system.

The reconciled bill is awaiting the signature of the President, who recently signed several laws.

Mr. Ablaza said the country is the last among members of the Association of Southeast Asian Nations (ASEAN) to enforce energy efficiency and conservation through legislation.

“The EE&C bill had a 28-year history of being refiled since the 8th Congress. The country cannot afford to prolong this delay,” he said.

Mr. Ablaza renewed the call of PE2 members for the immediate signing into law of the reconciled bill after the continuous increase in power and fuel prices.

He said delays in the passage of the bill pushes back the positive effects of mandatory implementation, including dampening the rise in energy prices.

“Our energy market badly needs to arrest the business-as-usual escalation of electricity tariff and fossil fuel prices, and a further delay in the implementation of energy-saving projects, programs and investments will only serve to delay their decelerative effects on energy price increases,” he said.

He said scaling up an energy efficiency program eases the rise energy prices as it results in deferring new capital expenditure for upgrades in energy generation, transmission and distribution infrastructure. It also cuts the expected rise in the country’s dependence on imported fuel sources, he added.

Mr. Ablaza earlier said that the bicameral committee agreed to re-anchor the fiscal incentives provision of the bill on Executive Order No. 226 or the Omnibus Investments Code of 1987, as amended.

In an earlier statement, PE2 said the Senate panel viewed the adjustment as a reasonable balance between the incentive rationalization objectives of the Department of Finance and the requirements of private investors.

The House panel agreed with the compromise reduction, but wanted to put on record that every peso of granted incentives to energy efficiency projects will result in a P2.31 reflow to the national treasury in the form of additional tax revenues, in addition to other socio-economic benefits.

“The conferees from both chambers likewise agreed to exempt energy efficiency investments from Article 32(1) of EO 226, thereby enabling foreign-owned projects to avail of fiscal incentives,” PE2 said.

The alliance said the Senate and House panels agreed to insert “clearer language” that mandates local government units (LGUs) to establish energy efficiency and conservation offices and appoint officers, with the option to do so within their existing plantilla and resource framework.

Also, the bicameral body accepted the Senate panel’s recommendation to include a new section that would encourage innovative procurement, contracting and financing procedures for government-implemented energy efficiency projects in public facilities.

The Department of Interior and Local Government and the Department of Science and Technology were added in the composition of the proposed inter-agency energy efficiency and conservation committee. — Victor V. Saulon

  • Renewables
20 February 2019

 – 

  • Philippines

MANILA – A Filipino scientist was recently appointed as one of the directors of the International Atomic Energy Agency (IAEA) in Vienna, Austria, the Department of Foreign Affairs (DFA) said Wednesday.

The DFA said Dr. Jane Gerardo-Abaya was appointed as IAEA’s Department of Technical Cooperation Division Director for Asia and the Pacific on Jan. 1.

She last held the post of section head at the same division.

Abaya is an Austria-based scientist who has been with the IAEA in various capacities since 1994.

She has spoken about educating students and teachers about nuclear science and technology and capacity-building in the same area.

An expert in applied geology and geothermal hydrology, Abaya finished her bachelor’s and master’s degrees in geology at the University of the Philippines.

She received her PhD in Applied Geology and Geothermal Hydrology from the Universität fuer Bodenkultur in Vienna, Austria in 2004, according to her profile on the Department of Science and Technology website.

She also worked as a geochemist at the Philippine National Oil Company and senior environmental planning researcher at the Department of Environment and Natural Resources.

She was a recipient of the Balik Scientist Award and a research grant from the Department of Science and Technology in 2008.

In 2017, Abaya received the “Superior Achievement Award” from IAEA Director General Yukiya Amano. She also received a “Distinguished Service Award” from then IAEA Director General Mohamed ElBaradei in 2008.

Abaya paid a courtesy call on Philippine Ambassador to Austria Maria Cleofe Natividad at the Philippine Permanent Mission in Vienna’s chancery on Jan. 18.

Natividad expressed the government’s full support for Abaya in carrying out her duties as a new division director at the IAEA.

The IAEA is the international center for cooperation in the nuclear field. According to its official website, the agency works with its partners worldwide to promote safe, secure and peaceful use of nuclear technologies.

  • Oil & Gas
  • Others
20 February 2019

 – 

In January Energy World Corporation (EWC) announced it had been given final approval by the Department of Energy (DoE) under their new regulations to build the country’s first LNG import terminal and regasification facility, which is under construction on Pagbilao Grande island in Quezon.

The Australia-headquartered company – which also operates in its home market and Indonesia – has stated that the terminal, which is expected to be operational by March 2020, will have an import capacity of 3m tonnes per annum (tpa), providing up to 3000 MW of generation capacity.

Along with the terminal, EWC has approval to develop a 650-MW gas-fired power plant next to the facility, with the import terminal set to supply both the needs of the new power station and those of third-party clients.

“There is a great opportunity for LNG energy production given the growing electricity demand in the Philippines,” Graham Elliott, country manager of EWC, told OBG. “Given the low production cost, LNG-generated electricity would be competitive with any other energy source and can be less expensive than coal.”

This major investment project opens a path for other energy companies in an expanding market, though early arrivals will likely gain a competitive advantage.

Rising energy demand and falling gas supply spur LNG investment

The need to boost imports and regasification capacity is becoming increasingly urgent with the rapid depletion of the Malampaya gas field.

The field currently supplies three gas-fired power stations in Luzon, which have a combined capacity of 2700 MW, 30% of the energy requirements of the Philippines’ most populous island.

However, reserves are declining rapidly and full-scale production is projected to end by 2024, with the wells set to be depleted by 2029 at the latest. Related: Permian Production To Break 4 Million Bpd In March

LNG imports will be needed to bridge the gap between supply and demand unless significant new deposits can be identified and brought on-line over the next five years.

This shortfall is set to increase as Philippine energy requirements rise over the coming decades. While installed generation capacity stands at 23,000 MW, the DoE estimates the country will need to deploy an additional 44,800 MW by 2040.

While the government is looking for renewable resources to account for 20,000 MW of this new capacity – and has expressed interest in developing nuclear power – LNG is likely to meet much of the new demand.

LNG project in Batangas to come on-line

At least some of that LNG supply will come from two other projects in the pipeline.

In January the DoE granted permission to Tanglawan Philippines LNG to develop a 2.2m-tpa LNG terminal and processing facility in the province of Batangas.

The company – which is a joint venture between domestic firm Phoenix Petroleum and the Chinese state-owned enterprise China National Offshore Oil Corporation – plans to commence construction this year, with commercial operations to begin at the $686m regasification plant in 2023.

As part of the project, Tanglawan Philippines LNG also plans to develop a 2000-MW gas-fired power station at an estimated cost of $1.3bn.

The state-run Philippine National Oil Company (PNOC) has expressed interest in joining the venture, with Alfonso Cusi, secretary of energy and chairman of PNOC, announcing in January that the parties had agreed in principle to the state-owned firm taking a stake in the development of the facility.

Further LNG import and processing facility

While the EWC and Tanglawan LNG projects were both endorsed by the DoE, another company has also applied for approval to construct an LNG facility. Related: MIT Professors: This Is The Energy System Of The Future

In December domestic energy firm First Gen announced that it had entered into a joint development agreement with Japan-headquartered Tokyo Gas. First Gen had applied for a notice to proceed permit with the DoE for the green light to build a LNG terminal and regasification facility in Batangas City.

If given the go-ahead, the prospective project would be used to provide feedstock to First Gen’s four existing gas-fired power stations as well as to third parties.

As the Philippines moves to scale back the use of coal in its energy mix – which currently accounts for 50% of power generation – the input of LNG can be expected to increase, improving cost efficiency and reducing carbon emissions, according to Jon Russell, executive vice-president of First Gen.

“Gas is among the most competitive energy sources, especially if coal prices keep rising,” Russell told OBG. “The capital cost of installing an LNG plant, or a regular gas-fired plant, is three times cheaper than coal and significantly less damaging for the environment. In addition, with a future of more renewable energy power generation, gas-fired plants are the perfect partner as their ability to ramp-up and ramp-down complements the intermittent nature of renewables.”

By Oxford Business Group

  • Others
20 February 2019

 – 

  • Indonesia

The newly-launched Indonesia Low Emissions Network (ILEN) has boosted the country’s aspirations of fulfilling its climate change goals as it moves to create a cleaner future.

The first network for climate change implementation in Indonesia, the ILEN – which was unveiled in Jakarta by NGO Green Partner Foundation on Tuesday – aims to improve and share information and knowledge on low emissions technology and best practices amongst its members comprising of government agencies, private companies and NGOs.

Set to strengthen partnerships between state and non-state actors and to help the government develop and review low carbon development related policies, the self-funded ILEN also hopes to improve access to low carbon financial resources and increase private sector involvement in implementing low carbon development policies in Indonesia.

Comprising of government agencies such as the Ministry of National Development Planning and the Peatland Restoration Agency as well as industrial giants such as state-owned oil and gas corporation Pertamina and the country’s largest cement maker, Semen Indonesia, the ILEN has also attracted attention from financial institutions, investment funds, civil society organisations (CSOs), scientists, academics, field practitioners, educators and community leaders.

‘The earth cannot wait any longer to be healed’

The wide range of stakeholders is proof that in Indonesia, low emissions development is seen as not just an issue which concerns the government but rather the wider public.

“Every effort that comes from state and non-state actors to reduce greenhouse gas (GHG) emissions would be very much appreciated,” said Prof Rachmat Witoelar, Indonesia President’s Special Envoy for Climate Change.

“We do not have the luxury of time for emissions reduction; the earth cannot wait any longer to be healed,” said Prof Rachmat at the ILEN launch.

Prof Bambang Brodjonegoro, Indonesia’s Minister of National Development Planning, was also at the launch in a strong show of support by Indonesia’s government for the ILEN initiative.

Another high-profile climate change figure at the event was Christiana Figueres, former Executive Secretary of the United Nations Framework Convention On Climate Change (UNFCCC) who said the ILEN was a “real opportunity for Indonesia to more deeply embed a low-emissions pathway in its medium and longer-term development plans.”

Source: Various

Reaching targets through better collaborations

In 2010, Indonesia voluntarily pledged to reduce emissions by 26 percent and up to 41 percent with international support, against a business as usual trajectory, by 2020. By 2030, the target for the former rises to 29 percent.

However, achieving the emissions reduction target is a complex task at both, the national and local levels. With limited resources, the Indonesian government needs non-government entities actors to play their part – which is where the ILEN comes in.

It can perhaps follow the example of the Paris Agreement, where collaboration across sectors was fundamental to reaching an agreement in 2015 which has since been signed by 195 countries. The Paris Agreement aims to limit global temperature increases to below two degrees Celsius by 2100 and no more than 1.5 degrees Celsius, if at all possible.

Taking a leaf out of that book, the ILEN will help facilitate collaboration among the numerous stakeholders in Indonesia and promote open discussion and the formulation of sustainable low emissions development plans. This must be done hand-in-hand with stable economic growth – which Indonesian President Joko “Jokowi” Widodo has set at 5.3 percent for this year.

Indonesia’s economy has traditionally relied heavily on agriculture and forestry, which has been blamed for deforestation and forest fires. It is the world’s fifth largest GHG emitter according to a 2017 study by the World Resources Institute and is actively seeking to reduce emissions in the land use sector.

In 2011, it issued a moratorium on the clearing of primary forests in a bid to reduce forest fires. As the world’s biggest producer of palm oil, much of Indonesia’s deforestation is blamed on the clearing of land for the cash crop and other agricultural activities.

However, the energy sector is a bigger GHG pollutant and the share of renewable electricity production has remained relatively static.

“Any network that promotes environmental and climate friendly development should be supported, and we will use the ILEN to focus on building awareness about these two issues as it brings benefits not only to Indonesians but also our neighbours,” said Hizbullah Arief, founder of Hijauku.com, an online portal dedicated to the green economy and sustainable development in Indonesia and the only media company which is part of the ILEN.

“Indonesia is struggling to move beyond fossil fuels and our renewable energy target is still low. Indonesia targets a 23% share of renewable energy by 2025. However, only less than 7.4% has been achieved so far,” he added.

With the World Economic Forum last month describing climate change as the second biggest threat facing humanity today after natural disasters, efforts such as the ILEN will help ASEAN go a long way in addressing an issue which can only be resolved with the deeper collaboration of all stakeholders.

  • Oil & Gas
  • Renewables
20 February 2019

 – 

  • Indonesia

The continuous decline in oil prices that has led to a lower contribution to national revenue should become a wake-up call for the government to immediately kick off fiscal reform that would speed up the use of renewable energy, experts in a recent discussion said.

According to a new report released by the Canada-based International Institute for Sustainable Development (IISD), most revenue from the oil and gas sector was indirectly allocated for fossil fuel consumption.

Based on the research that looked into the 2014-2016 fiscal years, the average contribution of the oil and gas sector stood at Rp 190 trillion (US$16 billion) annually or 18 percent of government revenue, but 14 percent of which was later channeled for fossil fuel subsidies.

“As revenue from fossil fuels declines, it is more important than ever for this clean energy transition to be accelerated. Indonesia’s past shows it can grow its economy without expanding fossil fuel extraction,” IISD senior policy advisor and lead for Indonesia Philip Gass said.

Without increasing revenue, the fossil fuel subsidy would only encourage the wasteful consumption of energy, leading to faster depletion of Indonesia’s oil, gas and coal reserves, the report further stated.

The institution believes that further fiscal reform on fossil fuel subsidies is also possible as past experiences of cutting off the fuel subsidy in 2014, which saved around Rp 200 trillion, was a success story that could be repeated again.

“In 2014’s fuel subsidy cut, the government was able to make greater investments in infrastructure and provide greater support for communities and social assistance programs. […] More subsidy reform will push for cleaner energy,” IISD Indonesia coordinator Lucky Lontoh said.

The report recommends that the government phase out various energy subsidies and push for the greater role of renewable energy. The experts said in the report that developing renewable energy is suitable for Indonesia not only because it is more and more cost competitive but also because the country has plenty of clean energy resources like geothermal energy.

The contribution of clean energy power plants in 2018 stood at around 12 percent, while coal-based electricity stood at more than 50 percent and will likely do so until 2027.

The Energy and Mineral Resources Ministry’s director for new and renewable energy Harris said earlier that Indonesia had a lot of untapped clean energy potential.

“To date, we have only utilized 2 percent of our renewable energy potential, but luckily our geothermal energy has become one of the world’s biggest producers,” he said recently.

Based on the ministry’s recent data, Indonesia has 442 gigawatts (GW) of renewable energy capacity, but only 9.42 GW or 2 percent has been installed.

Furthermore, the fiscal transition toward cleaner energy faces a challenge from the relationship between the government and its people that dictate policy, said energy expert from Jakarta-based Paramadina University Emanuel Bria.

“We have learned that our targets on clean energy, such as in the National Medium Term Development Plan [RJPMN], were always missed. And it is because the market dictates our policies, such that this year coal production exceeded the initial plan,” he said.

The IIDS acknowledged that a radical fiscal transition in the energy sector would be hard to attain, so they believe that the transition is a long-term goal with small steps that could be taken soon, such as increasing the use of abundant natural gas.

“Natural gas resources have a crucial role in the transition [toward cleaner energy]. Indonesia has more gas reserves than oil and the former is also much cleaner,” said the president director of energy firm PT Q Energy South East Asia David Braithwaite, who also the report’s researcher.

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