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Energy Economy ,
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Blockchain gaining ground in Southeast Asia

10 December 2018

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ASEAN

20 years ago, no one could have accurately predicted the huge impact that inventions like the smartphone and the World Wide Web would have on humankind. As technology advances at a breakneck pace, the same could be said about blockchain technology.

It’s a common misconception to conflate blockchain with cryptocurrencies like Bitcoin, Ethereum and Litecoin. While the technology gained prominence because it served as the basis of today’s cryptocurrencies, the technology itself has a myriad of uses outside that function.

Blockchain has been touted to revolutionise global supply chains, 21st century industries and even governance. Its versatility and decentralised nature have gained significant currency in Southeast Asia and many governments within the region have warmed up to the prospect of promoting the integration of this technology into businesses and the public sector.

Leading the curve

Thailand has been most eager to adopt blockchain technology in the region. The country has already enacted laws that govern cryptocurrencies and is planning for a blockchain token for instant securities settlements. Recently, its central bank revealed that it is considering blockchain applications for cross-border payments, supply chain financing, and document authentication.

According to the Governor of the Bank of Thailand, Veerathai Santiprabhob, the use of technologies like blockchain “can help safeguard financial information and reduce the number and magnitude of fraudulent activities.”

Singapore has by far been the most receptive towards blockchain technology especially when it concerns Initial Coin Offerings (ICO). The island nation has become a top destination for ICOs, especially for Chinese companies after China banned ICOs, calling it an illegal fundraising tool. Singapore’s government and private sector have set up incubators and investment funds focussing on cryptocurrencies and other uses of blockchain.

Besides that, the island state has also begun experimenting on a ground-breaking use of blockchain technology in the energy sector. Singapore-based Electrify uses the technology to create a peer-to-peer energy market where electricity can be bought and sold at cheaper rates. The start-up recently raised US$30 million in funding and is looking to penetrate the Singaporean market further when regulations which allow users to select their preferred energy provider come into effect.

Across the causeway, Malaysia houses the New Economy Movement (NEM) Foundation blockchain centre – the largest of its kind in Asia. It will serve to educate the masses on the technology as well as accommodate burgeoning blockchain based start-ups via incubator and accelerator programs.

Malaysia’s central bank has been receptive towards the use of such technology within the banking sector. Among others, it has a fintech sandbox which allows fintech companies – even those without a presence in Malaysia – to participate in it for a testing period of not more than 12 months. On top of that, it is taking necessary steps to police and regulate cryptocurrency use within its borders. In a published report, nine cryptocurrency regulators have been registered with the central bank.

Promising progress

Indonesia’s blockchain sector is eager to take advantage of the opportunities present. Over the past year or so, it has seen an explosion of blockchain related start-ups – initially focussed on cryptocurrency that are now venturing into other areas.

Moving forward, blockchain could potentially revolutionise government, supply chain logistics, consumer transactions and data security in the country. Both the public and private sectors are looking to collaborate to overcome challenges linked to data management. For example, blockchain-driven application Online Pajak helps improve transparency as well as reduce the paperwork burden related to the tax system.

In Vietnam, a fertile start-up ecosystem will likely pave the way for the development of blockchain applications. The government there recently kickstarted preparations for a fintech sandbox which could be utilised by blockchain-related start-ups. Companies like mobile network provider Viettel and intermediary payment services provider, Napas have been experimenting with the technology and have rolled out several pilot projects.

The Philippines has also recognised blockchain as a revolutionary tool and with the inception of the Blockchain Association of the Philippines (BAP) in May this year, more information and guidance would be readily available for anyone interested in using this technology. Led by Justo Ortiz, chairman of the Union Bank – one of the largest banks in the archipelagic nation – BAP hopes to help small and medium enterprises deploy the technology in order to provide them with a competitive edge.

Moreover, in a bid to improve financial inclusion in the state, Union Bank has also picked five rural banks in Mindanao – the second largest island in the Philippines – for a blockchain pilot program that will test real-time, cheaper retail payments. The initiative is set to link rural banks to the country’s main financial network.

Elsewhere, blockchain technology is still in the early stages of integration in Lao PDR, Brunei, Cambodia and Myanmar. Its uses range from providing financial services to e-government initiatives. While nothing palpable has come out of it as yet, such initiatives demonstrate an increasing awareness of blockchain as a fundamental technology for the future.

Electricity/Power Grid ,
Energy Cooperation

Low carbon electricity generation, carbon pricing could reduce emissions in Asean: MIT report

10 December 2018

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ASEAN

KATOWICE, Poland – The ongoing United Nations (UN) climate change talks in Poland have emphasised the need for the world to drastically reduce its emissions to avoid the worst impacts of climate change, with many nations arguing that both developing and developed countries should bear the responsibility of doing so.

But how can rapidly developing nations, such as those in South-east Asia, strike a balance between mitigating climate change and providing ample electricity to its people and growing economies?

A report by five Massachusetts Institute of Technology (MIT) researchers released on Monday (Dec 10) during COP24 suggests two possible solutions:one is for countries to opt for lower-carbon electricity generation and the other is to foster more efficient use of energy by putting a price on carbon emissions, such as through a carbon tax or a cap-and-trade scheme.

COP 24 is the informal name for the UN climate change meeting currently being held in the Polish city of Katowice.

Lower-carbon options include renewable energy sources, such as wind and solar power, or switching from coal to natural gas. Natural gas is considered the cleanest form of fossil fuel, though its combustion still releases heat-trapping greenhouse gases into the atmosphere.

Lead author of the report Sergey Paltsev, a senior research scientist at the MIT Energy Initiative, said: “Producing far less carbon emissions than coal, natural gas could also serve as a backup from intermittent renewables, thereby boosting their penetration in the market.”

Natural gas could be a buffer against the shortcomings of renewable energy sources, which are their intermittency and lack of economically feasible storage solutions, he said at a press conference.

The report, entitled Pathways to Paris: Association of South-east Asian Nations (Asean), analysed gaps between the climate targets and current emission levels of the regional bloc, highlighted key challenges to complying with those targets, and recommended policy and technology solutions to overcome them.

Using computer models, the study found that Asean was still at least 400 megatons of carbon dioxide-equivalent emissions short of its 2030 emissions target, and must reduce emissions by 11 per cent if it were to achieve this.According to the US Environmental Protection Agency’s greenhouse gas equivalencies calculator, this amount is equivalent to taking 85.6 million passenger vehicles off the roads for a year.

Said Dr Paltsev: “The main challenge that Asean countries face in achieving those goals is to lower emissions while expanding power generation to meet the growing energy demand – nearly a doubling of total primary energy consumption from 2015 to 2030 – in their rapidly developing economies.”

Of the two recommended strategies, Dr Paltsev conceded carbon pricing policies often face substantial political resistance.

That is why the report calls for an initial focus on technology-specific policies, such as increasing the portion of the energy mix from renewable sources, and develop markets in clean technology. Improving energy efficiency could also be another way to reduce emissions, he added during the press conference.

Dr Paltsev acknowledged that there was plenty of differences among the member states of Asean, citing Singapore as an example of a nation that had already reaped the low hanging fruits of energy efficiency.

The report also referred to Singapore’s upcoming carbon tax, which will be imposed on large emitters in the Republic from 2019, saying it could “set a useful near-term example for neighbouring Asean countries to study.” Singapore is the first country in South-east Asia to impose a carbon pricing scheme.

The Asean report is one of two analysing emission targets and gaps released by MIT during COP24, with the other looking at the climate targets of Latin American countries.

Added Dr Paltsev: “These regions have not received as much attention as the largest emitting countries by most gap analysis studies, which tend to focus on the globe as a whole.”

Both reports were funded by General Electric, with researchers working with representatives of the Asean Centre for Energy and selected Latin American countries.

Coal

Carbon shift still not a threat to coal-using firms’ credit worthiness

10 December 2018

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Philippines

The drive toward carbon mitigation and away from fossil fuels is expected to have a gradual effect on coal-using companies and is not a significant risk on their credit worthiness, according to Moody’s Investor Service.

However, Moody’s, in its Power Asia 2019 outlook report, said companies that operate coal-fired power plants would see their cash flows weaken as the risk from the carbon shift increased along with the rise of renewable energy and the costs of environmental compliance.

“However, carbon transition risk will not emerge as a material credit risk during the next 12-18 months because of the continued importance of coal power in Asia,” the credit watcher said.

More broadly, Moody’s gives a stable outlook for the Asian power sector as “most power companies’ operating cash flow will support their credit quality.”

Moody’s sees such firms generating steady operating cash flow in the near term due to stable or increasing dispatch volumes, or timely cost pass through.

As for regulations, Moody’s expects changes to happen gradually which, in turn, will support stable cash flows.

In a report released earlier, the London-based Carbon Tracker Initiative said owners of coal power plants in Vietnam, Indonesia and the Philippines risk losing up to about $60 billion in stranded value as government policy, market liberalization and renewable technology advances play out.

Carbon Tracker noted that coal-fired power generation in the Philippines increased by half from 2010 to 2017. Figures were higher for Vietnam (a 72-percent increase) and Indonesia (53 percent).

The not-for-profit think tank said the companies most at risk from stranded assets were Indonesia’s PT PLN Persero with $15 billion, Vietnam’s EVN with $6.1 billion, and San Miguel Corp. with $3.3 billion.

Renewables

House OKs Legarda son’s solar energy supply franchise on final reading

10 December 2018

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Philippines

MANILA, Philippines — The House of Representatives has approved on final reading a bill granting renewable energy distribution franchise to Solar Para Sa Bayan Corp. (SPSB) owned by 25-year-old Leandro Leviste, son of Senator Loren Legarda.

An overwhelming 198 congressmen voted Monday to pass House Bill No. 8179 or an act granting the SPSB a 25-year franchise to “construct, install, establish, operate, and maintain distributable power technologies and mini-grid systems throughout the Philippines to improve access to sustainable energy.”

Seven congressmen voted against the approval of the proposed measure while one lawmaker abstained.

The approval came just four months after bills pushing for the SPSB franchise were filed before the chamber in August.

Several lawmakers have blocked the approval of the proposed measure, which they claimed permits an “unconstitutional super franchise” to SPSB, and violates the Electric Power Industry Reform Act of 2001. /kga

Renewables

1-MW Solar Array to cut carbon emission of TMPC plant in Laguna

10 December 2018

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Philippines

Toyota Motor Philippines Corp. (TMPC) inaugurated its 1-megawatt (MW) Solar Array at its assembly plant in Laguna.

In a statement on Wednesday, the company said this was one of TMP’s major initiatives to minimize its carbon footprint and help mitigate the effects of climate change, based on the global Toyota Environmental Challenge (TEC) 2050.

TMP president Satoru Suzuki said the project was conceptualized in 2016, noting that the inauguration capped the company’s 30th anniversary milestone.

“I am proud to say that, so far, this renewable energy installation is the biggest among all car manufacturers in the Philippines,” he said.

TMP’s 1-MW Solar Array project is among the first batch of projects implemented after the Philippine government signed the Joint Crediting Mechanism (JCM) partnership with the Japanese government last year.

The JCM is one of Japanese government’s ways to effectively address climate change by funding leading low-carbon technologies and systems in developing countries and purchasing the carbon credit from the project.

Under the JCM, the Japanese government will provide a subsidy to TMP, which will cover 30 percent of the total cost of solar panels, inverters and monitoring device.

TMP also partnered with Spectrum, a Manila Electric Co. (Meralco) subsidiary, which provided technical expertise and carried out the solar array installation on a 10,000-square-meter area at the roof of TMP’s Material Handling Operations (MHO) building.

TMP’s 1-MW facility consists of 2,640 pieces of 385Wp photovoltaic (PV) panels and 22 units of 42kW Huawei inverters. TMP did not provide any investment cost.

With the solar array supplying 4 percent of the company’s yearly electricity requirements, TMP said it would be able to reduce its carbon dioxide emissions by 12 kilograms for every vehicle produced or around 790 tons per year.

It is also estimated to generate energy savings of about P10 million yearly.
Toyota is the country’s auto industry leader with a manufacturing plant in Santa Rosa, Laguna. —ROY C. CANIVEL

Renewables

TNB invests RM133 mil in Indian power plant

10 December 2018

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Malaysia

KUALA LUMPUR (Dec 10): Tenaga Nasional Bhd (TNB) is subscribing to a compulsorily convertible debenture (CCD) for 2.256 billion rupees (RM133.17 million) to facilitate its direct investment in the construction of a hydroelectric power plant in India.

The CCD is issued by GMR Bajoli Holi Hydropower Pvt Ltd (GBHH), which is constructing the 180MW run-of-river plant within the Himalaya Range in the State of Himachal Pradesh, said TNB.

“Overall project progress stands at 78% and the plant is expected to commence commercial operations by October 2019,” the utility giant said in a filing with Bursa Malaysia.

“This investment is in line with TNB’s strategy to grow its portfolio of energy assets in India as well as reinforcing its commitment to increase its renewable energy (RE) portfolio,” it added.

TNB said its wholly-owned subsidiary, TNB Topaz Energy Sdn Bhd, signed the agreement with GBHH, GMR Energy Ltd and GMR Infrastructure Ltd today.

GBHH is a majority-owned entity of GMR Energy which is 51.73% owned by GMR Infrastructure. TNB has a 30% stake in GMR Infrastructure.

TNB said GBHH’s CCD has a tenure of 30 years and will be converted into an equity stake of 30% before the end of the tenure.

The group said the subscription was funded through a combination of internally-generated funds and borrowings.

TNB said acquiring a stake in the power plant is in line with TNB’s strategy on RE expansion under the Reimagining Tenaga strategy to position TNB as one of the top global utility players by 2025.

“TNB intends to grow its RE portfolio to an optimal size via greenfield development or acquiring other RE portfolio of similar or complementary technology.

“Once fully operational, the proposed investment will raise TNB’s total international RE portfolio to circa 370MW,” TNB said.

TNB’s shares price fell 14 sen or 1.02% to close at RM13.56, valuing the group at RM77.91 billion.

Bioenergy

Worldwide Holdings allocates RM1b to develop WTE plant in Jeram, Selangor

10 December 2018

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Malaysia

SHAH ALAM: Worldwide Holdings Bhd, a Selangor state government unit, has set aside RM1 billion for two phase development of waste-to-energy (WTE) facilities on a 15 acre of land in Jeram Sanitary Landfill in the state.

The WTE plant will be part of the group’s integrated solid waste management centre (ISWMC), a holistic waste management methodology in waste treatment.

Worldwide Holdings group chief executive officer Datin Paduka Norazlina Zakaria said the WTE currently being developed by the group addresses all aspects of environmental issues through a modern and high-tech treatment facilities following strict compliance with EU standards.

“The technology we are adopting has proven track record using similar waste characteristics in Malaysia.

“The first phase of our WTE plant at Jeram ISWMC will be ready for commercial operation by 2022, while completion of the second phase is targeted by 2024.

“We have plans to open similar facility in other parts of Selangor,” she said at the signing a joint development agreement with Western Power Clean Energy Sdn Bhd (WPCE) here today.

Norazlina said the company is currently managing 5,000 tonne of domestic waste per day at its six sanitary landfills in Selangor.

She said the next potential landfill that could be used to develop as WTE plant is Tanjung Dua Belas landfill in Kuala Langat, which the company is allocating RM500 million for the development.

WPCE is joint venture company of China Western Power Engineering and Construction Co Ltd (CWPEC) and China Western Power International (CWPI).

Norazlina said the agreement with WPCE it to build the RM500 million first phase WTE facility in Jeram, Selangor.

The plan to build the WTE facility — to convert solid waste to heat, steam and electricity — was first announced by Selangor Mentri Besar Amirudin Shari during the tabling of the state’s 2019 Budget in November.

With waste capacity of 1,200 tonne per day, the first phase of the facility will produce between 20 to 24 megawatt of green energy, enough to power 25,000 household within the vicinity of the plant.

Set to be the largest and most modern WTE facility in Malaysia, it is expected to reduce land use for landfill while supporting the government’s aspiration of increasing renewable energy generation to 20 per cent by year 2025.

The agreement was signed by Worldwide Holdings chairman Datuk Nor Azmie Diron, Norazlina, CWPEC managing director and vice president Wu Bin, and CWPI executive director Jiang Shuhong.

CWPEC and CWPI have over 30 years pf expertise in the fields of new energy and environmental protection industry, design and manufacturing of clean power plants.

Renewables

Nexif hits go on final 86MW of Lincoln Gap Wind Farm, with close of CEFC debt deal

10 December 2018

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Singapore

South Australia’s 212MW Lincoln Gap Wind Farm – which is set to host the state’s third big battery, and possibly solar, too – is moving ahead with stage two of construction, adding the final 24 turbines and 86MW of generating capacity to the project.

Singapore-based project developer Nexif Energy said this week that the second stage of the $480 million wind farm near Port Augusta had been given the green light, after the close of a $160 million debt deal with the Clean Energy Finance Corporation and infrastructure investment company Westbourne Capital.

Stage two will add to the 126MW currently under construction by wind turbine manufacturer Senvion, and will support more than 110 construction jobs for an additional 18 months at the site.

Once completed – it is expected to be operational by mid-2019 – the wind farm will have 59 Senvion 3.6M140 turbines and a total generating capacity of over 212 MW, producing enough energy to power 155,000 households in South Australia.

As we reported last month, plans to add storage to Lincoln Gap are also underway, with Siemens/AES joint venture Fluence signed up to deliver a 10MW/10MWh battery based energy storage system, targeted for completion in May 2019.

At the time, Nexif said it had partnered with Fluence after a “rigorous evaluation process,” to deliver an energy storage system to “reliably integrate” the wind farm’s output to the National Electricity Market.

All up, the project is being noted as one of the first hybrid renewable and storage projects to secure non-subsidised financing.

“This is a continuation of our investment in South Australia where we are incredibly excited to be investing, and to be at the forefront with the first unsubsidised battery storage project for the state,’’ said Nexif co-chief executive Matthew Bartley.

“There remains potential to further expand Lincoln Gap and we are now working on feasibility studies to determine how large that could be, as well as trying to bring technologies together to add solar to the wind energy and battery storage at Lincoln Gap to create a genuine hybrid energy hub.”

Nexif has also secured an off-take deal for the output of Lincoln Gap, via two long-term contracts with retailer ERM Power, that were locked in in April 2017, just a month after the company bought the wind farm from OneWind Australia.

“Through this path-breaking integration of renewable wind power generation with battery storage system, Nexif Energy and its financiers have a committed investment of over $480 million, making it among the largest investors in South Australia.” said Surender Singh, also a co-chief executive.

“We also look forward to working closely with construction partners Senvion and Fluence for on time completion.”

David Hardy, the executive director and CSO of Senvion, said his company was pleased to have secured the official go-ahead to deliver Lincoln Gap’s second stage.

“This is a great affirmation of the performance of our local team and we are very pleased about the ongoing cooperation with Nexif Energy,” he said.

“We are also committed to continue to work closely with the local community to provide opportunities for businesses and individuals to benefit from this important project.”

For Fluence, the contract to supply battery storage for Lincoln Gap follows up on its success with the recent installation and commissioning of the Ballarat Energy Storage System (BESS).

As noted above, Lincoln Gap will be the third big battery in South Australia, after the so-called Tesla big battery at the Hornsdale wind farm, and the Dalrymple North battery at the Wattle Point wind farm.

Large-scale battery storage is also planned for the Snowtown wind farm, along with a co-located solar farm, and for the Whyalla steelworks.

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