ISSUE 60 | DISPLAY TO 31 DEC 2013 | www.asian-power.com | A Charlton Media Group publication
US$360P.A.
KOSPO GOES global CEO Lee Sang Ho aims TO BECOME a global top 10 power company by 2020
MICA(P) 248/07/2011
Country Report Indonesia scrambles to explore renewables
opinion Opportunities in China’s clean energy developments
FEATURE POWER-GEN Asia 2013 Special Report
OPINION ASEAN deals with evolving energy landscape
PAge 14
PAge 32
PAGE 26
PAge 34
2 ASIAN POWER
FROM THE EDITOR Now on its ninth year, the Asian Power Awards 2013 recognized the best initiatives and projects in Asia. The ‘Oscars’ of the power industry held in Bangkok, Thailand was graced by nearly 100 key executives from exceptional companies in the industry who relentlessly strive for great quality and excellence in their respective categories.
Publisher & EDITOR-IN-CHIEF Tim Charlton ASSOCIATE PUBLISHER Laarni Salazar-Navida Assistant Editor Jason Oliver Art Director Jonn Martin Herman Editorial Assistant Queenie Chan Editorial Assistant Alex Wong ADVERTISING CONTACTS Laarni Salazar-Navida lanie@charltonmediamail.com
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In this issue we also include a special feature about what the recently-held POWER-GEN Asia in Bangkok where a record 7,800 attendees from over 70 countries converged. Dr Twarath Sutabutr, Thailand’s Deputy Director-General, Department of Alternative Energy Development and Efficiency, called for action to the country’s perennial problem of over dependence on imported oil. Thailand, he said, is currently importing 85% of its oil consumption and 25% of its gas consumption but the figures may go up to 95%-95% levels by 2030 if necessary actions are not taken. We also look into Indonesia’s challenges and roadmap to meet additional 7 GW per year, just to keep pace with the year-on-year energy demand. Already, as at December 2012, government data show that Indonesia had a total installed capacity of 32,951 MW but peak demand is expected to quintuple in 2030 to 168GW. Local experts suggest the use of renewable energy, especially biomass. But, does Indonesia have sufficient investments? More importantly, does it have the ‘political will’ to do so? The Asian Power team also spoke with Korean Southern Power (KOSPO) CEO Sang Ho Lee and asked how they respond to several government policies promoting the use of renewable energy as the country intends to reduce reliance on nuclear energy amid growing public opposition since the Fukushima disaster and a local scandal over faked safety documents. He also shared with us their strategic directives to achieve their ambitious vision to become a“Global Top 10 Power Company” by 2020. Finally, check out a series of reports pertaining to several developments in the solar power market. It is indeed high time for the solar power industry to shine as countries in Asia steer away from nuclear energy following the Fukushima disaster in 2011. Read about Japan welcoming construction of more solar parks and opening its largest solar power plant, China introducing tax breaks for solar projects, Thailand competing with Turkey to lead the world’s solar PV market, and more. Enjoy the issue!
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Tim Charlton
*If you’re reading the small print you may be missing the big picture
ASIAN POWER 3
CONTENTS
INTERVIEW KOSPO’S CEO REVEALS 18 CEO PLANS OF GOING GLOBAL
14
COUNTRY REPORT Power-hungry Indonesia struggles to play catch-up with rocketing energy demand
FIRST
26 FEATURE POWER-GEN Asia 2013: Striving to secure a stable energy future for Asia
OPINION
08 JAPAN eyes 20% renewables by 2020
32 JOHN GOSS: Increasing business
08 China’s VAT rebates on solar power kicks off
opportunities in China’s clean energy developments
09 Thai solar market vies with Turkey
34 How ASEAN countries deal with
09 The Chartist: WHY FOSSIL FUEL CAN’T BE
evolving energy landscape
KNOCKED OFF TOP SPOT
10 AsiaPac’s booming hydropower market 10 Japan unveils largest solar power plant
Published Bi-monthly on the Second week of the Month by Charlton Media Group #06-09 E, Maxwell House 20 Maxwell Road
4 ASIAN POWER
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PROJECT
POWER UTILITY
South Korean biomass-fueled power plant moves ahead with expansion The firm is a JV between Oman Oil Company, which holds 30%, and South Korean firm GS Holdings that owns the remaining 70%. Phase 1 of the plant has a capacity of 538 MW and was commissioned in 2001 while Phase 2 (550 MW capacity) was commissioned in 2008. Phase 3 has already begun.
POWER UTILITY
China’s power generation surged 10.5% in October Thermal power generation up 16.1%. China’s power generation data to provide bottom up data confirmation that aggregate economic activity has maintained growth on a YoY basis starting from the March 2013 low. Hydro power generation was down 6.3% YoY due to seasonal factors.
Singapore’s largest-ever solar installation to be completed this year REC to supply the solar panels. The two projects are the latest to emerge from the strong and productive alliance between REC and Phoenix Solar. “We are delighted to be part of these new projects, says Luc Graré, Senior Vice President Solar Sales and Marketing, REC.
FROM THE BLOG Asia amidst nuclear power development craze BY ALEXANDER MOSKALENKO Yes, the consequences of accidents can be catastrophic, but so far the largest – let it be so - remains Chernobyl. The accident at the nuclear power plant at “Fukushima -1” resulted, of course, in a real tragedy, but its consequences cannot be put on par with Chernobyl. It was caused, first of all, by illogical administrative and engineering solutions in the design of the station.
6 ASIAN POWER
What you must know about Japan’s Smart Mansion Assessment System for apartment buildings BY JERROLD WANG In August 2013, Japan’s Ministry of Economy, Trade and industry (METI) announced the launch of a Smart Mansion Assessment System for multiunit residential (MURB) buildings. “Smart Mansions” are apartment buildings that have an integrated building energy management system (BEMS) capable of “operating the building as a whole.”
What carbon capture and storage technology can do BY ALICE GIBSON Much of the world’s future energy growth, especially in the power sector, will be in Asia. CCS is not just a low–emissions technology applicable to power stations. It is the only technology that can achieve large–scale emissions reductions from industry, where in some cases CO2 is produced or separated as an inherent part of the process as expensive as in the power industry.
How a strong regulatory push can jumpstart Indonesia’s biomass sector BY HARSH THACKER The electricity demand is expected to grow in the world’s 16th largest economy and the fourth most populated country, Indonesia at an average of 10.1% per annum till 2031. In December 2012, Indonesia had a total installed capacity of 32,951 MW. As mentioned in the Draft General Plan of Electricity (RUKN) 2012-2031 1, peak load power demand is expected to be 168 GW in 2030.
ASIAN POWER 7
FIRST as a showcase. XYG’s solar glass has seen an improving margin and selling price since January 2012. The group announced the spin-off arrangement its subsidiary, Xinyi Solar, by way of introduction. The proposed spin-off will be conducted by distribution of around 70% of the total number of shares of Xinyi Solar. There will be no separate offering of Xinyi Solar shares. “We believe newsflow of Xinyi Glass will maintain warm in the near-term. We are waiting for further listing prospectus and detailed listing arrangement for the spin-off. We remain positive on Xinyi Glass given its leading position and recovery of glass industry,” said Po.
JAPAN eyes 20% renewables by 2020
The solar industry in Japan is set to shine brightly while nuclear power remains on the ropes. juwi Shizen Energy has realized its third solar project in Japan. In Ozu on Kyushu island the joint venture between the German juwi group and the Japanese company Shizen Energy has recently commissioned a free field solar park. The utility scale solar power plant has an installed capacity of 1.1 megawatt (MW). Every year the 4,480 solar modules feed 1,375,000 kilowatt hours (kWh) of climate-friendly electricity into the local grid. This equals the electricity consumption of more than 380 local households. For juwi Shizen Energy it is the third solar project on Kyushu island. The company’s first project, a solar power plant with an installed capacity of one MW, already produces clean electricity for 300 local households. juwi Shizen Energy also constructed utility scale roof top photovoltaic (PV) systems. In Kumamoto the company recently connected the rooftop PV plant “Bear 2” to the grid. The system consists of 4,088 solar modules and the company claims that it was erected within only four weeks. It has a capacity of one MW and produces one million kilowatt hours (kWh) of clean energy per year; enough to supply 300 local households. The PV plant was built for the same investor who previously financed juwi Shizen’s first solar project. “Japan is a fantastic market for solar energy and our Japanese team has built great trust with local authorities, land owners and investors”, says Amiram Roth-Deblon, juwi Regional Director Asia Pacific and Representative Director of juwi Shizen Energy. All eyes on renewable energy Japan is currently dramatically expanding its renewable energy sector as it aims for 20% renewables in 2020. Solar, wind, biomass and geothermal energy still account for just 1% of Japan’s power capacity. Therefore, the Land of the Rising Sun has introduced the world’s highest feedin tariff for solar power. According to experts, Japan is now one of only five countries that have achieved 10 gigawatts of cumulative solar photovoltaic capacity. The country’s PV market in Japan broke the 10 GW barrier in August of this year and reached 10.5 GW at the end of August. Meanwhile, JAG Energy Group, a unit of the Japan Asia Group have been contracted to build a 13MW, 14.3 hectare solar park in Kanagawa as part of Kanagawa prefecture’s Smart Energy Initiative. A 19.6MW solar power project SoftBank Izumiotsu Solar Park is also being built by SB Energy in Osaka, Japan. The project, set to be the biggest in Osaka, is a joint venture between Kyocera Group, subsidiary Kyocera Solar and Mitsui & Co. and is being developed on nearly 25 hectares of prefectural government land. Approximately 80,000 Kyocera solar modules will be used, which is expected to generate around 20,680 MWh of electricity each year . 8 ASIAN POWER
China is home to the world’s largest solar office building
China’s VAT rebates on solar power kicks off
T
he continuous positive news flow about the China solar industry has boosted sentiment on solar firms listed in the US. According to UOB Kay Hian, some China solar power firms surged close to 10% after a 50% value added tax rebate to solar power plants effective from Oct 2013 was announced in late September. The shares of largest global producer, Yingle Solar (YGE), rose 11%. Recall on 30 Aug 13, NDRC announced a new distributive PV subsidy scheme, which subsidizes projects based on electricity generated at a rate of RMB0.42/kWh. The new policies again focus on the demand side which according to UOB Kay Hian will continue to improve China’s demand outlook. “Among key markets in the globe, China is one of the key drivers. Total installation in China will rise to 10GW in 2014, and 12GW in 2015 from 5GW in 2012 based on our estimates,” said Mark Po, analyst at UOB Kay Hian. VAT rebate beneficiary Po noted that Xinyi Glass (XYG) is one of the beneficiaries of the VAT rebate for several developments. XYG has secured a total 78MW of solar power generation projects in its production base in Tianjin, Wuhu, Dongguan and Jiangmen. The Wuhu plant has installed 20MW rooftop solar projects
Total installation in China will rise to 10GW in 2014, and 12GW in 2015 from 5GW in 2012.
The most profitable segment JP Morgan analyst Leon Chik believes that solar covering glass has been one of the most stable and profitable segments of the solar panel value chain. XYG, he adds has been profitable in solar glass from 2010 to 1H13. “The competitors are not so fortunate and many peers that are not glassmaking specialists closed down facilities in 2012 and it would be difficult to restart due to high restarting costs, government constraints on adding capacity to solar production as well as difficulties in obtaining qualifications with module makers after abandoning these same customers just a year ago,” said Chik. According to Chik, there are large barriers to entry. First is a long lead time to add solar glass production lines: 1.5 years for construction and up to 2 years to qualify with solar module makers. Second, there are high quality requirements and difficulty in qualification (cover class is about 4-5% of the total module cost but is the key component that can break and ruin the module that is designed to last 20 years).
Solar demand forecast by country
Source: National Capital Group
FIRST Turkey’s rooftop market is predicted to pick up speed in 2014 to reach 300 MW.
Thai and Turkey have the potential to install nearly 3GW of PV systems
Thai solar market vies with Turkey
T
hailand is in a neck-and-neck battle with Turkey to become the world’s largest solar photovoltaic (PV) market. According to IHS, the next big opportunity for growth in the global solar business lies in small, emerging markets where PV installations are forecast to rise at about triple the global average from 2012 through 2017. Annual installations in these emerging countries, IHS says, are expected to increase to 10.9 gigawatts (GW) in 2017, expanding at a compound annual growth rate (CAGR) of 38% from 2.2 GW in 2012.
In contrast, the overall global market will expand at a CAGR of only 13%. The emerging markets will account for 19% of global installations in 2017, up from just 7 percent in 2012. World’s largest solar markets Of the emerging countries analyzed, IHS said that Thailand and Turkey are expected to become the largest markets in the coming years. Both countries have the potential to install a cumulative total of nearly 3 GW of PV systems during the period. “The Thai market has already taken off because of its adder scheme, under
which the government pays feed-in premiums to solar power producers. In contrast, the Turkish market is still taxiing toward the growth runway. In June the country experienced an avalanche of applications that far exceeded the 600 megawatts (MW) that had been planned by the government. This has delayed the licensing procedure and pushed back installations until late 2014 and 2015.” IHS, however, notes that Turkey’s rooftop market is predicted to pick up speed in 2014 to reach 300 MW. By 2017, its annual PV demand, it adds, will climb to 1 GW. “Across the world, new markets for solar PV are emerging, propelled by government incentives, including tenders for large-scale contracts, feed-in-tariff schemes and self-consumption support,” said Josefin Berg, senior PV analyst at IHS. “Although these markets sometimes have huge hurdles—like limited financing, regulatory uncertainty and opaque local regulatory conditions— companies throughout the solar supply chain can benefit from targeting these fast-growing emerging countries.”
Cumulative solarphotovoltaic installations in emerging countries for 2013 through 2017
Source: IHS, September 2013
The Chartist: MOST OF THE WORLD’S ENERGY POOR ARE IN ASIA Asia has the unfortunate distinction of harboring most of the world’s energy poor, according to Asian Development Bank. Nearly half of the world’s people without electricity live in Asia, as do the majority of people who rely ontraditional fuels such as wood, charcoal, and dung. In 2010, 2.8 billion Asians, or 79% of the world population, relied on such traditional fuels, which provide low-quality energy while often destroying natural ecosystems. ADB projections show every Asian subregion having to spend less of its income on electricity in 2035 than in 2012. Electricity expenditure as a fraction of GDP per capita will be lower in 2035 than it was in 2012 for all subregions because they all lie below the solid line that indicatesequal shares of income spent on electricity in both years. “While this analysis doesnot directly indicate that all energy sources will be more affordable or accessible, it does show a key component of energy becoming more affordable for the poor. “
Asian proportion of those in energy poverty
Source: IEA 2012a; Sovacool 2012
Projected energy affordability in Asia
Source: Fueyo, Gomez and Dopazo, forthcoming
ASIAN POWER 9
FIRST
APAC’s hydro market booms
IPP WATCH
Japan unveils largest solar power plant
T
he world’s hydropower capacity is expected to grow by more than 30% in seven years’ time and Asia is contributing the largest share. The global cumulative hydropower installed capacity is expected to increase from 1,065 Gigawatts (GW) in 2012 to 1,407 GW in 2020, at a Compound Annual Growth Rate (CAGR) of 3.5%, with investments reaching $75 billion in the same period, forecasts research and consulting firm GlobalData. According to GlobalData, the total for 2020 is expected to be comprised of 1,052 GW of large hydro capacity, 215 GW of pumped storage and 140 GW of small hydropower capacities. During the forecast period, the Asia-Pacific region is expected to add the highest amount of hydropower capacity, with approximately 208 GW. Hydropower increase China has large-scale hydropower capacity addition plans and is likely to contribute 147.3 GW to its power generation portfolio by 2020. India, Indonesia and Vietnam are planning to add around 23.2 GW, 9.4 GW and 5.8 GW, respectively. Europe and North America, which have mature hydropower markets, will also experience growth in installations with the addition of 271 GW and 197 GW, respectively.
A non-polluting source of energy
The increase in hydropower across these regions is expected to be driven primarily by the expansion of pumped storage capacity and the modernization and refurbishment of existing plants. Swati Singh, GlobalData’s Analyst covering Power, says: “Although fossil fuels dominate electricity generation across the world, more than 60 countries use hydropower to meet more than half of their electricity needs. “The technology is the most popular non-polluting source of electricity generation for various reasons, including its ability to respond to changing electricity demand, water management and flood control.” According to GlobalData, the hydropower market is a lucrative sector for investment, with a less risky portfolio than other renewables. Aditionally, various countries have announced expansion targets and supportive programs.
Asia-Pacific region is expected to add the highest amount of hydropower capacity, with approximately 208 GW.
Two years after the Fukushima tragedy, Japanese firm Kyocera Corp launched a 70MW solar power plant in Kagoshima. The project, with total investments amounting to US$28m, went online on November. It is being operated by a special purpose company, Kagoshima Mega Solar Power Corp, established by Kyocera and six other companies in July 2012. Under a financing plan devised by Mizuho Corporate Bank, the new company was tasked to develop and operate the plant on land owned by IHI Corp. -- with the power generated to be purchased by Kyushu Electric Power Co., Inc. based on the FIT program. The Kyocera Group was responsible for the supply of solar modules as well as part of the construction, and will also undertake maintenance of the system with Kyudenko Corp. A tour facility, which is open to the public, has been built adjacent to the 70MW plant.
EGCO gears up building of Khanom Power Plant
Chinese energy producers operating in water stress areas face operational risks Chinese coal-fired power plants already operate under significant water stress, and could face increasing water risks as energy production moves into the water-stressed northern and western provinces, warns World Research Institute (WRI). In 2012, nearly 70 percent of China’s coal-fired power generation capacity and the vast majority of the country’s coal mines are already located in areas facing medium to extremely high baseline water stress. Furthermore, more than 60 percent of China’s planned coal-fired power plants are slated for development in the six northern provinces that only account for only 5 percent of China’s total water resources. Consequently, WRI notes that coal companies will likely face increasing regulatory uncertainty as the government updates its laws to protect at-risk supplies. “Operators concerned about access to permits and potential plant closures need to prioritize water in their corporate risk mitigation strategies. Shenhua Group, for example, recently revamped the wastewater treatment system for its coal-to-liquids plants in Ordos, Inner Mongolia, to improve water use efficiency.” Shenhua was responding to severe public concern and criticism for over exploiting water resources in already waterscarce regions. 10 ASIAN POWER
Khanom Electricity Generating Co., a subsidiary of Electricity Generating Public Co. (EGCO) held a cornerstone laying ceremony of the new 930-MW Khanom Power Plant Project (Unit 4) on 1 October at Khanom District, Nakorn Sri Thammarat Province of Thailand. The commercial operation date of the project is scheduled on 19 June 2016 to replace the existing Khanom power plant is in accordance with the Thailand Power Development Plan or the PDP2010: Revision 3. The Khanom plant is Thailand’s first independent power project (IPP). It has been operating for 17 years under a 20-year concession granted by the Energy Ministry. The project is a cogeneration power plant which will be operated with natural gas as a primary fuel to generate electricity. It has entered into the PPA with EGAT for 25 years. EGCO is spending about 17-18 billion baht ($536-568 million) to build the new plant as it expects it to contribute annual profits of at least 500 million baht.
5,000 days
Trouble-free operations 2007(3,000days)
U.S.
2010(4,000days)
Libya
Lebanon Iraqi
Japan
Pakistan Thailand Taiwan UAE Vietnam Indonesia
2004(2,000days)
What is the limit to KOMIPO?
2013(5,000days)
2001(1,000days)
Going far past 5,000 days of trouble-free operations The third unit of Korea Midland Power’s thermal power plant in Boryeong achieved a monumental record when it reached 5,000 days of trouble-free operations as of September 1, 2013. This can be attributed to the company’s relentless efforts to ensure only the most advanced technologies are employed at its power plant facilities. As proven through its overseas building, owning and operating (BOO) projects—coal-fired power plants in Cirebon and Tanjung Jati, Indonesia, a hydro power plant in Pakistan and the Siam Solar PV Plant in Thailand—Korea Midland Power’s technology and experience in the construction and operation of power plants will take the company to a new level on its way to becoming one of the leading power plant operators in the world. This historic feat of reaching 5,000 days of trouble-free operations is only the starting point for even greater accomplishments in the future.
Major Overseas Projects Build, Own and Operate(BOO) - Cirebon Thermal Power Plant in Indonesia(Commercial operation on July 2012) - Siam Solar PV Plant in Thailand(Commercial operation on March 2013) - Wampu Hydro Power Plant in Indonesia(Under construction) - Semanka Hydro Power Plant in Indonesia(Under development) - Boulder Solar PV Plant in U.S.(Under development) - Lower Spat Gah Hydro Power Plant in Pakistan(under development) - Minami-Awaji PV Plant in Japan(Under development)
Merger & Aquisition(M&A) - Navanakorn Combined-Cycle Thermal Power Plant in Thailand(Commercial operation on August 2013)
Operation & Maintenance(O&M) - Tanjung Jati Thermal Power Plant in Indonesia(Commercial operation on November 2011) - Lebanon Combined-Cycle Thermal Power Plant(February 2006~February 2011)
co-published Corporate profile
GE’s Advanced Gas Path to deliver more power to growing Asia and beyond
GE’s 9F-3 and 9E Advanced Gas Path Solutions deliver industry-leading upgrade performance. The upgrade technology marks first of its kind available in both gas turbine class sizes.
G
E recently unveiled the expansion of its high-performance Advanced Gas Path (AGP) portfolio to its 9F-3 and 9E gas turbine customers operating in Asian energy markets and around the globe. This technology, which is proven to deliver industry-leading upgrade performance, marks the first of its kind available for comparably sized gas turbine assets in both classes. “GE’s AGP technology exemplifies the levels of flexibility and performance our customers demand to remain competitive in both growing and mature energy markets around the world,” said Fintan Tuffy, general manager of Fleet Analytics & Performance Management for GE’s Power Generation Services business. “With a number of Asian markets ranking at the top of expected energy demand growth regions over the next decade, this solution can play an integral role in helping our customers meet these future needs by unlocking the full potential of their existing assets.” With more than 120 AGP systems sold and 37 upgrades already in operation on GE 7F-3 gas turbines around the globe, this proven solution can now unleash higher performance for GE customers with installed assets. ENKA, which generates more than 13 percent
12 ASIAN POWER
of electricity for Turkey, has placed the first order for GE’s 9F-3 AGP technology for 10 of its gas turbines at the Gebze, Adapazar and İzmir power plants. The upgrades are expected to deliver a total of up to approximately 150 additional megawatts (MW) of power, enough to generate electricity for more than 200,000 additional households in Turkey. ENKA also expects to lower its emissions footprint with the installation of the AGP solution in tandem with GE’s Dry Low NOx (DLN) 2.6+ combustion system upgrade. Installation of the technologies is scheduled to begin in late 2015, with a targeted completion date of 2018 for all 10 gas turbine upgrades. “The performance improvements this solution delivers to our plants will allow us to maximize the value of the energy we provide through power purchase agreements,” said ENKA O&M Chairman Mr. Tahsin Kösem. “This collaborative
“GE’s AGP technology exemplifies the levels of flexibility and performance our customers demand to remain competitive.”
effort with GE will also put our sites in a better position with more available power and flexibility for electricity markets with demand increases being forecasted across Turkey. Additionally, this project increases ENKA’s contribution to help meet the Turkey 2023 Vision, which contains goals of increasing efficiency and lowering the country’s carbon footprint.” AGP technology advancements feature hardware design and materials improvements to the components of GE’s gas turbine hot gas path system. These innovations are coupled with GE’s OpFlex* advanced controls software to expand gas turbine performance and enable GE customers to operate their power plants more dynamically. The AGP’s hardware and software technologies were developed based on data insights gained through analysis of GE’s more than 100 million hours of operating data on its global gas turbine fleet of more than 1,600 monitored units. Asian power generation entities are expected to experience the world’s highest regional demand growth for power over the next several decades. Across Asia, average energy demand growth is estimated at 3.7 percent annually through 2030, with Southeast Asian demand potentially expanding nearly 90 percent over the same period of time. GE’s AGP technology enables customers with existing gas turbines in rapidly growing economies in Asia and beyond to expand their power capacities without investing in new infrastructure or to complement new power plant construction. The AGP solution is offered through GE’s FlexEfficiency* Advantage for F-Class gas turbine and LifeMax* Advantage for B/E-Class gas turbine platforms. These portfolios deliver hardware- and software-blended solutions that enable GE customers to unleash the full performance and value of their existing assets. Only GE customers are empowered to harness these upgrades, in tandem with data-driven insights from the world’s largest gas turbine fleet, to gain the advantages they need for success, as they define it. The FlexEfficiency Advantage and LifeMax Advantage portfolios support GE’s Predictivity™ solutions platform. Predictivity solutions tap into GE’s networked fleet of gas turbines, along with data analytics capabilities and our people at work to help customers make better business decisions and lower their operational risk.
COUNTRY REPORT: INDONESIA
Indonesia plans to supply electricity to 90% of its population by 2020
Power-hungry Indonesia struggles to play catch-up with rocketing energy demand Indonesia’s energy demand is set to outpace new supply, leaving the nation scrambling to explore renewables and loosen up regulations.
A
ccording to Harsh Thacker, senior research analyst at Frost & Sullivan, electricity demand is expected to grow in Indonesia, the world’s 16th largest economy and the fourth most populated country, at an average rate of 10.1% per annum till 2031. Already, as at December 2012, government data show that Indonesia had a total installed capacity of 32,951 MW. As mentioned in the Draft General Plan of Electricity (RUKN) 2012-2031, peak load power demand is expected to be 168 GW in 2030, which is 5.09 times the total installed capacity in December 2012. Further, as per the national electrification policy, the government of Indonesia is planning to supply electricity to 90% of its population by 2020 compared to the current electrification rate of only 75.8%. Meanwhile, it is estimated by the state utility, Perushahaan Listrik Negara (PLN), that every one percent growth of gross domestic product could require electricity growth between 1.2 percent and 1.5 per cent. Currently, Indonesia has a total power generation of more than 30 gigawatts (GW). With current economic growth rates, the country would need at least an additional 7 GW per year, just to keep pace with year-on-year (YoY) demand. Jim
14 ASIAN POWER
“SIAS believes that the main reason for the low electrical capacity is due to the government’s subsidy, which amounts to an estimated US$12bn in 2013.”
Schnieders, president-director of Black & Veatch’s energy business in Indonesia, notes that this need for investment does not factor in the current grid catch-up requirements, or the complication of distributing energy across 6,000 inhabited islands where local residents and industry are without reliable power. Thus, there is an urgent need for new solutions to solve these growing, complex challenges. Shamim Razavi, counsel at Norton Rose Fulbright Australia notes that at some point, the divergence between supply and demand will become a barrier to the development of the country’s potential. It is with this in mind that the government seeks to encourage investment in the power generation sector across the archipelago. According to SIAS Research, Indonesia’s GDP expanded more than 6% YoY between 2007 and 2012, except 2009. On the whole, Indonesia’s economy is growing steadily. However, more electricity is required to power this growth. Electricity output As of end 2011, SIAS report that the archipelago has about 44GW of installed capacity and generated about 193 TWh or 193m MWh. This represented a capacity factor of merely 62%‐ which according to
SIAS probably came about due to some of the facilities being outdated or poorly maintained. “Demand for electricity probably surpassed supply by about 15‐25%, leading to frequent blackouts in the country. Power outage is one of the main factors keeping investors wary about investing in Indonesia.” According to SIAS, approximately 86% of current electricity generated comes from conventional thermal sources, 9% from hydroelectric and 5% from geothermal. Lack of supply SIAS believes that the main reason for the low electrical capacity is due to the government’s subsidy, which amounts to an estimated US$12bn in 2013 and is affecting the profitability of private operators. An end to the subsidy era is expected with the Indonesian government recently announcing it is looking to reduce its fuel and electricity subsidy, which combined cost US$32bn or 20% of its 2013 budget. SIAS however expects the process to be gradual as any substantial move may result in severe public disorder. SIAS also cites other issues such as slow land acquisition speed, poor electricity distribution and transmission system, country risk and poor accessibility to
COUNTRY REPORT: Indonesia funding, that discourage investors from entering the market. According to SIAS, the strong economic growth, burgeoning middle‐class and growing electrification rate (% of people with access to electricity) are pushing electricity demand by about 9+% annually. for the next five years. About 4GW additional capacity is required annually costing about US$80bn. “Current electrification rate is only 70% vs the authority’s target of 90% by 2020. In terms of energy usage per capita, Indonesia lags behind Malaysia and Singapore by 6.4X and 13X respectively.”
work has traditionally been slow. Delays “By 2025, in construction can reduce the project’s Thacker notes profitability. “In the past, many plants that Indonesia have failed due to the selection of inapmight have to propriate river sites as hydropower plants, import over reflecting execution risk. The fluctuating 70% of its Rupiah, country risk and natural disasters national oil reare some other concerns.” quirement due Solar cell solution, meanwhile, is a mato the dwinturing RE technology but requires high dling oil procapital expenditure of up to US$5,000 duction in the per kW installed capacity, said ICCC. country and the Some applications, it added, need to be rising electricity accompanied by energy storage capacity demand.” to allow a level power output. “This high cost makes solar cell development not Renewable energy target viable in general conditions.” By 2025, Thacker notes that IndoneExperts believe Indonesia has the sia might have to import over 70% of potential to develop biomass energy but it its national oil requirement due to the remains a less preferred option. Thacker dwindling oil production in the country says that amongst the various RE sources, and the rising electricity demand. Hence, Indonesia is a hotbed for biomass power the government is planning to replace the with a potential to generate 49,500 MW consumption of oil for power generation of electricity, but currently, has only realwith increased usage of coal and renewized a capacity of 1,600 MW. To achieve able energy (RE) sources. the above RE target, the country needs Acknowledging the looming threat of to install around 33,000 MW of biomass electricity scarcity in the coming years, based power plants by 2025, or 2,385 MW the ministry of energy has already taken of installation annually till 2025, he adds. steps to increase the nation’s dependency According to Thacker, biomass is the on RE sources. The government has set only renewable source of power which an ambitious target to generate 17% of can support conventional fuels for the energy from renewable sources by 2025. base-load generation as these plants The costs of adapting to renewable can run with a high availability rate of energy, however, remain a major concern. 90%. Effective utilization of indigenous According to the Indonesian Climate biomass feedstock and coal fired power Change Center (ICCC), hydropower is plants, will enable the country to substanthe most developed RE type, and its tech- tially reduce its imports on oil. nology development has made its generaBiomass energy can be in the form of tion cost cheaper than coal fired power bio-gas, bio-liquid and bio-solid fuels. plants in some conditions. Depending Some scientists even foresee that bio-gas on the infrastructure and civil works, and bio-liquid can significantly replace hydropower capital expenditure, however, varies between US$2,000 – US$3,000 per kW installed capacity while its energy costs practically nothing, said ICCC. SIAS Research is particularly optimistic about hydroelectric power amidst plenty of available sites but cautions that issues abound within the sector. It notes that PLN had said in 2012 that they have identified 96 locations in Indonesia that are suitable for hydropower plants with a total capacity of 12,800MW. An estimated 60% will be developed by PLN while the rest will be offered to independent power producers. According to SIAS, the capital cost for building a small hydropower plant can be around US$2m per MW and operating cost may be around 0.8 US cents/kWh. Assuming a selling price of 8 US cents/kWh, EBITDA margin can be close to 90%. Construction it adds, may take about 18‐24 months while financing can be as high as 80% of the project value. According to SIAS, apart from the high cost in building hydropower plants, Costs of adapting to renewables remain a major concern the speed of land acquisition and paper
fossil fuels in power and transportation. As a tropical country, ICCC notes that Indonesia has the most abundant energy for photosynthesis on the same surface area. At the moment however, ICCC says that policy makers in Indonesia are still thinking in the direction of Waste to Energy instead of Crop to Energy. This judgment, it added, has made biomass become a less important priority and thus still not properly employed. “In addition, Indonesia still applies subsidy on petrol (from current market price at approximately IDR 9,000/liter to sell at IDR 4,500/ liter) while bio-ethanol can now be produced competitively at IDR 7,500/liter. This has obviously made bio-ethanol less preferred.” According to ICCC, Indonesia can take a lesson from Brazil, which has been able to use biomass energy up to 18% of its transportation fuel from bio-ethanol. “Technically, marketable high-end petrol fuel can only reach compressibility ratio (CR) of 12 while bio-ethanol can reach CR of 18. The higher CR, the better engine efficiency can be reached. Then, petrol and bio-ethanol mixture can reach CR > 12, making it possible for efficiency increase, i.e:. lower fuel consumption as well as emission.” Biomass projects Experts believe that with improved engine efficiency and the development of special energy plants, biomass can be a solution to significantly replace fossil fuel in Indonesia. Taking a cue from its Southeast Asian counterparts where regulations, especially feed-in tariff (FiT) policy, have played a major role in RE capacity building
ASIAN POWER 15
COUNTRY REPORT: INDONESIA “Between 2013 and 2016, the authority is looking to invest as much as US$250bn in public infrastructure, of which US$20bn has been allocated in 2013 alone.”
Lack of infrastructure SIAS Research reports that historical investment in electrical infrastructure has been way below GDP growth rate and there is an urgency to heighten supply. Between 2013 and 2016, the authority is looking to invest as much as US$250bn in public infrastructure, of which US$20bn has been allocated in 2013 alone. Plans are also in place to add 2,340 MW power plants this year. Several big projects such as the Central Java 2,000 MW coal‐fired power plant and the Asahan 180MW hydroelectric power plant are under construction to boost supply. However, SIAS cautions that this new capacity may not be sufficient to quench electricity needs, and if left unattended, could result in more frequent blackouts in the future.
Is achieving the proposed RE target highly questionable?
efforts, Indonesia’s Energy and Mineral Resources Ministry introduced ‘Regulation No. 4/2012’ in 2012. As per this regulation, the FiT for biomass power plants was fixed at IDR 975 (for feeding in at medium voltage in Java, Madura, Bali and Sumatra region),which is in the close range of FiT for geothermal power plants. Thacker notes that this change has encouraged companies to invest in the biomass power sector. For instance, Growth Steel Group is to invest IDR 220 billion to build a 30 MW power plant in North Sumatra. The project work for the same started in July 2012. Out of the planned capacity of 30 MW, 10 MW will be utilized for meeting captive power needs and the rest will be sold to state electricity company PT PLN through a power purchase agreement (PPA). In Sep 2012, the Korea Electric Power Industrial Development (KEPID) Group announced its development of a biomass power plant through the use of the industrial waste products generated through the process of producing palm oil in Pasaman Regency on West Sumatra. In Oct 2012, PT PLN announced that it had agreed to construct a biomass power plant of 1 MW capacity that would generate power by incinerating wood chips on Sumatra in partnership with the USbased company General Electric (GE). This plant is likely to be commissioned by 2014. Strong regulatory framework According to Thacker, strong regulatory framework is the most pressing need to build biomass power capacity. “Weak regulatory framework and lack of incentives dissuade investors’ interest to 16 ASIAN POWER
develop a market that has high growth prospects. Besides, subsidized electricity prices discourage investments.” Thacker said that in the current scenario where most of the planned thermal power projects are being delayed for various reasons, strong regulatory push from the government to address the various challenges in the biomass power sector would go a long way in harnessing the untapped potential. Achieving the proposed RE target in the given timeframe is highly questionable with the absence of industry-friendly regulations, he said. “The existing FiT policy is silent over the time period of PPA and this ambiguity will discourage potential investors to make early investments. The Energy Ministry may take a leaf out of Thailand’s neat and clear regulations for the installation of renewable power generators in the country.” Sustaining developers’ interest Like Thailand, Thacker adds that Indonesia should also specify a minimum time period in PPAs for the biomass power produced to sustain developers’ interest in this sector. “Apart from the FiT tariff regulations, government may also intervene to fix prices for the various types of biomass feedstock so that there is a regular rawmaterial supply to biomass-based power plants. If investors are assured about a regular and fair price supply of raw material, their financial risks will drastically come down and they will invest more in setting up new biomass power plants.” Thacker said the Energy Ministry should also look into the regulations that govern the retrofits market for old oil/coal
fired power plants to convert them into biomass fired power plants. “Introduction of separate incentives for co-firing coal based power plants with biomass as a co-fuel will generate interest. If the fuel mix of 95% coal and 5% biomass is used, no additional infrastructure investments are required and such projects should be highly encouraged by the government.” Thacker added that the Indonesian government could also consider providing tax benefits, plant machinery subsidies, and low-interest rate financing for biomass power plants. “All these regulations and incentives are highly critical for the biomass power sector to realize its hidden potential.”
Electricity usage per capita
Source: Bloomberg
Indonesia electricity capacity and generation
Source: Bloomberg
ASIAN POWER 17
Lee Sang Ho CEO Korea Southern Power Co. (KOSPO) 18 ASIAN POWER
CEO INTERVIEW
KOSPO’S CEO REVEALS PLANS TO GO GLOBAL Lee Sang Ho talks about recent developments in power generation and KOSPO’s strategies in meeting its vision of becoming a global top 10 power company by 2020.
S
outh Korea has just recently confirmed its intention to reduce reliance on nuclear energy amid growing public opposition since the Fukushima disaster and a local scandal over faked safety documents. South Korea’s energy ministry announced in October that nuclear energy should only account for between 22-29% of power generation capacity by 2035 against the 41% goal introduced in the previous longterm plan in 2008. What this would mean for the energy market is obviously an increased use of other fuel sources, especially renewables to cope with surging demand. In fact, the government has already implemented various rules and policies in this regard. Asian Power recently interviewed Korea Southern Power (KOSPO) CEO Sang Ho Lee to talk about recent developments in power generation and how some policies have affected its operation. Lee also shared KOSPO’s strategies in meeting its vision of becoming global top 10 power company by 2020. KOSPO bills itself as the first of the nation’s utilities to buy wood pellets to meet a renewable energy quota imposed by the government. As of now, how far along are you in meeting the requirement? Lee: Among all Korean Gencos, KOSPO led RPS requirement quota, with 834GWh for 2012. To fulfill, industry’s top tier
““Global top 10 power company by 2020” is a firm vision of KOSPO to go beyond #1 in Korea to become a truly global power company.“ performance on RPS by government, KOSPO is making strenuous progress on various renewable segments, including, on/off shore wind turbine complex, solar power, R&D on tidal generations, biomass, and mixed-fuel. Backed by such a comprehensive, and structured progress, KOSPO met 98% of RPS completion rate in 2012, which stands by far on top of its peers, hovering at 74 ~88% level. Especially, on biomass and mixed-fuel generations, KOSPO installed and operated wood pellet based mixed-fuel generation complex at Ha-dong 1~4 in October 2012, which account for 3% of total fuel consumed. Most of wood pellets are imported from Russia, Indonesia, and Vietnam with 41,000 tones in 2012, which translate into 10% of total RPS requirements. Coupled with on-going progress in performance improvement, KOSPO expects to qualify 100% of government RPS requirements by 2013 through increasing wood pellet proportion to 5%, and stabilized fueling methodology development planned for next year. How does KOSPO’s progress on RPS affect its financials in 2012? Lee:There is no policy guideline fixed for REC remuneration on wood pellet, thus cost pressure associated with it is on the rise. However, we think it would make positive contributions to KOSPO’s financials, should we consider “penalty” costs and risks caused by disqualification. In this respect, we think wood pellet based generation is a part of the clean energy portfolio to help KOSPO to comply with government’s green policy, and KOSPO to achieve Clean Energy Company, rather than a cash cow. In this respect, we, KOSPO, are proud to lead this initiative as a major contributor to bring a
clean environment to Korean citizens. KOSPO’s vision is to become “Global Top 10 Power Company”. Could you tell us the strategic directives to achieve this vision? Lee: “Global top 10 power company by 2020” is a firm vision of KOSPO to go beyond #1 in Korea to become a truly global power company. The crux of this vision is to provide a reliable source of power, to achieve global top tier business capabilities, and sustainability. With these assets, KOSPO is aiming to become a customer friendly power company in both Korea and abroad. To achieve this vision, KOSPO has defined 4 pillars of strategic directives, namely, 1) Domestic Power business growth; 2) “Optimising” future growth business opportunities 3) Strengthening core capabilities; and (4) Reinforcing “Management by Ownership”. Across these four pillars, KOSPO is proactively developing new growth initiatives. In tandem with the recent prolonged global economic downturn, KOSPO is renewing its business portfolio and investment strategy with reinforcing risk management. South Korea announced that it’s mulling over allowing nonstate companies to generate coal-fired power for the first time in three decades. How do you position yourself in case this becomes implemented? Lee: The PDP 6 includes approval of large scale coal plants. Backed by an increase in base load power capacity, we expect above 20% of reserve margin in the medium term. Especially, IPPs and joint investment projects on coal plants will improve reserve margins in Korea. On the other hand, CC segment is expected to face fierce competition, backed by deployment of highly efficient equipment. However, IPP’s investment prospect in coal plants are expected to be increasingly uncertain due to longer term of investment and rising risks in returns. This is due to the fact that IPP’s fulfillment ratio to its plan has been lower proven by history. On the other hand, KOSPO has already purchased 2 sites of 1,000MW each in Sam-cheock, an eastern city, with the launch of 2 units of green-coal technology based 1,000MW power pants. KOSPO has proven expertise in building and operating coal based plants backed by long history of operation, and stable investment bases, which could serve as a reliable substitute for IPP’s failure to meet their plans. To reflect such strength, KOSPO plans to extend development in Sam-cheock, as a part of the PDP 7 national plan. The coal plant under development in Sam-cheock adopts green-coal technology with low calories (4,000 Kcal) and low cost coals, hence provide solid economics, and environmental. In addition, KOSPO is also preparing for lower usage of CC by 1) Upgrading efficiency and 2) Extending district heat business in the vicinity of metropolitan areas. KOSPO plans to build the best performance class of CC for extension of Youngwol , in addition to An-dong, Young-nam CC, whilst, improving performance for Shin-Incheon and Busan. Shin-Incheon completed 1st performance improvement renewal to further strengthen efficiency and output. Also, KOSPO is developing heat businesses in the vicinity of Incheon and Busan areas by renewing CC equipment. This initiative is to add competitiveness of KOSPO’s district heat business. ASIAN POWER 19
Asian Power Awards 2013 hails outstanding companies Now in its ninth year, Asian Power Awards 2013 recognized the best initiatives and projects in Asia. The ‘Oscars’ of the power industry was graced by nearly 100 key executives. The judges were John Goss, Managing Director at Ceejay International; Narayan Bhat, Head, Power Asia at Lloyd’s Register Group; and John Yeap, Partner and Head of Energy – Asia at Pinsent Masons. Addressing the winning companies during the awards night, Yeap said, “We are always impressed by your nominations every year and the projects have been improving significantly. Congratulations to all the winners.”
Nguyen Hong Ha & Gao Xuejun of Alstom
Solar Power Project of the Year • Gold - Pratapghar 9 MWp Solar Power Plant powered by Integrated Coal Mining Limited • Silver - 100kW Offgrid Hybrid Inverter HITC for island electrification powered by Zigor HK Ltd. • Bronze- SPP2, SPP3, SPP4, and SPP5 Tracking Solar Power Plants powered by Electricity Generating Public Company Limited [EGCO] Hydro Power Project of the Year • SON LA HYDROPOWER PROJECT powered by Alstom Hydro China Co., Ltd & Vietnam Electricity Group (EVN) Biomass Power Project of the Year • Metso
Meiya Power Company team
John Yeap giving his Opening Remarks on behalf of the Judges
Wind Power Project of the Year • Longyuan Offshore Demonstration Wind Farm - Jiangsu Longyuan Offshore Wind Power Co.Ltd Coal Power Project of the Year • Gold - Hubei Xisaishan Power Project powered by Meiya Power Company • Silver - Trouble free operation for 5,000 days of Boryeong thermal power plant unit #3 powered by KOMIPO • Bronze - Mong Duong II, Vietnam powered by Victaulic Gas Power Project of the Year • Gold -Dangjin 3 CCPP - More than 60 percent efficiency for the first time in Asia - GS EPS Co. Ltd. • Silver - Paju Co-Generation Combine Cycle Power Plant Korea District Heating Corp. (KDHC) powered by EMERSON PROCESS MANAGEMENT ASIA PACIFIC PTE LTD
Bill Lowar & Alfred Chua of Victaulic
Fast-Track Power Plant of the Year • Gold - SON LA HYDROPOWER PROJECT powered by Alstom Hydro China Co., Ltd & Vietnam Electricity Group (EVN) • Silver -Siam Solar • Bronze -Mong Duong II, Vietnam powered by Victaulic Environmental Upgrade of the Year • Gold -Hubei Xisaishan Power Project powered by Meiya Power Company • Silver - NOx Emission Reduced Project of the Gas-Fired Combined Cycle unit at NanPu Power Station powered by Taiwan Power Company • Bronze - GE Emerson Process Management Korea Delegates 20 ASIAN POWER
KOMIPO Delegates
Arun Sachdeva of Tata Power Delhi Distribution Ltd
Saara Kujala of Wartsila
Jen-Ming, Hsu of Taiwan Power Company
Lee, Sang Ho of KOSPO
KOSEP & Doosan Heavy Industries Delegates
Gordon M. S. Woo & S. P. Tang of CLP Power Hong Kong Limited
Thomas Hagedorn of Siemens Energy
Javier Ferrer & Ernesto Rua of Zigor HK Ltd
Alstom Delegates ASIAN POWER 21
Transmission & Distribution roject of the Year • Gold - Chui Ling Road 132KV Substation: A Showcase of Stakeholder Participative Model and Sustainable Design in Hong Kong powered by CLP Power Hong Kong Ltd. • Silver - Integrated Call Centre with SAP BCM Support powered by Tata Power Delhi Distribution Ltd. • Bronze - A Successful Case in Preventive Maintenance Management powered by Taiwan Power Company Power Plant Upgrade of the Year • Gold- Eco-friendly and high-efficiency Energy Complex for Yeongheung Units 5 and 6 powered by Korea South-East Power Co. • Silver - Shinincheon Combined Cycle Power Plant Improvements powered by Korea Southern Power Co., LTD • Bronze: ZhuZhou Power Plant, China powered by Victaulic
JH Jeon & KH Cho from GS EPS and Thomas Hagedorn from Siemens Energy
Innovative Power Technology of the Year • Gold - Achievement of trouble-free operation during 3,000days powered by Korea Southern Power Co., LTD • Silver - Ongrid/Offgrid Three Phase Hybrid System HITD powered by Zigor HK Ltd. • Bronze - Improving power system efficiency with Fast Flexible Power – Case Thailand. Powered by Wärtsilä Smart Grid Project of the Year • Development and Establishment of A Data-Management Platform for Monitoring of Lightning Arresters powered by Taiwan Power Company Information Technology Project of the Year • Gold -Origin’s Information Technology Project of the Year – Origin • Silver - Load Forecasting Solution powered by Reliance Infrastructure Ltd • Bronze - Integrated Call Centre with SAP BCM Support powered by Tata Power Delhi Distribution Ltd.
Zigor HK Ltd Delegates
CEO of the Year, Mr. Lee Sang Ho
Power Utility of the Year - Thailand • Siam Solar Power Utility of the Year - Vietnam • SON LA HYDROPOWER PROJECT powered by Alstom Hydro China Co., Ltd & Vietnam Electricity Group (EVN) Power Utility of the Year - China • Hubei Xisaishan Power Project powered by Meiya Power Company Power Utility of the Year - India • 382.5 UNOSUGEN CCPP - TORRENT POWER LIMITED
KOSPO Team
Power Utility of the Year - Korea • Trouble free operation for 5,000 days of Boryeong thermal power plant unit #3 powered by KOMIPO Independent Power Producer of the Year • Gold - SINGRAULI SUPER THERMAL POWER STATION powered by NTPC Limited (Govt. of India Enterprise) • Silver - 382.5 UNOSUGEN CCPP TORRENT POWER LIMITED • Bronze -Rays Solar Park powered by Rays Power Experts Private Limited CEO of the Year • Mr. Lee, Sang Ho, Korea Southern Power Co., LTD Rahul Gupta, Bharat Gupta & Rakesh Kumar of Rays Power Experts Private Limited 22 ASIAN POWER
Markus Lorenzini of Siemens Energy
Sang Yeon Hwang & Dong Kyu Park of KOSEP
Lee Sang Cho of KOMIPO
Winyu Wongsangiem & Koh Ki Won of Emerson Process Management Korea
Lee, Geun Tag & Kim, Kyung Chul of KOSPO
CEO of the Year Mr. Lee Sang Ho giving his Inspirational Talk
CLP & TPDDL Delegates
Asian Power Team
Liu YangZhi, Leung HokLuen, Brian Sung & Wang XinMin of Meiya Power Company ASIAN POWER 23
co-published Corporate profile
Son La Hydro Power Plant – A Key Enabler in Vietnam’s Prospering Economy
See how Alstom’s presence in Vietnam for the last 20 years has contributed to the development of the country.
Global Technology Centre in Grenoble, France, prior to the deployment of the equipment. There are two significant highlights in the technology implemented for Son La. The first being the thrust bearings used in the plant that are supported by the turbine head cover. This configuration is widely used due to its technical and economic advantages; - A shorter shaft line resulting in cost savings in manufacturing and civil works - Increased rigidity of the head cover for improved axial dynamic behaviour - No transmission of axial hydraulic loads directly to the concrete structure, and - Pressure load under the turbine is balanced by thrust load, reducing head cover deformations.
W
hile challenges abound throughout the world, there is no question that the global economic and technological growth that has taken place in recent years is unprecedented. This growth has been particularly pronounced in developing nations like Vietnam, where the nation’s success story and roadmap to the future are still unfolding. Though there is still much work to do, Vietnam has made great strides. To help the country realize its place as an economic powerhouse, the existing infrastructure needs to be stable, reliable and flexible enough to facilitate the transition from an agricultural economy to one that is concentrated on high-value manufacturing and services. The availability of energy is an essential factor in this equation, and it is on this front where Alstom has proven to be a game-changer. Largest hydropower plant in SEAsia Alstom’s presence in Vietnam for the last 20 years has played a substantial role in bringing the nation to where it is today. They are also a significant contributor to the development of the power production in Vietnam which in turn spurs the country’s economic development. One of the most important power projects undertaken by Alstom took place roughly six 24 ASIAN POWER
years ago. In 2007, Alstom was awarded by Electricity of Vietnam (EVN), a state-owned utility company, a turnkey contract to design, engineer, manufacture and deliver six 400 MW Francis turbines for the Son La Hydro power plant. This was part of the government’s plan to increase the total power-generating capacity of the country to 75 GW by 2020. Situated at the Da River in the mountainous Son La province is the Son La power plant which is located 340km north-west of Hanoi and home to numerous ethnic groups. It is also the largest hydropower plant in Southeast Asia, accounting for around 10 percent of the total power generated in Vietnam. Highlights in Son La’s technology To ensure the smooth deployment and operations of the Son La power plant, Alstom conducted extensive tests and simulations in the Alstom
“Situated at the Da River in the mountainous Son La province is the Son La power plant which is located 340km north-west of Hanoi.”
With the thrust bearing supported by Alstom’s membrane technology, the load is always perfectly distributed between the pads, even if the assembly geometry is imperfect. Operations of this type of bearing are not influenced by radial deformations in the shaft or non-symmetrical deformations in the thrust bearing support. Another unique highlight of the technology in use is the oblique elements of the generator. These are strong yet flexible, and can withstand radial and tangential forces at the same time. The frame can absorb the torsion along the minimum resistance direction which improves hot stresses of the frame and allows the stator to expand freely and evenly in a radial direction. This increases generator lifetime and ensures safe operation of the generator. Alstom’s commitment pays off Beyond Alstom’s cutting-edge technology used for the Son La Hydro power plant, the level of commitment and teamwork displayed by the various stakeholders and departments involved allowed the construction of the plant to proceed seamlessly. As a result, the hydro power plant was completed two years ahead of time and it now plays a crucial role in helping Vietnam cope with its increasing energy demands. In addition to supplying water to the river delta, it also helps prevent flooding in the region. The Son La hydro power plant project was recently awarded the ‘Hydro Power Project of the Year’, ‘(Gold) Fast-Track Power Plant of the Year’ and ‘Power Utility of the Year for Vietnam’ at the 2013 Asian Power Awards held in Bangkok in October.
Make a commitment to the future, with Alstom
RAIL SYSTEMS Alstom is committed to enhancing the intelligence, comfort and fluidity of sustainable mobility. We develop, supply and maintain integrated, safe rail systems for public authorities, operators and passengers. POWER GENERATION Alstom and its partners are committed to rising to the challenges facing our society. We reduce the environmental footprint of our clients, optimize the flexibility and reliability of their plants, and lower the cost of power generation. ELECTRICAL GRID ENGINEERING Alstom builds power grids for now and the future. We interconnect major grids, ensure an intelligent balance between production and consumption, and improve the integration of renewable energy.
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SPECIAL FEATURE: POST-POWERGEN
POWER-GEN Asia 2013: Striving to secure a stable energy future for Asia
A record 7,800 attendees from over 70 countries converged in Bangkok, Thailand to find a roadmap to a more sustainable Asian power industry.
Governor. EGAT is also focused on implementing projects that will reduce costs and enhance energy efficiency such upgrading power facilities and working processes, strengthening manpower and management, and optimizing power dispatch. The power generation authority is also finding solutions on both the supply side and demand side. “EGAT carefully considered the trade-off between investments in power plant performance improvement and building new power plants,” shared Kumnoonsate. The agency is also encouraging the use of energy-efficient appliances.
M
ost participants and keynote speakers at the recently held POWER-GEN Asia 2013 shared the viewpoint that many Asian countries will need to explore renewable energy and energy efficiency in order to sustain their growth paths. Propelled by their blistering economic spurts, Thailand and other Asian nations are quickly burning through their oil and gas reserves, and must now develop clean energy alternatives. Thailand’s four-point plan As a stark example, Thailand is currently importing 85% of its oil consumption and 25% of its gas consumption. “If we do nothing… Thailand could be looking at 95%-95% levels by 2030,” warned keynote speaker Dr. Twarath Sutabutr, Deputy DirectorGeneral of Department of Alternative Energy Development and Efficiency, Ministry of Energy, Thailand. Sutabutr said Thailand is responding to the daunting clean energy challenge with a four-point plan that focuses on so-called “green growth.” First, the government will be phasing out the subsidy for liquefied petroleum gas (LPG), commonly known as cooking gas, which will further deregulate the fuels market. Second, Thailand is offering comprehensive incentives for development of renewable energy projects, including a feed-in tariff program and tax holidays. Third, the Thai Ministry of Transportation is funnelling huge investments to the mass transit and
26 ASIAN POWER
rail system, which Sutabutr said would significantly boost energy efficiency, not to mention deliver potent economic benefits by reducing logistics costs, connecting the country to its land neighbors, and improve transportation access within Thailand. Fourth , Thailand is dead set on tightening energy conservation regulations. With this four-point plan, Sutabutr said Thailand should be able to increase the renewable portion in its current energy usage to 25% by 2021, and reduce the nation’s energy intensity by 25% by 2030. Currently, Thailand is one of the leading countries in Asia in reducing its energy intensity, just behind Japan and Taiwan. Sutabutr also noted that Thailand is currently one of the most attractive markets for renewable energy investments, according to a Bloomberg survey – a fact that the country will surely capitalize on to fund its grand energy plans. The country also envisions more investments in building energy efficiency. Sutabutr said buildings in the Thai capital of Bangkok are becoming more and more efficient, in line with the nation’s goal for 20% of buildings in Thai major cities to become zero-energy buildings by 2030. A zero-energy building consumes zero net energy and produces zero carbon emissions annually. All government agencies are being aligned to achieve these Thai clean energy initiatives. The Electricity Generating Authority of Thailand (EGAT), for example, is focusing on upgrading infrastructure to support the use of renewable energy, said another keynote speaker Mr. Soonchai Kumnoonsate, EGAT
Premier conference programme After watching the keynote presentations from the local Thai hosts, POWER-GEN Asia 2013 attendees then spent the rest of premier conference programme exploring the floor exhibitors and participating in the discussion panels. 230 exhibitors from Southeast Asia and worldwide showcased their latest technologies, products and solutions that will be, if not already, propelling the region’s power industry. 150 conference speakers shared their insights and initiated discussions on the most pressing issues affecting the power generation and transmission & distribution industries, culminating in the POWER-GEN Asia Plenary Panel Discussion with the topic of “Asian Power – 2020 Vision”. “The 2013 POWER-GEN Asia and Renewable Energy World Asia in Thailand has been fantastic. We have received great feedback from exhibitors about both the quality and quantity of attendance here in Bangkok, as well as conference delegates commenting about the quality of the conference programme, which was continuously well attended throughout 3 days, in all tracks, as well as the newly launched Industrial Water Day,” said Glenn Ensor, Director of International Events at PennWell. “We are also excited by our return to Kuala Lumpur, Malaysia in 2014 which also plays an excellent host for the event and provides great support. It is our aim to ensure that next year at the KLCC will be yet another great event, with more exhibitors demonstrating their technologies and solutions to make the power industry more efficient, secure and reliable, greater conference contents and many more networking opportunities.
“Thailand should be able to increase the renewable portion in its current energy usage to 25% by 2021, and reduce the nation’s energy intensity by 25% by 2030.”
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Answers for energy.
SPECIAL FEATURE: POST-POWERGEN
V
eolia Water has been present in Asia for over 25 years now. Its Business Development Director Carlo Patteri believes Asia is one of the fastest growing markets in the world and that the biggest challenge in the region is how to effectively combine sustainable growth with conservation and access to resources. Patteri reveals that Veolia’s ‘blockbuster’ technology is related to the Zero Liquid Discharge (ZLD) requirements which are becoming more and more important in Asia. Inevitably, water shortages and increasing concerns for environmental impact from industrial use place a high degree of importance on recycling and reuse of this valuable resource. Hence, management of the entire water cycle for industrial applications drives efficiency and innovation towards ZLD in nearly every major industrial application. Veolia’s experience over a wide range of industries allows for innovations gained from one market to be utilized in other applications. This expertise extends to the fully integrated systems for Zero Liquid Discharge, supported by a total project solution that includes worldwide design-build project execution; state-of-the-art, 50,000 sq. ft. research & development facility; and highly integrated process systems supported by complementary Veolia technologies.
Veolia Water
Paul Coe, Global Power Market Director; Carlo Patteri, Business Development Director for Veolia Water Solutions & Technologies
many countries which allow them toPROFILE have good CO-PUBLISHED CORPORATE local knowledge – a real competitive advantage in the industry. Veolia currently has 132 business units worldwide. “So when the clients are local, we have local water knowledge, technical knowledge, and also we have knowledge of any of the clients may face in treating water. We also have local water supply Veolia’s edge According to Paul Coe, Global Director for Power, chain as well, which is a key advantage in most of Veolia’s biggest edge in the industry is its in-house these projects.” The rapid growth of the Asian market also research and development capabilities. Another Managing Director, Tony Segadelli, shares OWL’s strategic key differentiator, Coe adds, is their presence in means more power challenges and an increase in
water consumption. While each country has different needs and developments in terms of access for water, Veolia is constantly finding new ways to treat wastewater and to adapt the solution to the client’s needs.
OWL Group swoops across the Asian Region
South East Asia under its wings.
The OWL Group
“Veolia’s ‘blockbuster’ technology is related to the Zero Liquid Discharge which is becoming more plans to take important in Asia. nity for companies that are either new to ASEAN orbination want to that expand regionresults. to better unwill around provide the winning derstand the opportunities and the environment inASEAN which they will be operating. is currently following a European UnMr.type Segadelli noted that one isofcalled the main ion integration which the isAEC sues in the ASEAN Community). power industryHow is labor. Sin-ex(Asian Economic do you gapore is reluctant tobusiness have more pect this to affect inimmigrants the region?and theAlthough Philippines desperately people return. it has similaritiesneeds with the EU, to the regional “There’ a labor lessons shortage of skilled labor bankss basically learned difficult from the 1997 ecoinnomic the Philippines. Ashas a company recently set crisis, which resulted that in over $90 billion upinthere, I’veinseen a lot higher wages thanalone. I was As liquidity the Philippines and Thailand expecting. quality is there, but you long as a Although project hasthe strong fundamentals, financing doishave to pay a lot more, ” said Segadelli. typically available. OWL is able to provide assistHe added,“Capital is technical going to viability move more ance on ensuring the of a easproject ilyeither around the region, and that’ s going as Owner’s or Lender’s Engineer. to focus government’ making investThe AECs mentalities will lead totowards a better flow of people ments these countries attractive. ” strategy and in skills, which is partmore of OWL’s growth because we believe in growing ASEAN as a whole,
Tony Segadelli, OWL’s Managing Director
T
he OWL Group is the only truly ASEAN
high end power engineering consultancy Tony Segadelli - Chief Engineer / Managing Director
company having been established in Thailand and intoisthea Philippines. he expanded OWL Group new company in the Although OWL’ s core business is engineering power industry. However, in its three years of consulting it also develops projects in which it existence, it has rapidly grown to become one isofan equity shareholder. This unique approach the largest high-end engineering consultancies in means that OWL understands the risks and conSE Asia. cerns of its clients in more depth than many of its competitors whether they be boutique or global
T
Your competitors named their companies after why did you choose to name yours after a bird?
28 ASIAN POWER their founders;
consulting companies. Issues in ASEAN Tony OWL’ s Managing Director, was termsSegadelli, of structuring contracts (e.g. risk sharing) and one of the speakers at the recently held POWEReven developing projects as equity investors. GEN Asia conference in Bangkok. He spoke on the characteristics of the power industry within Why did you choose the Philippines as your Southeast Asia, from the holistic impact of the latest area of expansion? ASEAN integration, down to the effects on the The Philippines is very much a growing market, but power industry. These insights gave an opportuas we have observed, there are power shortages in many parts of the country. The main fuel in the Philippines is coal and OWL’s engineers have significant
Philippine Project rather than cherry-picking countries. The region has OWL is working 19.6 megawatt solar probeen integratingon theapower industry for more than ject the Philippines. It’s the firsthave utility scale PV a in decade, and our engineers been involved project in the country becausethat the way they feedthis in some of the key projects are enabling inincluding tariff is set up, you have to go commercial first working on Cambodia’s first transmission before you can get your final permit in place to be line, which was supplied from Thailand, plus crossanborder accredited seller. deals. Another regional change hydropower is the emergence of Myanmar from decades of iso-
“Although OWL’s core lation. business is engineering How is OWL positioning for this change? consulting it alsoitself develops We have been discussionsit with projects ininwhich ispotential an clients in Myanmar for quite some time and have recently equity shareholder.” won a project there and are expecting a lot more work to follow. The government is very keen on bringing in foreign direct investment, and we are
SPECIAL FEATURE: POST-POWERGEN
Alstom
the type of fuel. The boiler provides customers in coal-rich markets with the opportunity to reduce operating costs and increase output. According to Pierre Gauville, Alstom’s CFB Product Manager, one of the advantages of this new technology is that the overall efficiency of a power plant is increased by around 3 points. It also reduces the CO2 footprint by 6% compared to traditional technology. “Our CFB boiler is a cost effective solution to burn fuel efficiently with a very low NOx as compared to the conventional boiler,” he added.
Pierre Gauville, Alstom’s CFB Product Manager
A
lstom designs and supplies utility-scale boilers burning a wide range of fossil fuels for steam power generation. With over 100 years of experience, Alstom continuously innovates in clean combustion technologies with its utility boilers. Up to 30% of the world’s boilers use Alstom technology, producing a staggering combined output of 835 GW. With an extensive range of boilers and firing systems, Alstom’s combustion technology has been proven to burn coals, lignites, biomass, liquid fossil fuels, and gaseous fossil fuels as cleanly
as possible. That means improved efficiency and reduced emissions of NOx, SO2 and greenhouse gases.
G
GE
E has its eyes set on growth and expansion especially with energy demand in Asia expected to grow 3.7% for the next 20 years. “In the ASEAN region, growth demand is expected to double during the same period as well so I think all in all, from energy demand to energy growth, the market is very hot right now,” says Ramesh Singaram, Regional General Manager, Power Generation Products and Services, GE Power & Water. According to Christopher Mastriani, F-Class Gas Turbine Upgrades Product Manager, Power Generation Services, GE launched two new GE solutions platforms as part of its Predictivity portfolio. GE’s new solutions One of the solutions, the FlexEfficiency Advantage (FEA) platform, focuses on GE’s F-class gas turbines where advanced gas path hardware are combined with software to provide additional output, efficiency, reliability, and emissions reduction capability of that hardware,” says Mastriani. GE customers also can benefit from an extension of maintenance intervals, asset and parts life through more durable hardware components and software technology that automate operational adjustments to reduce stresses on parts. On the other hand, GE’s LifeMax Advantage solutions help GE customers with installed B/EClass gas turbines reset the clock on their aging assets with tailored upgrade packages. The installation of GE’s most advanced hard-
Advanced CFB boiler During the recently held POWERGEN Asia in Bangkok, Alstom launched the new Advanced Circulating Fluidised Bed boiler that utilises the efficiency of ultra-supercritical (USC) steam conditions and the flexibility of circulating fluidised beds (CFB). It offers 660 MW or more in output, based on
Efficiency and low emissions Alstom also revealed that circulating fluidised bed technology allows for a wide range of lower-grade fuels, such as lignite and anthracite, to be combusted efficiently and with low emissions – reducing the need for additional environmental protection measures. Further versatility comes from the ability to fire on mixes of fuel types, and even ‘fuels of opportunity’, including biomass and oil shale. Over 32 GW of CFB boilers installed in the world today use the Alstom technology with a maximum commercial size around 350 MW.. This product is best deployed in markets where lower quality fuel is available. As a result, areas of Vietnam near the anthracite mining industry is a prime market.
“Up to 30% of the world’s boilers use Alstom technology.”
Ramesh Singaram, Regional General Manager, Power Generation Products and Services; Christopher Mastriani, F-Class Gas Turbine Upgrades Product Manager, Power Generation Services
ware and software offerings on this fleet of units, which averages more than 17 years in operation, can significantly extend their life cycle of operation. GE’s LMA platform features solutions including upgrades to B/E-Class AGP systems; DLN combustion technologies such as 32K, which allows operators to run their units up to 32,000 hours between scheduled maintenance intervals;
and Flange-to-Flange replacements of core engine components.
“GE has its eyes set on growth especially with energy demand in Asia expected to grow 3.7% for the next 20 years.” ASIAN POWER 29
SPECIAL FEATURE: POST-POWERGEN
S
iemens’ energy sector is one of the world’s leading suppliers of a wide range of products, solutions and services in the field of energy technology. With around 86,000 employees worldwide, the company enables customers to generate, transmit and distribute electrical power at the highest levels of efficiency. Asian Power caught up with Markus Lorenzini, Siemens’ Head of Energy Sector for the ASEAN Pacific Cluster at POWERGEN Asia in Bangkok and he shared his insights on the energy and power needs of ASEAN countries. Lorenzini notes that Malaysia, Thailand, and Singapore are some examples of energy-hungry countries. “They want to optimize their usage of fossil fuels and reduce the expensive import of these fuels, and therefore there is a clear intention to optimize their installed fleet, and to get a higher energy efficiency in the country.” On the other hand, there are “next wave” generation countries like the Philippines and Indonesia where the main goal is to get energy into their country to serve the population. For instance, in Indonesia, the current electrification rate is low at less than 75%. Transmission and distribution Lorenzini reckons that transmission and distribution gives an opportunity for the countries in ASEAN to collaborate with each other and to optimize the energy resources. He adds that the interconnection between the countries is essential to improve the stability and the sustainability of the electricity system in ASEAN countries.
SIEMENS
Markus Lorenzini, Siemens’ Head of Energy Sector for the ASEAN Pacific Cluster
Siemens has done the HVDC link already in 2002 between Malaysia and Thailand on 110km. They have also installed interconnection between the South Island and the North Island of New Zealand, and are in close contact with authorities for the upcoming opportunities in the region. There is a 3000-megawatt interconnection planned between China and Thailand via Laos, and there will be an interconnection plant between the island of Sumatra and the island of Java in Indonesia. “What we definitely love to see is for all the
ROCHEM
S
30 ASIAN POWER
“Transmission and distribution gives an opportunity for the ASEAN countries to collaborate with each other.” WASH System are SIEMENS, GENERAL ELECTRIC , ROLLS ROYCE, ALSTOM and other major OEM’s.
Ferouz Ali, Rochem’s Business Development Manager/Regional Director
ince 1978, Rochem Technical Services has been a market leader in gas turbine and process compressor cleaning technology, cleaning chemicals and associated equipment. Being the only company in the world that designs, manufactures, markets and supports its own systems and chemicals on a worldwide basis, Rochem has met and exceeded its customers’ expectations over the years. Rochem’s patented cleaning system technology
countries here in the region to work and interact with each other rather than just talk about these collaborations, and also for the environmental issues to be given more attention to ensure high efficiency and less pollution,” says Lorenzini.
is based on a unique atomising injection nozzle system design and the broadest range of manual to fully-automated wash skids to suit every make and type of gas turbine and process compressor. These systems and chemicals are known worldwide as FYREWASH for online cleaning systems and KRANKWASH for off-line/on-crank cleaning systems and chemicals. Among the many gas turbine manufacturers and packagers that incorporate Rochem’s FYRE-
FYREWASH F4 Ferouz Ali, Rochem’s Business Development Manager/Regional Director, revealed that they are launching their new chemical this year called the FYREWASH F4. This was developed to give the maximum possible cleaning efficiency and effectiveness from a non-solvent chemical. Rochem’s R&D department have developed this product using state of the art technology, resulting in a non-hazardous, userfriendly and biodegradable water-based cleaner. FYREWASH F4-MC has been developed to meet the most stringent cleaning abilities and chemical & physical requirements to meet the standard for military applications according to MIL-PRF-85704-c. FYREWASH F4-CC is an environmental friendly product, according to OECD 301-A test and has been developed to meet the requirements of OCNS for use offshore whilst still achieving a high cleaning ability.
“FYREWASH F4-MC has been developed to meet the most stringent cleaning abilities and chemical & physical requirements.”
ASIAN POWER 31
OPINION
JOHN GOSS
Increasing business opportunities in China’s clean energy developments john.goss@ceejay.com.hk
T
he considerable investments going into renewable and clean energy in China will present numerous opportunities for investors and partners; with many challenges for the nation’s clean energy development. The Vice Chairman of the country’s National Development and Reform Commission (NDRC), Xie Zhenhua, recently reported that China’s investments into renewable energy will reach RMB 1.8 trillion yuan (US$294 billion) during the current 12th FiveYear Plan (2011-15). The government is also planning to spend another RMB 2.3 trillion yuan on energy conservation and in efforts to reduce harmful emissions to boost the green economy. China has carried out a series of policies to cope with climate change, and the nation has achieved some successes after several years of effort. The NDRC reports that the country’s national energy consumption per unit of gross domestic product was reduced by 3.4 percent and that China’s carbon emissions were also reduced, when compared with the same period last year. From 2006 to 2012, China’s energy consumption per GDP was reduced by 23.6 percent, which is equal to a reduction of 1.8 billion metric tons of carbon emissions. China’s economic development, which has heavily depended upon high energy consumption and high levels of emissions, has not changed yet and the country’s emissions per capita are still higher than the global average, said Xie. Authorities in China have made a commitment to the world that it will reduce the country’s carbon emissions per unit GDP by 40 to 45 percent by 2020, compared with the 2005 level, and raise the nation’s non-fossil energy consumption percentage to 15 percent of China’s primary energy mixture at the same time. These new investment plans will present increasing opportunities in China’s nuclear, wind and hydropower sectors. These significant investments will also support other clean energy power generation projects and subsidies for power plants. Power plant and power grid equipment manufacturers to benefit The Chinese Central Government is now encouraging low-carbon projects, which also bring business opportunities to the suppliers for such projects. Both foreign and domestic equipment manufacturers for China’s power plants and power grids will benefit from the policy, say domestic market analysts. Distributed solar, wind and hydropower generation project investments will see an increase whilst demand for traditional fuels, such as coal, will decrease in the long run. China has the resources and the technological potential to develop renewable energy on a much larger scale. This will be more beneficial for population and economic development in the future. According to a 2012 industry report, the annual growth rate of global energy consumption was 1.8 percent. This is much lower than the average level of 2.6 percent in China over the past 10 years. The BP Energy Outlook, which was released in early July, says that renewable energy accounted for 4.7 percent of global power generation – this is a record high level. China’s Long-Term Energy Plan, issued recently, reported that by 2050, renewable energy, excluding hydropower, will be ac32 ASIAN POWER
counting for somewhere between 17 and 34 percent of the country’s national energy demand. The Secretary General of the United Nations, Ban Ki-moon said recently that China benefits the global economy and promotes socially sustainable development through its contributions to the Global Compact. The Global Compact is a UN initiative which is aimed at encouraging businesses worldwide to adopt sustainable and responsible social policies. China, in recent years, has made great efforts to encourage its industries to adopt energy saving methods and technologies. Additionally, the Chinese Central government is increasing its investments into renewable energy to reduce the nation’s fossil fuel consumption. A good example of this initiative in action is Sinopec Group, which is Asia’s largest refiner. In July, Sinopec Group announced that it will be investing approximately RMB 22.6 billion yuan to upgrade its current production equipment and operations in order to protect the environment and to realize green development. Companies can make profits and also protect the environment at the same time through responsible investments and efficient production methods. It now seems the nation’s renewable energy sectors are being funded properly. Also the Chinese government is fully supporting the strong development and application of its clean and green energy resources. So, if strong financial funding and government support are the game changers, then China will achieve its renewable energy goals.
Are renewable energy goals finally achievable?
co-published Corporate profile
DS Agile: Mastering the Digital Substation
Tailored Automation Solutions for full protection, control and situational awareness.
A
lstom offers the latest in turnkey automation solutions for digital substations. This combines cuttingedge hardware, software, communications and the highest technology engineering to meet the IEC 61850 standard, which guides the industry. Solution scalability is provided in terms of functionality, architecture and services, and can be tailored either to single substations or to wide-area systems comprising multiple substations. DS Agile is a complete substation automation solution whose typical architecture is built around a local IEC 61850 Ethernet network (LAN) that acts as a backbone, linking all components and the operator interface (HMI) together. The network can be local to the substation or can interconnect several dispersed substations. All LAN systems are linked to the grid control room. DS Agile may also connect with the primary bays via a process bus built on redundant IEC 61850 Ethernet architectures. Merging and control units collect, process and transmit measurements, indications and commands from the primary equipment. Digital instrument transformers and online condition monitoring units for the primary equipment can be added, optimising safety, operational costs and substation situational awareness locally and remotely. Alstom’s engineering and service teams can provide upgrade and modernisation solutions for any system, whatever its age or generation. We provide stage-by-stage extensions, whilst keeping the remaining circuits
safely in service. The extensive self-diagnostic capabilities of digital devices ensure maximum availability of the substation, as well as its full suite of functionalities: any degradation in the performance of an asset is pinpointed in realtime. The inherent redundancy built into the system can be employed to self-heal, and permits troubleshooting without the need for primary system outage. The digital substation closely monitors all substation equipment in terms of operational conditions and asset health indicators. Intelligent systems analyse the data and provide recommendations on maintenance and repair actions, avoiding unplanned outages and emergency repair costs. DS Agile is much more than a control and protection system for substations. Rapid data exchange and communications between all control and protection IEDs is enabled, not only across the substation and substation gateway, but also through Wide-Area Control Units (WACU) that can process real-time automation, taking into account the topology of multiple substations. The new WACU solution developed by Alstom
“DS Agile may also connect with the primary bays via a process bus built on redundant IEC 61850 Ethernet architectures.”
makes inter-substation automation possible, helping protect assets and optimise power flows. Alstom leads the industry in providing all of the components and smart solutions within the digital substation. The MiCOM P40 Agile protection relay family offers the full range of transmission-class protection, extending to generation, distribution and industrial markets. MU Agile merging units can either be used to interface COSI optical or Rogowski-effect non-conventional instrument transformers, or to digitise the output of conventional current and voltage transformers into IEC 61850-92LE sampled values. Throughout the system, a process bus Ethernet architecture can replace the kilometres of copper hardwiring typical of legacy technology, reducing the extent of on-site work and improving safety for field personnel. Alstom Smart Digital Substation Solution • • • • • • • •
Enhanced safety and reliability Increased flexibility Asset management Cyber security Reduced total cost of ownership Wide-area situational awareness Remote access Less copper
For further information, contact Alstom Grid Substation Automation Solutions Mr. LIEW CHIN LEONG at: +65 97921185
OPINION
BARRY DESKER
How ASEAN countries deal with the evolving energy landscape
Supply-demand imbalance troubles ASEAN
A
SEAN’s energy sector is facing major challenges. Demand for energy is expanding on the back of economic and population growth and greater urbanization, while indigenous resources are steadily shrinking. These trends are playing out against a backdrop of evolving global energy dynamics and a more challenging environment for policymakers in navigating bilateral and regional relationships. To ensure that energy supplies going forward are secure, affordable and environmentally sustainable, ASEAN governments have embarked on several initiatives. Individually, they are moving towards diversifying their energy mix away from traditional fossil fuels and relying more on natural gas and renewables. Indonesia and Malaysia are set to begin importing LNG this year. Singapore is among the emerging new LNG importers, with its new LNG terminal potentially turning into a trading hub for the Asian region. The region’s energy supplies could receive a boost if domestic regulatory issues in the United States are ironed out and its shale gas exports head west towards Asia. Collectively though, ASEAN countries should ensure that they fully optimise the region’s energy resources. The Southeast Asian states should strive toward smooth implementation of their energy projects, and further promote renewable energy growth. Regulations– such as tariff and non-tariff barriers – impacting domestic and intra-region investment in new energy sources should also be eased. Optimising regional cooperation The ASEAN Power Grid (APG) and the Trans-ASEAN Gas Pipe-
34 ASIAN POWER
by BARRY DESKER Dean Rajaratnam School of International Studies, NTU
line Project (TAGP) are crucial projects to address the imbalance in the distribution of power-generating resources in the region. The APG connects countries with surplus power generation capacity to those who face a deficit. The aim is to link up power lines in the 10 ASEAN member states by 2020, but there is still a need to further harmonise business regulations, and technical standards and systems, that impact the interconnection of national power grids. It has also been challenging to secure firm commitment - and funding - for such projects, as the economic viability of connected power grids has yet to be proven, and governments understandably have diverse and sometimes conflicting national priorities. The TAGP links ASEAN’s gas suppliers and producers to member states who need to purchase gas. There are now 11 cross-border gas pipelines in operation with a total pipeline length of 3,020 km. The 12th cross-border gas pipeline, a new 298 km connection from Myanmar to Thailand, is scheduled for operation by mid2014, and more pipelines are in the planning stage. Despite more ASEAN countries becoming LNG importers, intra-ASEAN gas pipelines continue to be important to ensure the region’s energy security and economic connectivity. Existing challenges to cross-border pipeline development projects will need to be addressed. For instance, several cross-border projects in Indonesia have been delayed due to heightened nationalist sentiment with calls for the Indonesian government to channel available gas supplies to the domestic market. Rising energy demand across Asia is inevitably leading to interstate competition for available resources. Overlapping claims in several disputed areas within the region pose a threat to unimpeded cross-border energy supply. The importance of looking inward While efforts are made to smooth out the kinks in a regional energy-sharing framework, ASEAN members should engage in some housekeeping. Domestic policies to encourage the development of cleaner fuel sources and green buildings should be high on the policy agenda – Indonesia for instance is working towards enlarging the role of renewable energy sources such as solar energy in its fuel mix, while in its capital Jakarta, authorities are enforcing environmentallyfriendly building codes on new buildings. The removal of tariff and non-tariff barriers and harmonisation of standards to facilitate intra-ASEAN trade and investment in renewable energy and energy efficiency are necessary, as are ongoing efforts to reduce energy intensity via stricter regulations on household appliances for instance. Additionally on the policy front, the impact of energy subsidies needs to be carefully considered. Thailand’s energy reserves are now anticipated to last for only another 20 years due to rising oil demand driven by fuel subsidies. Malaysia cut fuel subsidies in early September to reduce its budget deficit while Indonesia did the same in June, in a move to ease the pressure that its bloated fuel subsidy bill put on its current account deficit, the stock market and the rupiah this year. Innovation in the energy sector will need to be encouraged – whether through joint regional cooperation on the development of smarter green buildings or multi-lateral and private funding in research and development in bio-fuels, for instance.
Developing sustainable power grids, with Alstom ELECTRICAL GRID ENGINEERING Alstom builds power grids for now and the future. We interconnect major grids, ensure an intelligent balance between production and consumption, and improve the integration of renewable energy.
www.alstom.com
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Answers for infrastructure and cities.