Asian Power (November - December 2018)

ISSUE 90 | DISPLAY TO 31 DECEMBER 2018 | www.asian-power.com | A Charlton Media Group publication

US$360P.A.

ADARO POWER’S ASIAN LINKS BOOST 2GW CAPACITy PRESIDENT DIRECTOR MOhAMMAD EffENDI CREATES TIES WITh UTILITIES IN JAPAN AND KOREA TO PROVIDE POWER TO INDONESIA

COMPETITION PUTS JAPAN UTILITIES AT RISK AUSTRALIA’S ENERGy CROSSROADS CAN INDIA MEET ITS 175GW GOAL? IS COAL STILL NEEDED IN ASIA?

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CONNECT

FROM THE EDITOR The Asian Power Awards just had its 14th year of recognising outstanding players in the industry. Over a hundred executives and officials from the winning companies bagged a total of 71 awards in what is dubbed as “The Oscars” of the power industry. See what transpired in the Ritz-Carlton Jakarta during the grand awards night on page 22.

Publisher & EDITOR-IN-CHIEF Tim Charlton production editor Danielle Mae V. Isaac Graphic Artist Elizabeth Indoy

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Five prime ministers later and the absence of Australia’s central energy policy is still felt through disjointed energy targets across states and consumer price hikes that have reached 80-90% in the past decade. But tides are changing and companies are stepping up as 10,400MW of renewables will likely be installed in 2018 and 2019 amidst economic growth. Find out more on page 16.

Asia goes against the global trend towards renewables as coal investment in the region could still balloon to $250b in the next decade. But some power executives are now hesitant just at the thought of a greenfield coal project, due to the increased withdrawal from pressured banking and funding giants. Read more on page 18.

We also sat down with PT Adaro Power’s president director Mohammad Effendi as he shared how the company marked the path ahead for Indonesia’s ties with Asian utilities giants in Japan, South Korea, and the rest of the region. This is in line with the company’s strategy to explore renewables and grow its 2.26GW portfolio. Read on what he has to say on page 14.

Start flipping the pages and enjoy!

Tim Charlton

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ASIAN POWER 1

CONTENTs

22

16

INterview 14 CEO Adaro Power taps Japan, Korea to grow 2GW capacity

09 Woes in Myanmar’s energy mix 10 Taiwan sets for windy shores

secTOR REPORT Coal seeks significance as Asia shifts to renewables

OPINION

FIRSTS 08 Utilities challenged by competition, credit risks

EVENT COVERAGE Find out who emerged as the victors in the Asian Power Awards 2018

36 A riddle wrapped up in an enigma—Why can’t Indonesia

get the power sector right?

38 Indonesia’s approach to waste-to-energy technology

12 Churning energy from large city waste

Country report 18 Renewables grow as policies reach crossroads 20 Making ends meet for Vietnam’s growing energy sector

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For the latest news on Asian power and energy, visit the website

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CO-PUBLISHED CORPORATE PROFILE

TEPCO F&P eyes regional and global reach through expansive knowledge and technology Its collaboration with Chubu Electric Power will allow it to supply energy to Asia and conduct knowledge transfer, skills training, and contingency planning to help companies that have an eye for operational sustainability.

T

okyo Electric Power Co. (TEPCO), which supplies power and electricity in the capital of Japan is looking to venture regionally and globally by offering their expertise and pioneering technology to countries needing to meet their growing energy demands. “We are now shifting from the traditional asset business related to thermal power generation,” said Toshiro Kume, Managing Director of TEPCO Fuel & Power, Inc. (TEPCO F&P) “We are making use of our knowhow and capability and provide that to other power generation companies in Southeast Asia, which makes the availability and heat efficiency in a very good manner in those companies.”

Apart from providing equipment and technology to these companies, TEPCO F&P also plans to conduct knowledge transfer, skills training, and contingency planning for experts and officials of these countries with an eye for operational sustainability. Some of the salient pain points of the energy sector in parts of Asia are the reliability and availability of power plants due to operational anomalies and quality equipment.

“The traditional objective for TEPCO F&P was to make our power plants run in a stable manner.

The same objective applies to the old [independent power producers], especially in the Southeast Asian markets,” Kume said. “I think it’s a top priority for top IPP companies to have their power plants running [well]. In terms of the availability issue, we are very much good at that. We would like to provide services through our capability of maintaining a very high class OEM management.”

In April this year, TEPCO F&P through JERA (a loose adoption of the company’s motto: “Japan’s

Energy for a New Era”), announced their plans to invest $935m in power generation projects in the United States by 2030. This planned investment is expected to contribute to the venture’s current capacity in North America, which stands at about 3,000MW. This includes five US natural gas-fired power plants as part of the Tenaska Gas Thermal IPP Project.

These moves point towards TEPCO F&P’s aim to expand its plant solution service business globally, with a goal of “pursuing various overseas power generation and investment projects, with the aim of achieving new growth and development by promoting business opportunities abroad.”

This aim also covers JERA’s countries of operation such as the Netherlands, Qatar, India, Oman, the United Arab Emirates, Thailand, Taiwan, Singapore, Mexico, the Philippines, Vietnam, and Indonesia.

Big collaboration This comes after TEPCO F&P and Chubu Electric Power Co., another major power utility supplying energy in the central parts of the country, announced their decision to further integrate 25 of their fossil fuel-fired power plants and other assets including various liquefied natural gas (LNG) terminals to their 2015 joint venture JERA Co., Inc., the decision forms part of continuous efforts from two of the biggest energy companies in Japan to expand globally.

The move, according to reports, will provide JERA a power generation capacity of about 66.4GW, or nearly half of Japan’s total capacity.

“We think it’s very important to have the strategy globally; that means we have to compete with

other big players in the global market,” said Kume.

“Our capability is currently at 90 power units. To be honest, that’s not big enough to compete in the power market globally but making an alliance with Chubu means the power plants we own are at 135 [units]. So that means we have a very big capability for the business related to power generation.”

The TEPCO F&P official added that JERA, which aims to become one of the world’s leading energy firms, currently covers the whole body of thermal power generation businesses with the company having investments in gas fields as well as fuel trading with their operations in Singapore. JERA’s foreign power generation operations started in July 2016. “We also have the actual generation facility.

We have invested in various power plants around the world, so that means we are big enough to compete with other players globally,” he said.

CONTACT Company name: Tokyo Electric Power Company Holdings Address: 1-1-3 Uchisaiwai-cho, Chiyoda-ku, Tokyo, 100-8560, JAPAN Phone number: 81-(0)3-6373-1111 Website: https://www7.tepco.co.jp

“I think it’s a top priority for top IPP companies to have their power plants running well.”

TEPCO aims to become a global energy company, competing across the world.

Toshiro Kume, Managing Director of TEPCO Fuel & Power, Inc. ASIAN POWER 3

CO-PUBLISHED CORPORATE PROFILE

Hilliard Corporation: Keeping turbomachines in shape through HILCO’s top-notch filtration systems HILCO’s state-of-the-art filtration products and services engage dry resin ionic exchange and keep power plants in shape by preventing varnish build up and excessive wear and tear.

Dry resin ionic exchange prevents varnishing.

W

coating hydraulic valves and pumps. hen engineers first examined the power These contaminants are prevalent in the base plant which provides electricity to the oil stocks which many power plants use, making historic Texas A&M University, they power plants particularly vulnerable to this discovered an alarmingly high level of varnish insidious process. The increased friction created formation. Realising that uncontrolled varnish by varnish buildup results in equipment damage formation can wreak havoc on the university’s due to increased wear and tear, as well as less power supply, Texas A&M Utilities and Energy fuel efficiency due to shorter fluid life.

Services immediately contacted Hilliard This is why an efficient filtration system is Corporation to solve the problem. crucial to ensure that a power plant remains Using its patented dry-resin ion exchange cartridge in the oil conditioning Varnish formation in tip-top shape. Varnish formation is a serious problem system, HILCO was able to is caused by the that degrades power plant drastically reduce the varnish in the lube oil in a span of three buildup of insoluble operations, and can lead contaminants which to massive losses if left short months. unchecked.

“Acid and varnish have are too small to Thankfully, Hilco’s top-ofbeen a problem for a number be trapped by many the line filtration systems can of years basically due to commercial filters. easily bring fluid contamination the number 2 base stock problems under control. oils that power plants are using now. Over the HILCO solves the problem of acid and varnish years, they’ve become a problem due to the buildup through its patented dry resin ion acid becoming a varnish, which coats critical exchange technology. The severity of varnish components such as control valves and interior formation can be aggravated by specific oil portions of reservoirs,” explains William chemistry, hot spots in the lube oil system, Cantando, sales manager at Hilliard Corporation. and static discharge. HILCO’s ionic exchange Varnish formation is the nemesis of hydraulic technology has proven to be an effective method systems. Varnish formation is caused by the in reducing varnish potential in a wide variety of buildup of insoluble contaminants which are too applications in both mineral and synthetic fluids. small to be trapped by many commercial filters, 4 ASIAN POWER

“We’ve come up with a patent technology called dry resin ion exchange. That particular product has become an industry leader in removal of acid and varnish in a system. It uses dry resin beads that absorb the acid and the varnish in the system and aggressively removes it,” Cantando says.

Patented technology The patented dry resin technology absorbs varnish and acids but does not add dust or migrate into the fluid. The dry resin can reduce a fluid’s total acid number using as little as 0.01 pounds of resin per gallon of fluid.

This makes it a cost-effective treatment method that offers a value for money which is truly hard to match. “The dry resin ion exchange uses an hourglass-designed cartridge that eliminates exposure or blowing up that we see in other systems,” adds Gregory Bickham, regional sales managers at Hilliard Corporation. “Using this technology, there is no particle distribution downstream, so it eliminates the need for a trap filter downstream,” he explains.

HILCO brings fluid contamination problems under control, cost effectively with our full range of engineered filters, cartridges, reclaimers, coolant recyclers & fluid conditioning systems.

But HILCO offers far more than just filters.

It provides a full service fluid management

CO-PUBLISHED CORPORATE PROFILE

process, from obtaining samples, to fluid analysis, consulting on equipment, field techs, start up help, and more.

HILCO also offers ionic exchange cartridges, designed especially for reducing total acid number levels in phosphate ester based hydraulic systems. The ionic exchange cartridges are also an efficient remedy against varnish formation.

The severity of the varnish formation can be aggravated by the specific oil chemistry, hot spots in the lube oil system, and static discharge.

HILCO’s ionic exchange technology has proven to be an effective method in reducing varnish potential in a wide variety of applications both in mineral and synthetic fluids.

Fighting off static discharge Another problem plaguing turbomachines is static discharge. This phenomenon occurs when HILCO’s filtration systems cost-effectively provide solutions to fluid contamination problems oil generates sufficient static electricity to form static discharge in the system, which creates sparks. This form of oil degradation has been facility is continuously examining and improving the varnish. We use a product that actually has studied extensively in many systems, including cartridge performance as customer’s needs different parts in it, non-conductive parts, so that evolve. HILCO is a major to supplier to original large frame gas turbines. the static discharge is not permissible inside of To remedy this, HILCO also offers an antiequipment manufacturers worldwide. the system,” Cantando adds. static cartridge which features conductive fibers HILCO is part of the Hilliard Corporation, a Originally developed in the 1990s to solve which are co-pleated in between two layers of world leader in motion control and filtration a static discharge problem for a power plant in hi-performance microglass filter media. This products since 1905. For over a century, Japan, HILCO’s customers cartridge is used to address Hilliard has been engineering, manufacturing have successfully relied on the extremely low fluid and distributing motion control and filtration For over a century, the anti-static filter element conductivity of Type II products. Its extensive history, expert knowledge Hilliard has been for years. The anti-static lubricant base stocks used of applications and strict quality standards engineering, charge elements are offered in turbo machines. makes the company a leading industry supplier. manufacturing and as a direct replacement for “The problem with base II distributing motion all HILCO standard size filter A century of expertise stock oils is the conductivity of the oil. So what this control and filtration elements.

Hilliard’s large portfolio of products can be In order to determine cartridge actually does is it modified to meet new applications. Hilliard is an products. fluid conductivity, HILCO lowers the conductivity of ISO 9001:2015 certified organisation. offers full laboratory services and can verify the the oil and eliminates the static discharge seen in “The HILCO Corporation has been in business conductivity of a user’s oil if a static discharge the systems,” Bickham says. for over a hundred years. We have our own R&D problem is suspected.

As a result, static charges can build on the nonlab as many companies do. However, being an The reliability and efficiency of any filtration conductive components of the lube oil system, OEM favourite, we see more of the problems in system is chiefly dependent on the quality of such as the filter. When a sufficient charge is the field than many other companies do. We’re the cartridges used in it. HILCO has a full line of accumulated, static discharge occurs. Over time, an engineering-based type company, so it gives filter cartridges for virtually every application static discharge contributes to troubling oil us the ability firsthand to look at an issue or a depending on size, filtration efficiencies and dirt- problem and try to solve it immediately many degradation and varnish buildup. holding capacity.

But with the anti-static filter, the static charge times before our competitors do,” Cantando says.

Most fluids can be restored to an almost build up can be dissipated before discharge can With a sound understanding of engines and brand-new condition. HILCO’s on-site testing occur. “The anti-static cartridge eliminates the filtration devices, Hilliard engineers design complete systems, including electromechanical interfaces. Hilliard often works with customers to research and test products, acting as a lab for specific applications.

Each of its processes are documented to regulate operation, even on very short production runs. Experienced machinists and code welders work efficiently to keep operating costs low whilst transforming blueprints into products.

Following documented processes, these craftsmen use bar-coded, computerised production controls to guarantee high-quality output. The company’s goal is to manufacture products that solve customer problems. And over the years, it has found that the only way to reach that goal is to be flexible. This is why Hilliard is willing to modify existing products, or develop new ones, respond quickly to requests, and take on complicated projects for other highly HILCO continuously improves cartridge performance as customer’s needs evolve sophisticated applications.

ASIAN POWER 5

News from asian-power.com Daily news from Asia most read

PROJECT

JERA eyes 50% stake in Compass’ gasfired thermal plants JERA plans to buy a 50% interest in three natural gas-fired thermal power generation plants or the “Compass Portfolio” in the US. The Compass Portfolio has an aggregate power generation capacity of 1,123MW. It includes the Marcus Hook Energy Center in Philadelphia, the Dighton, and the Milford Energy facilities in Massachusetts.

PROJECT

South Korean consortium to bid for 2 European nuclear projects Doosan Heavy Industries & Construction and Daewoo Engineering & Construction will take part in a bid led by Korea Hydro & Nuclear Power Corporation for the construction of two power plant projects in Czech Republic and Poland.

6 ASIAN POWER

IPP

Kyushu Electric curbs solar power supplies for the first time Kyushu Electric Power Co said it restricted its third-party solar power supplies over the weekend. This is the first time a Japanese utilities company has limited the use of renewable energy to avoid blackouts. The government had started to allow old utilities in 2015 to restrict supplies of renewable energy in order to maintain grid stability.

PROJECT

Doosan inks deal to build 2GW coalfired plant in Indonesia Doosan Heavy Industries signed an MoU with PT Indo Raya Tenaga for the construction of the two 1,000 MW Jawa 9 & 10 ultra-supercritical coal-fired power plants in Cilegon.

Total construction cost of the units is expected to amount $1.68b.

IPP

Tata Power joint venture gets letter of intent for 1,930MW coal plant The lenders of Prayagraj Power Generation Company, a 3X660MW coal-based power project based in Uttar Pradesh, have issued a letter of intent to Resurgent Power Ventures for acquisition of 75.01% stake in PPGCL. Resurgent Power is a joint venture based out of Singapore, and is held 26% by Tata Power through its whollyowned Singapore-based subsidiary.

IPP

J-Power and KEPCO buy 41% of 860MW UK offshore wind farm J-POWER and KEPCO bought a 41% stake in the large-scale Triton Knoll Offshore Wind Farm, operated by UK company innogy SE. J-Power will hold 25% of the farm, whilst KEPCO will hold 16%. Triton Knoll has a planned installed capacity of 860MW.

INTERVIEW

GE Power banks on aeroderivative gas turbines to rev up Asia’s renewables push Kazunari Fukui, Commercial Business Intelligence General Manager for Asia Pacific explains how their aero product line and in-house repair and maintenance services can help plug lapses in renewables and ensure grid stability. further reduce our cost in dollars per kWh. We keep pushing to lower the cost of ownership.

industrial type metals, we have lighterweight metals that are more durable when it comes to the heat cycling that occurs when you have to start and stop several times a day. That makes aeros more relevant in a cyclical, kind of renewable grid. So you can see 50 MW and within five minutes, you still have 50 MW with the gas turbines. That kind of resilient firming of renewable is a very important part of what aero will provide.

Kazunari Fukui Fukui, GE

W

ith Asia’s renewable energy capacity nearly doubling in the past five years to 918 GW in 2017, GE Power makes the case for its aeroderivative business as an effective solution to complement the region’s renewables agenda.

Drawn from aircraft engine technologies, the compact aeroderivative gas turbines can provide faster response times than their heavy industrial counterparts, making them suitable for smaller-scale energy generation. With the aeroderivative gas turbine industry poised to grow at an annual rate of nearly 5% from 2016-2020, GE has pledged to invest over $200m to enhance the service capabilities of its aero portfolio.

Asian Power was invited by GE to a one-on-one interview with Kazunari Fukui, commercial business intelligence general manager for Asia Pacific at GE’s Service Center in Houston, Texas, as he outlines the technology’s flexibility, reliability and faster-ramp up features.

AP: How do GE’s aeroderivative gas turbines respond to Asia’s energy needs?

KF: Not only is aero cost-effective when it comes to back-up power because it has a low maintenance cost than other types of equipment - we also have a lot of flexibility. Where they use more heavy

AP: Is there any particular reason why you chose Houston as the location to service the largest volume of aeroderivative gas turbine orders ? How does it benefit farther regions like the Asia Pacific?

KF: There’s a lot of history with this being the original facility dating back to 1985 – there’s that aspect. We take all the North America, Canada volume plus all the Latin America volume to the Houston Service Center. Then we have smaller centers that service areas like Europe, Asia, Middle East and Africa. It’s not that we’re North America focused; it’s because of the size of the fleet that we have to service in this hemisphere.

AP: Can you go over specific APAC markets where you’re looking to grow market share?

KF: Indonesia is one. We’re also hearing incentives in China for upgrading existing power generation to better, more efficient technology. Australia, interestingly enough, is one because they have a lot of ageing technology that was really tied to a lot of mining which is growing now where it hasn’t been growing for a lot of years. The mining industry has been growing a little bit so they need a little more power output.

AP: A number of competitors have similar technologies that are also working to capture the fast power market. Beyond the company’s aviation heritage, what are GE’s other strengths in this segment?

KF: When you talk about competitors, there’s few of them. Pratt & Whitney is one of the aviation heritage types in power generation but Mitsubishi has already bought Pratt & Whitney and they’re moving away from that technology.

Siemens has Rolls Royce but they’re not really focused on developing that aviation-heritage technology either as they’re more focused on the industrial side. The bigger competitors that we see would be Wärtsilä.

When you talk about power density perspective, it’s one of our gas turbines to several Wärtsilä receps. And so you need to have bigger infrastructure, bigger space, more land development for that same of power output. From a maintenance operational cost perspective, we’re comparable or less cost from a maintenance perspective than multiple receps on the same side.

As we move in our technology and begin to adopt the new aviation technology and things like that will

AP: What is a normal day like at the Houston Service Center? What are the usual concerns being lodged?

KF: They do about three engines a week in the shop roughly. A lot of it is the intake – the initial teardown and inspection, cleaning of the parts and then determining what needs to be done, what scope needs to be done on that engine.

From there, you start disassembling and moving the modules out for repair and you start putting the new hardware that you need to purchase and you can move on to the assembly.

That’s pretty much the day – intake, teardown, putting back together other engines and getting that engine out the door. It keeps the continuous flow of about three engines.

GE pledged to invest over $200m to enhance the service capabilities of its aero portfolio.

AP: What issues should power producers keep in mind to stay ahead of the game and, in your opinion, how can they best be addressed?

KF: For years, power producers have been very focused on non-investing and just trying to stretch out the length of time that their equipment would last. The new technology is more efficient, more capable than the older technology. They can save fuel, they can make more power [and] there’s ancillary markets where they could possibly make revenue that they aren’t necessarily looking at today.

Sandra Sendingan attended GE’s Aero Media Day 2018 at Houston Service Center in Texas, USA on 9-10 Oct. 2018.

ASIAN POWER 7

FIRST customers switching to new providers.

“The regulatory framework, although still relatively strong, is becoming less supportive, and intensifying competition is prompting customers to switch providers, whilst population decline and the push towards energy efficiency are pressuring electricity demand downwards,” added Moody’s vice president Mariko Semetko.

x LIBERALISED FUTURE A SOUTHEAST ASIA sINGAPORE

Hann Yeoh, executive director, PowerSeraya Dr Bikal Kumar Pokharel, WoodYTL Mackenzie

A

sian Power caught up with YTL PowerSeraya’s executive director as they prepare to compete in Singapore’s open electricity market with the launch of Geneco.

Can you tell us why and how YTL PowerSeraya decided to set up Geneco, and in Singapore first?

Geneco’s parent company, YTL PowerSeraya, is the second largest power generator in Singapore with 47 years of power generation expertise and 17 years of business-to-business energy retail experience.

With YTL PowerSeraya’s established position in the energy market, multi-utility business and strong power generating capacities, launching Geneco in Singapore was a logical choice. We launched Geneco in April 2018 in response to the liberalisation of the Singapore electricity market.

In October of the same year, YTL PowerSeraya consolidated both its business and consumer retail portfolios (previously Seraya Energy) under the Geneco brand.

What types of opportunities are there now that Singapore has opened up its retail electricity market?

Geneco welcomes the prospect of a healthy and competitive market. We’re looking forward to the opportunities this will bring to households and businesses.

The liberalisation gives companies like us a new opportunity to reach out to new segments of customers and with a better understanding of their profiles, we are able to customise and innovate energy solutions. This can also help us manage our overall portfolio as well.

What are the kinds of OEM-related challenges the company prepares for?

Geneco was one of the 14 retailers in the pilot launch of the OEM in Jurong, which happened this year earlier in April. From that, we’ve learnt that education and awareness are key for consumers to understand the benefits that the liberalisation of the retail electricity market brings – price-competitive plans and more options. This includes clarifying questions about switching retailers, such as whether it affects the reliability of electricity supply, as well as simplifying consumer choices.

In conversations with our customers, we’ve found out that apart from competitive prices, consumers look at the credibility of the retailer when making a decision. Some are worried that new entrants in the market may not be around for long, especially as competition heats.

8 ASIAN POWER

Nuclear safety costs have ballooned to $40b.

Utilities challenged by competition, credit risks

R JAPAN

ecent nuclear restarts in Japan have raised expectations that the electricity sector could return to its pre-Fukushima state, but plant operators are hit by challenges anew with safety and security measure costs that have already ballooned to $40b in July. Moreover, Moody’s Japan K.K. said that combined with increasing competition, a less supportive regulatory framework, and lower sales, these spell trouble for utilities that need to maintain their credit quality and financial stability.

Utilities giants Tokyo Electric Power (TEPCO), Kansai Electric Power (KEPCO), and Chubu Electric Power have already reportedly lost 5.7 million retail power customers who switched to new electricity providers since liberalisation in April 2016. They are becoming more “vulnerable to growing competitive pressures as the authorities implement further measures to deregulate the industry, leading to an erosion of the companies’ monopolistic positions,” Moody’s said.

Monopoly erosion Moody’s added that the degree of customer losses differs by geography, but the larger, more densely populated metropolitan areas with higher demand, and the regions where the more nuclearreliant utilities raised their tariffs significantly following the Fukushima accident in 2011 are seeing more

Utilities giants Tokyo Electric Power (TEPCO), Kansai Electric Power (KEPCO), and Chubu Electric Power reportedly have already lost 5.7 million retail power customers.

Tariff troubles Regulated tariffs, which allow for the utilities to cover all costs, will also eventually cease. Notably, solar feedin-tariffs (FIT) were already slashed by 14% to $17/kWh in February. The exact timing is not yet determined, but it will be sometime after 1 April 2020 when the Ministry of Economy, Trade and Industry determines that there is sufficient competition, such that the utilities will not be able to easily raise their tariffs, Moody’s said.

As a result, utilities are expected to react and improve their credit metrics. Some companies like TEPCO, J-POWER, and Chubu Electric have already made moves to spread their risks by expanding overseas, giving space for renewables in their offerings, and even merging their assets.

These new business opportunities could help offset the effects of the decline in electricity demand by providing material levels of cash flow, although they also carry greater over time risk than legacy regulated businesses, Moody’s added. “As a result, earnings and cash flows could become more volatile, whilst debt-funded investments could also weaken financial metrics,” Semetko said.

“Financial metrics will also become more important as the industry deregulates,” Moody’s said, adding that firms like Hokkaido Electric Power Company, Chugoku Electric Power Company, and Hokuriku Electric Power Company — which all already have weaker credit metrics — will be the most challenged to strengthen their financial ratios.

New electric retailers’ share in the market of consumers

Source: METI/ANRE“Monthly Report on Electricity Statistics”

FIRST - the equivalent of MOUs in other countries - have been issued to fast-track development of plants with total capacity of 3,111MW. As of 2016, the total capacity of gas has reached 1,824MW. Jeff Miller

Joo Yeow Lee

Myanmar is just 37% done with its electrification target.

Woes in Myanmar’s energy mix

I

myanmar

t has already been two years since Myanmar’s newly democratised government came to political power, but much to the frustration of energy firms, a new MOA or PPA has yet to be concluded to increase another kind of power in the country: electrical power.

As OWL Energy’s Greater Mekong manager Jeff Miller put it, “Nothing has been signed since democracy came.”

For the past 17 years, Myanmar’s electricity demand has more than doubled mostly due to hydropower, said IHS Markit senior research analyst Joo Yeow Lee. Installed hydropower capacity has grown five-fold since 2000 to 3,000MW in 2017. “However, this puts the system at risk to seasonal swings,” he added.

Moreover, further development has been met with strong public objections due to the displacement of communities, as well as the impact on livelihood and the environment.

Can it meet targets?

Myanmar has set its electrification target to 100%, and so far, it has reached 37% (one of the lowest in Southeast Asia), slightly higher from 30% in 2016. It currently has 5GW of installed capacity, mainly composed of hydropower and gas. According to Lee, capacity is set to grow as demand has risen from over 6TWh in 2010 to almost 16TWh in 2016, making the yearly rate 10%.

Lee is excited over Myanmar’s gas sector as four notices to proceed (NTP)

Edwin Vanderbruggen

Young government’s policy woes However, Miller said that this also raises questions on where the power will be sent. He added that these gas to power projects are far from where most the consumers are. “It’s going to need transmission lines as well,” he said.

“Gas and power plants are not fully operated due to poor maintenance,” he added. Reserves will also need five to 10 years to develop. “LNG is a short-term option, but gas laws need updating.”

There are also no policies to incentivise renewables. According to a note by Edwin Vanderbruggen of VDB Loi, the government is also still confused in implementing a furnished approval process, whilst NTPs can only serve to fast-track the completion of deals. “A lack of experience on the government side, and I suppose a lack of familiarity with Myanmar on the sponsor side, is a commonly held notion to explain the slow progress,” he said.

Myanmar’s power demand

Source: MOEE, IHS Markit

the CHARTIST: THE chartist: Can JAPAN’S Australia SOLAR INDUSTRY reach itsISgoal DIMMER of 50% WITHrenewable JUST 20GWelectricity PROJECTED TO

BY COME 2025? ONLINE Despite Japan’s suspended solar powerprogress sector will in expand its energy at policies, robust rates Australia through could tobe 2020 on track as a large to hit its x Australia’s renewable energy pipeline 50% backlog renewables of projects target supported in 2025by thanks feed-to additional in tariffs come installations online. After of over 2020, 10GW BMI of new solar Research and wind saidpower that the fortransition 2018-2019. to aThe demise reverseofauctions the National system Energy will slow Guarantee growth,saw as the theend Japanese of the fourth-best governmentoption looks to forregulate aligning climate capacity and additions energy policy, in order following to reduce earlier subsidy vetoes costs and by the support Coalition gridparty stability. room on carbon pricing, “We expect an emissions Japan to intensity register scheme, robust and solar the capacity clean energy growthtarget. through to 2020 as a result ofBut thethe implementation renewable energy of a substantial train just keeps on pipeline rolling.of Australia projectsadded that benefit a record from 2,200MW a of generous capacityfeed-in last year. tariff About support 7,200MW scheme. of large-scale Our forecast renewables is that outand of a3,200MW 50GW backlog of rooftop of such solar projects, will be only installed 20GW will in 2018-2019. actually This come new online, capacity as most is divided will not roughly be ableequally to between take advantage large-scale of the solar FiTPV, subsidies wind farms, amidand Source: ANU Energy Change Institute rooftop stringent solar government panels. About requirements 4,000MWand per Source: BMI Research year delays is currently in development, being installed. ” BMI Research added.

Deployment of large-scale (>0.1MW) systems x in Australia

Source: Clean Energy Regulator/ANU Energy Change Institute Source: BMI Research

ASIAN POWER 9

FIRST

Taiwan sets for windy shores

Asia Pacific offshore outlook 2017-2027e

$60b stranded assets Southeast Asia

A

taiwan

midst Taiwan’s move to shut down its nuclear plants, the country will be left with a power capacity gap of 5GW. Whilst the country currently relies heavily on coal and gas, Wood Mackenzie sees that it can also take the path of offshore wind to support its growing power demand. It placed Taiwan right next to power giant China in its forecast of top countries that will lead offshore wind installations in the Asia Pacific region.

Wood Mackenzie senior analyst Robert Liew said, “Taiwan presents the biggest offshore market in Asia Pacific, excluding China (APeC), due to a relatively stable regulatory regime, a supportive government, and openness to foreign investment.”

Amidst the forecast that Asia Pacific’s offshore wind capacity will rise 20-fold to 43GW in 2027, Taiwan is expected to account for 20% or 8.7GW of the total mix by 2027, making it the largest offshore wind market in APeC by 2020.

Mapping the plan Law firm Eiger has set out a map of Taiwan’s offshore wind farm projects following the country’s plan to develop them in the Taiwan Strait. Apart from three original projects, about 36 zones have been approved for plant WATCH

Source: Wood Mackenzie forecast

development by the Bureau of Energy.

It commented, “The government’s goals are quite aggressive – 500 MW to be commissioned in 2020, an additional 5 GW to be commissioned in 2021 to 2025, and more to follow in 2026 to 2030.”

“As a result, events are unfolding rapidly,” it added. “It is difficult for interested parties to keep up with the ‘big picture’ as it develops.”

Taiwan is one of the a few markets in the Asia Pacific that have set ambitious offshore wind targets due to declining prices. Liew commented, “Not every market is set for success as a stable domestic offshore supply chain and strong government support are needed to sustain growth in the long term.”

Liew noted that together with South Korea and Japan, East Asia needs around $37b in investments to meet the growth in offshore wind capacity over the next five years. “The good news is that prices are coming down,” he said.

Taiwan is expected to account for 20% or 8.7GW of the total mix by 2027, making it the largest offshore wind market in APeC by 2020.

Bangladesh’s largest LNG power plant

1.3GW Talcher coal plant upgrade OK’d

Australian hybrid project raises goals

BANGLADESH

India

Australia

Germany’s Siemens AG and Bangladesh’s state-run North-West Power Generation Company Ltd (NWPGCL) inked a joint development agreement to develop a 3,600MW power plant at Payra, southern Bangladesh that will run on regasified liquefied natural gas (LNG).

The plant will be the country’s largest and will cost around US$3b to build. It will adopt an integrated approach to LNG sourcing, procurement, transportation, regasification and delivery to plant, electricity generation and supply to the national grid.

10 ASIAN POWER

India’s NTPC has approved an investment of $1.35b for the 1,320MW third stage of the Talcher coal-fired power plant expansion (Angul district, state of Odisha, India).

The 1,320 MW expansion project will encompass two units of 660 MW and will help NTPC to reach its objective of becoming a 130 GW company by 2032. In the 2017-2018 fiscal year, NTPC added 3,478 MW of new capacity and currently has a total capacity of 53,651 MW most of which stem from 21 coal-fired and 7 gasfired, power plants.

Macquarie Group has invested in the wind-solar hybrid project in the Pilbara region, Australia. The plans for the project have also jumped from 9GW to 11GW. The project is planned by the Asia Renewable Energy Hub and is expected to provide energy to Southeast Asia and support a local manufacturing base in Northwest Australia.

Details of Macquarie’s investment were not disclosed.

AREH now plans for over 7.5GW of wind turbines and over 3.5GW of solar PV arrays, which are expected to generate over 40TwH of energy per annum.

Vietnam, Indonesia, and the Philippines are at risk

A

s much as $60b of coal assets could be stranded in the next decade across Vietnam, Indonesia, and the Philippines due to tighter environmental policies and competition from cheaper renewable energy, financial advocacy group Carbon Tracker said in a report. New wind and solar plants may become cheaper than coal in those countries, which are planning a combined $120b in coal investments by the end of next decade.

Against Indonesia’s $50b of coal capacity under construction or planned, as much as $34.7b of assets risk getting stranded. Against the Philippines’ $30b total investment, about $13.1b of assets are at risk.

Meanwhile, Vietnam currently has $40b of coal capacity under construction and planned, and as much as $11.7b of assets could get stranded. Moreover, the companies most at risk from stranded assets are PT PLN Persero (Indonesia) with $15b, San Miguel Corporation (Philippines) with $3.3b, and EVN (Vietnam) with a whopping $6.1b.

Southeast Asia is still highly dependent on coal.

From 2010-2017, coal generation increased 72% in Vietnam, over 50% in the Philippines, and 53% in Indonesia.

However, Carbon Tracker said new solar plants may become less costly than operating existing coal projects by 2027 in Vietnam, 2028 in Indonesia, and 2029 in the Philippines. Due to the rapidly declining cost of renewable energy, the average coal unit in these nations will be retired at just 15 years old, far earlier than fortyyear assumptions often associated with coal plant lifetimes, it added.

Draining the lifeblood Moreover, the lifeblood of coal power projects — investment — is being drained, albeit slowly.

Standard Chartered, RBS, and Nippon Life have announced their complete withdrawal from coal in the region. Analysts also at Citi saw an 80% reduction in coal financing 2010-2018, marking the increasing challenge in attracting cash for new projects.

According to Carbon Tracker head of power and utilities Matt Gray, this is likely to drive up coal prices, resulting in higher bills for consumers and utilities. The head commented, “Thanks to the dramatic fall in the cost of renewable energy, phasing-out coal power by 2040 will likely prove to be the lowest cost option for these Southeast Asian nations. Policymakers should act now, to avoid stranded coal assets as the rapid pace of the energy transition becomes increasingly apparent to investors.”

FIRST

Churning energy from large city waste INdonesia

Inez Rakhmani, ERM senior consultant

W

hen simple waste management no longer works to contain the garbage accumulating in Indonesia’s large cities, waste-to-energy (WTE) technology has the potential to turn trash to treasure, especially as more or less 70% of the 64 million tons of solid waste generated in the country each year is sent to substantially unsanitary landfills.

Currently available technologies, ranging from anaerobic digestion to plasma gasification, are now being used in regions like West Java and South Sulawesi. Notably, pyrolysis technology, which can create waste-plastic fuel oil, has reduced waste by up to 94% to 96.5% in a 2017 study. However, this is not without consequences like the emission air, which can affect the air quality of nearby neighbourhoods.

Asian Power caught up with ERM senior consultant Inez Rakhmani as she unveiled Indonesia’s “unlimited potential” for generating electricity using WTE technology-enabled power plants by tapping on municipal waste from its largely populous cities.

AP: What are the opportunities in Indonesia’s waste-to-energy technology?

Recently, the president has enacted a new regulation which means that lots of big cities in Indonesia can develop waste-to-energy power plants. Those cities are Jakarta, Bandu, Surabaya, Makasar, Depasar, as well as other cities that have

x regulatory hurdles

large landfill area.

This has been declared as the national strategy.

Currently, the government is trying to seek private investment opportunity from the French.

Some have already cooperated with countries such as Finland and Norway for waste-to-energy plant development.

AP: How can Indonesia address human resources issues and challenges to waste-toenergy technology?

We are trying to address human resources problems, because most [Indonesians] are not aware and do not have the right skills to develop this new power plant technology. We are seeking cooperation from other foreign countries especially those that have developed their own waste-to-energy technologies, such as Japan and the Danish government.

We are trying to transfer their technological expertise to our human resources through proper training programmes.

AP: What is your outlook towards waste-toenergy technology?

I believe it’s going to be a great future ahead, because the inputs of waste-to-energy technology will be unlimited. This is the case especially in big cities, because there are lots of municipal waste to be managed and most of it is not really [being used] through the traditional approach. That has a big potential for our country.

Rakhmani shared with us a piece about WTE’s potentially drastic effects, like the production of waste water and contamination of soil quality.

Moreover, human resources issues pose a problem to maximising and further developing the use of these technologies. Read more on Inez Rakhmani’s opinion “Indonesia’s approach to waste-to-energy technology” on page 38.

xxx INDONESIA

xxx Only 2% of its energy potential has been realised.

T

year 2017 been a good Asianhe Power talkedmight to YTLhave Power International yearCEO for record forYeoh Indonesian Berhad’s Tan Srideals Francis about the renewables, the country was not able company’s largestbut projects. to keep this momentum as only 2% or 9.07GW of booming renewable energy potential Tellitsus about the company’s most stellarof 441.7GW has been But what they killed are power projects to realised. date and where Indonesia’s located. energy deal fever?

Devine, theconstructing foreign legalthe consultant for AtLuke present, we are first oil shale Hadiputranto, Hadinoto Partners, said that mine mouth power plant&with a capacity of 2 x Indonesia is also plagued procurement rule 235 MW (net) utilising thebycirculating fluidised changes, local content, the 10% intermittency bed boilers (CFB) technology in the Hashemite on grid policy, and the pressures tariffs,at power Kingdom of Jordan.

The project isonlocated plant agreement (PPA), and is the weak Attarat um Guhdran which 110 kmrupiah. southeast “Procurement reforms have brought it is of Amman. At process a total investment of US$2.1b, renewable (IPP) a the largest independent private sectorpower projectretailers in Jordan to to date stop,” Devine said. and is expected to meet 15% of Jordan’s annual He noted that whilst in October 2017, IPPs electricity demand.

Attarat Power Company from solar PV, hybrid, wind, biomass, (APCO) which is the project companybiogas, has entered municipal waste, and Purchase tidal waveAgreement sectors were into a 30-year Power (PPA) part selectionnational process,utility by the time of April with of thethe Jordanian and single 2018, IPPsfor in the hydropower and geothermal buyer, only NEPCO sale of the entire electric were accepted.

BPP, oroutput. the regional electricity capacity and netThe electrical The other generation cost, for eachdeveloping distributionis system have project we are currently in Cirebon also increased impact ofThe sustained Regency, Westand Java,the Indonesia.

2 x 660high MW coal havepower been felt upwill until 2017. (net)prices coal-fired plant utilise state-ofDevine cited areas like technology.

Belitung where BPP the-art ultra-supercritical Thethe project grew fromPT 15.75 cents/kWh to nearly 20 cents/ company, Tanjung Jati Power Company has kWh. Theacosts arePurchase significantly higher than executed Power Agreement (PPA)the national BPP (Persero) of 7.66 cents/kWh. Devine with PT PLN in December 2015.said Wethat there was only some activity non-PLN offtake are always on the lookout forinnew opportunities renewables, are onlyfor small-scale in generationhowever, whetherthey it is bidding existing and slow-going. assets or investing in new projects.

INDIA

Will making room for biomass satiate Indian power plants’ hunger for coal?

Some Indian power plant developers have stopped crying for help over the “shortage” of coal as 10,500MW of plants have already closed, especially in areas where the resource is difficult to transport. To address the issue, the government has encouraged both firms in the public and private sector to include biomass in at least 5-10% of their energy mix.

This seemed convenient enough for state-owned NTPC, which has recently enforced biomass to take up 7% of the fuel which fires up their plants. The objective behind the move is to reduce air pollution by creating an alternate market for its large-scale utilisation in power plants, an official said. NTPC has already used a 7% blend of biomass for co-firing at its Dadri power plant.

“NTPC’s decision to implement biomass-based co-firing at all its power stations is a bold move that will help in curtailing air pollution,” said GlobalData power analyst Harminder Singh. “With India cities experiencing significant levels of smog in the winter months, it makes a lot of sense to co-fire biomass 12 ASIAN POWER

along with coal in the coal-fired power plants.”

The analyst added that using biomass could reduce the coal requirements of these plants and help ease the current pressure on coal-sourcing.

NTPC has a total coal-based capacity of more than 40GW and assuming all its power stations use 7% biomass blend, the company itself can utilise 10-12 million tonnes of biomass, which is around onethird of the residue burnt.

However, biomass logistics is a big challenge that has restricted the growth of this industry. “The availability of biomass is localised and the economics of transporting biomass work out only over a certain distance,” Singh added.

The existing power plant infrastructure cannot utilise biomass directly, so it will need to be converted into pellets. “Whilst this reduces the transportation cost, the pellet manufacturing industry is not so well-developed in India.

However, this can prove to be an opportunity for entrepreneurs looking to enter this industry,” the analyst concluded.

India coal stocks, May 2015-March 2018

Source: IPR Analysis, India coal ministry data

EVENT COVERAGE: SIEMENS EGYPT MEGAPROJECT Siemens, together with their local partners, has broken every record for the execution of a modern, fast-track power project. Just 27.5 months after signing the contracts, the company was able to deliver 14.4GW of power to Egypt.

66,000 workers were trained for a Zero Harm culture.

Mega project in Egypt changes Siemens’ global strategy Siemens conquers and fast-tracks the largest power project in Egypt, delivering 14.4GW of power in a span of 27.5 months.

T

he impetus to take action in the energy sector in Egypt began with the power supply crisis in 2014. Energy was at the heart of the problems; a huge gap between energy generation and demand, regular daily power cuts and blackouts, were exacerbating economic problems.

A perceived solution came in an ambitious joint project between the Egyptian government and Siemens to build mega power projects that would provide solutions to the crisis situation.

Only a few years later, the successes of the mega projects in Egypt has enabled Siemens’ global strategy to flourish.

Emad Ghaly, Siemens Egypt’s CEO added, “This is the largest project in the history of Siemens and its success has given us the confidence to think bigger. Building confidence and coverage has helped us position ourselves as a large, global infrastructure provider of integrated solutions.”

Powerful solutions The president of Egypt, Abdel Fattah el-Sisi, committed himself to solve the energy problem by building at least 10GW in three years before his reelection mid 2018. This commitment has been exceeded. Starting the ball rolling in Sharm el Sheikh, Egypt, March 2015, then following up at the Economic Development Conference Berlin, Germany, June 2015, contracts worth were signed worth EU6b.

The first challenge in any energy project

The resulting three 4.8GW power plants are the largest gas-fired combined cycle plants ever built and operated.

is obtaining the financing needed for the development; generation, transmission and distribution. An appropriate strategic approach was needed to avoid bureaucracy and ensure a fast execution.

Overcoming challenges EPC and finance were used instead of tendering separate packages. Siemens and local Egyptian partners Orascom and ElSewedy facilitated a competitive loan agreement backed by the German Government, represented by the German Export Credit Agency Euler Hermes and Italian Export Credit Agency SACE. The projects are financed by a consortium of more than 30 international banks.

The ambitious agenda to revamp of the entire energy sector in Egypt began with the delivery of the first key components to Egypt in March 2016. Training of 600 Egyptian engineers and technicians began the next month.

Beni Suef is the leading site of the three combined cycle power plants with three EPC turnkey projects of CCPP 4.8GW each. State-of-art technology using H-Class gas turbines enabled high combined-cycle efficiency of more than 61%. Natural gas-fired combined cycle power plants, backup oil fuel for one module per plant.

A 45% increase in Egypt’s power capacity was achieved providing 14.4GW of electricity to 45 million Egyptians. This ‘Win-Win’ for Egypt and Germany was enabled through local partners Orascom and Elsewedy.

Setting new records A single combined cycle power-plant block with a capacity of 1,200MW typically takes about 30 months to build.

Siemens built 12 of these blocks in record time and connected them to the grid in March 2017. The resulting three 4.8GW power plants are the largest gas-fired combined cycle plants ever built and operated in the world.

Such a keystone project could not be sustainable without security awareness.

Cyber security is managed by a separate department. The operating set-up included paperless documentation; a digital technical documentation platform, independent collaboration with any device and any browser, on– and offline accessibility via cloud and App. Customers can see the documentation building up as the project progresses.

With extensive search functionalities users can find documentation easily.

Data protection is ensured by two-step authentication and with a huge storage capacity; the power plant documentation is readily at hand on- and offline.

Zero Harm concept From the start, educating the local workforce was viewed as key for the success of the project. Building the relevant competencies in local staff required to construct and maintain the megaproject and other power projects.

Training is provided to future power plant workers, around 600 engineers & technicians during six months in Egypt & Germany. The focus is on personal & technical development.

Siemens developed several vocational training centres including a customized EHS Training Center to overcome the challenging construction environment.

About 66,000 workers have been trained in HSE during the projects execution to promote a ‘Zero Harm’ culture.

The long road to sustainable economic development in Egypt has been shortened, significantly. A bold initiative based on economic needs has been implemented effectively, all in record time. The benefits to Egypt and its people, local industry and economy and international partnerships are immense.

Record breaking project work has also influenced a globally leading company’s own strategy.

Jonathan di Rollo attended Siemens Press Trip Megaproject Egypt 2018 at Cairo, Egypt on 21-23 Oct. 2018 ASIAN POWER 13

We have collaborations with foreign partners for the operations of our 2,260MW capacity, but again, we would always like to grow further into both local and international regions, especially some other Asian countries.

Mohammad Effendi President director Adaro Power

CEO INTERVIEW

Adaro Power taps Japan, Korea for 2GW capacity President director Mohammad Effendi shares how the company, a mining giant’s subsidiary, has linked with Japan and Korea to give 2.26GW of power to remote areas and how it works on a renewable future through 100kW solar cells.

A

midst Indonesia’s push for an additional capacity of 50-55GW in the next 10 years, many power players are looking for ways to install and innovate power plants and reach more consumers, especially in the untapped areas and cities distant from the country’s capital. One of these firms is Adaro Power, the subsidiary of mining giant Adaro Energy, which was built in 2010 to help the parent firm diversify into the development of power plants.

Asian Power caught up with the president director of Adaro Power, Mohammad Effendi as he discusses the progress of their work. The company has a 2,260MW portfolio of coal plants in South Kalimantan and other areas built with the support of utilities giants in Japan and South Korea.

Effendi has set ambitious goals for the company, including building and owning power plants with a total of 20,000MW capacity. We also found out that the company is developing 100kW solar cells to prepare the company for Indonesia’s shift towards renewables.

The executive also goes to add his thoughts on why their expectations for Indonesia’s electricity demand are not being met and the future flow of investment in Indonesia’s power sector.

Moreover, Effendi shares his perspective as a head of a company that is being run in cooperation with the government. This includes looking out for PLN’s demand for power and his goals for PT Adaro Power to add renewables in the company’s current energy mix.

Can you tell us what you’re doing for Adaro Power and how it came to be? What kinds of projects are your company working on currently?

I’m the president director of Adaro Power, a subsidiary of Adaro Energy, which is mainly one of the largest coal-mining companies in Indonesia. Starting from 2010, Adaro Energy started its diversification into power generation, that’s why Adaro Power was established at that time.

So far, the capacity of our power operation is at 2,260MW, which is mainly coming from coal. About 2,000MW comes from a project that was built in cooperation with three of our current business partners.

This first project is being built with J-POWER, AP, and Itochu Corporation from Japan. It has currently hit 55% in terms of the progress of completion.

Second, we have the 2x100MW powerplant in South Kalimantan. For that one, we have a partner named East West Power, from South Korea. Currently, it has hit more than 95% of completion. It will be operational in the first quarter next year.

From the start (of PT Adaro Power), we have a 2x30MW minemouth power plant in Tanjung, South Kalimantan. The operation and generation is 100% owned by us. The plant is already in operation for more or less five years.

Does the company have a plan to include renewables in its current energy mix?

We are now developing a 100kW solar power cell, which is still very small, because there is no demand from PLN. Currently, it is being utilised for our own use. This is only to prove that we have the readiness to move into renewables whenever there is a requirement for it.

Can you tell us your current observations on the Indonesian power industry?

First, when we hear the explanation from the Minister, in 2018,

Indonesia has a capacity of more or less 66GW from PLN. The intention is that for the next 10 years, there will be an additional 50-55GW. This means that there is an opportunity to have another additional capacity.

We know that from the 55GW capacity, some of it is going to come from private independent power producers (IPP). The only thing is that, currently, it looks like that the demand of electricity is not as big as expected in Indonesia.

What happened and why is demand not as large as the industry had expected? What challenges and opportunities are there for power players?

Apparently, Indonesia’s transmission lines are not yet connected.

For the time being, there is a little bit of rescheduling on the creation of additional capacity. However, I can see that in the future, there is a demand for additional power in Indonesia.

In your opinion, which power sources are currently good for investments in Indonesia?

The biggest energy source for fuel-driven power plants is coal. But there is also the intention from the government that in the next 10 years, we should be able to add renewables to 23% of the national mix of energy. Looking at that, then there is a probability that there will be an expansion of the additional renewables-driven power plants.

What are your current goals for renewable energy? How do you view geothermal energy, which is widely used in Indonesia?

If I look at it now, then the biggest possibility (for us) is either to get power from geothermal, or from solar cells, or some other sources like biomass. It is also applicable.

The only thing is that at the moment, the solar cell, because it should be scattered, then there is a technical issue that has to be handled first. Meaning, before the process of the scattering of small solar cells and connecting to the grid, there are technical issues that have to be overcome first. That is one of the big opportunities for renewables.

Geothermal energy is also good, but it involves exploration.

The challenge during exploration is knowing whether we will get enough capacity or not.

Can you share your current goals for PT Adaro Power? Do you have plans to expand?

At the moment, we have collaborations with foreign partners for the operations of our 2,260MW capacity. But again, we would always like to grow further into both local and international regions, especially some other Asian countries.

Whenever that is a possibility, we will also participate outside Indonesia. But again, we have to wait for the instruction or from the government or from PLN, of course.

Do you have anything else you want to add?

As already mentioned by the vice president, electricity is really required for the country to grow. At this moment, there is a doubt.

Some are saying that the demand is not as much we expect, meaning that if there is an additional capacity, there is a concern whether it will be taken out or not. But again, if the PLN is able to make good transmission lines, this means the power can be made available and can be spread out.

That will be drive the electricity industry to grow and generate demand again. I hope by having that, then demand for electricity will increase again.

ASIAN POWER 15

SECTOR REPORT: COAL

Coal could still be important to Asia in the next decade

Coal seeks significance as Asia eyes shift to renewables Coal investments in Asia are still expected to grow by $250b in the next decade, but IPPs have begun to hesitate on greenfield projects as renewables take centre stage.

A

sia is bucking the trend of the general decline in financial support for coal-fired power projects, as WoodMackenzie projected at the beginning of 2018 that investment in the region can still grow over $250b in the next decade. This reflects the need to support Southeast Asia’s power demand, which is expected to grow 4.6% per annum, the firm said.

Coal is still important in firing up power plants in Asia as governments tend to prioritise energy security and affordability of electricity. As a result, Wood Mackenzie said that the tightening of export credit agencies’ (ECA) financing terms is still milder for emerging markets in Asia.

“The new ECA rules will not apply to projects that have already finished detailed feasibility studies, environmental assessment or requests for proposal before the rules came into force on 1 January 2017. The new ECA rules also make exceptions for markets such as Indonesia, Cambodia, Laos, Myanmar, the Philippines, and South Asian and Central Asian countries because they are classified as low national electrification rate countries per the IEA criteria,” it said.

However, Ian Fox, the CEO of independent power producer (IPP) Leader Energy, whose company has two coal-fired projects in Cambodia, said he will have to take a pause when asked to do a greenfield investment for coal. Private equity firms and funds are backing

16 ASIAN POWER

Wood Mackenzie projected at the beginning of 2018 that coal investment can still grow over $250b in the next decade.

away from coal, making it eventually “disadvantageous” to have coal in one’s portfolio, he added.

“I’m hesitant to do more coal,” he admitted during a panel session centred on coal versus renewables in this year’s Power-Gen Asia. Despite this, another speaker, Bloomberg Intelligence’s senior analyst Joseph Jacobelli still reiterated that the bulk of Asian countries are concerned about affordability, thus the tendency to stick to coal projects. “Energy security is absolutely primordial in Japan, Korea, and even China,” Jacobelli said and added that not a lot of Asian countries prioritse climate change in their agenda.

However, the Institute for Energy Economics and Financial Analysis (IEEFA) has observed in August that Japan’s financiers are backing away from coal, albeit slowly, following increased opposition within the government. Big names like Mitsui Financial Group, as

well as Mizuho and MUFG, expressed that they are rethinking their stance towards coal.

Since 2012, 50 new coal-fired power plants have been proposed in Japan.

However, an increasing number of these proposals have been taken off the table and the number of projects in the development pipeline has dropped to 35. To make up for the loss of these proposals, more companies have gotten into renewables, specifically solar PV, translating into domestic investment worth $20b to $30b a year.

Some panelists in Power-Gen Asia concurred with this. Fox said, “Solar is set to threaten coal’s position. If you project forward in 5-7 years, you’re gonna see that coal and renewable are going to work together. Coal will be the back-up fuel.”

Countries like Indonesia and India are eyeing the use of biomass as well not only to cut air pollution caused by coal plants but to address coal shortages in specific areas as well. Indonesia has slightly increased its goal of renewables share to 40.39%, although coal still takes a big bite from the expected energy mix at 50%.

Jisman P. Hutajulu, director of electricity at the Ministry of Energy and Mineral Resources (Indonesia) said the country can tap into biomass. “Indonesia has plenty of biomass reserves, we try to encourage the use of biomass energy. We have regulation of the price, we also try to adjust that with the principle cost of provision,” he said. This means that the government tries to do cross-subsidy, so that low biomass reserves will have higher price, whilst those with high biomass reserves will have lower prices.

India’s state-run NTPC also recently set the bar for its biomass usage at 7% across all its plants, following the advisory encouraging public and private utilities to use a 5-10% biomass blend for their facilities. This is response to increased pressure on coal sourcing, highlighted by the fact that 10,500MW of coal-fired power plants have shut down in areas where coal is difficult to deliver as owners have cited a shortage of the resource.

Written by Danielle Mae V. Isaac

G-20 financing for coal and renewable projects abroad, 2013-2016

Source: NRDC

Country report 1: Australia

If Australia can deploy wind and PV systems, it can supply 29% of renewable electricity in 2020.

Renewables grow as policies reach crossroads Over 10,400MW of renewables is likely to eat up 30% of peak demand in 2018-2019, leaving coal’s future hanging.

E

ven after Australia had switched between five prime ministers in just five years, the absence of a central energy policy remains, subjecting consumers to the mercy of 80-90% electrical price hikes for the past decade.

Clean energy advocates insist that shifting to solar and wind energy will lower power bills and reduce emissions even as pro-coal groups argue that investment in high-energy, low-emissions coal-fired power stations is the key to providing reliable and affordable power.

On one side of this contentious energy policy debate, some academics point to the strong growth momentum of solar PV systems and wind farms as a sign of

Australia will likely install about 10,400MW of new renewable energy in 2018 and 2019, representing 30% of the country’s peak electricity demand.

Annual PV and wind generation (TWh) and the consequent reduction in fossil generation

Source: ANU Energy Change Institute

18 ASIAN POWER

the shifting tides in favour of renewable energy. Australia will likely install about 10,400MW of new renewable energy in 2018 and 2019, representing 30% of the country’s peak electricity demand and comprising of 7,200MW of large-scale PV systems and wind farms together with 3,200MW of small-scale rooftop PV systems, according to paper written by researchers from The Energy Change Institute of the Australian National University (ANU).

“The Australian renewable energy industry is convincingly demonstrating its capacity to install large amounts of wind and PV systems,” said Ken Baldwin, one of the authors of the ANU paper. He added that if the industry can continue to deploy wind and PV at the current rate into 2020 and beyond, then Australia will be capable of supplying up to 29% renewable electricity in 2020, 50% in 2025, and 100% in the early 2030s. In addition, the country should be able to surpass its 2020 large-scale Renewable Energy Target, or RET, of 33,000GWh. The rapid cost reduction for renewable energy along with the RET has mainly driven the upswing in renewable energy projects such as solar and wind farms, according to analysts. Under the largescale RET scheme, the government has set financial incentives for creating

or expanding renewable energy power stations such as wind and solar farms or hydroelectric power stations.

Falling wind, solar costs Baldwin said the current deployment rate of renewable energy in Australia could continue on the back of a rapid decline in wind and PV prices as well as the fact that more companies recognise the economic and environmental benefits of renewable energy. Greg Jarvis, Origin Energy’s head of energy trading and operations, had reportedly estimated in early October that the cost of solar was at the mid-$40s/ MWh whilst the cost of wind was at the low-$50s/MWh, having declined to the point of being cheaper than the marginal cost of coal generation.

“Wind and solar prices have fallen significantly in the past decade and they are now the cheapest type of new-build generation – far cheaper than a new coal power station,” Greg Bourne, climate councillor at the Climate Council of Australia, said. “Even without considering the benefits of dramatically reduced emissions and other pollutants (such as better health outcomes), new wind and solar are cost competitive with new gas power stations, particularly as the price of gas has increased.”

China-based renewables developer

Country report 1: Australia Australians saying they would choose a product or service made with renewable energy over a product that is not.

Australia renewable energy generation

Ken Baldwin

Source: NEM Watch, Australian Energy Statistics, ARENA, Clean Energy Council Renewable Energy Database, SunWiz

Goldwind has been leading the charge in constructing large-scale projects. In September, it began construction on what is set to become Australia’s biggest and one of its lowest cost wind energy projects, the 530MW Stockyard Hill wind farm in western Victoria. The company is also currently working the Moorabool wind farm in Victoria and Cattle Hill wind farm in Tasmania.

In total, Goldwind is offering a portfolio of more than 1GW of wind and solar colocation projects as well as wind projects across Queensland, Western Australia and Tasmania, which is expected to have a value of A$3b after project construction. The company said the sales process will target existing participants and new entrants to the Australian renewables market.

Australian firm Acciona has also invested A$288m in the 157.5MW Mortlake South wind farm, its fifth in the country and which is expected to boost the company’s renewable energy capacity in the country by 36%. Construction is scheduled to start in early 2019 and finish by mid-2020.

Another factor that has buoyed renewable energy is the upswing in business demand, with some firms even venturing into setting up their own solar and wind projects as a long-term investment to cut down on energy costs.

“Businesses are taking control of their energy use by installing renewable energy and generating their own electricity,” Bourne noted. “Renewables are so affordable that by building, contracting or investing in new wind and solar power plants, businesses can significantly reduce their reliance on grid electricity, reducing exposure to volatile electricity prices and future price hikes.”

Bourne said Australia is experiencing a boom in renewable energy, with over 5,000MW of renewable energy projects like wind and solar farms under construction in 2018. He noted that agricultural organisations and food

producers, wholesalers and warehouses, manufacturers and healthcare facilities have been more keen in installing rooftop solar in a bid to reduce their power bill.

The beer company Carlton & United Breweries has signed a power purchase agreement to buy renewable energy from the 112MW Karadoc solar farm near Mildura, providing most of the firm’s power needs for 12 years. Meanwhile, Nectar Farms, an agricultural business that is constructing a new vegetable greenhouse in regional Victoria, is also building a 196MW wind farm and a 20MW batter called the Bulgana Green power Hub, a partially-funded project by the Victorian government and is scheduled for completion in 2019.

Businesses warm up to renewables “The rising cost of energy is the leading concern for Australian businesses over the next ten years,” said Bourne, citing how gas prices have tripled in the past five years whilst electricity prices for residential and small business users have jumped 80% to 90% in a decade.

He added that Australia has very high electricity prices that are above the EU average and more than twice as high as the US, based on Bloomberg data.

Bourne attributed Australia’s electricity prices to overinvestment by distribution companies in the poles and wires of the electricity network, as well as an increase in gas exports, a lack of competition and energy policy uncertainty.

Australian businesses are turning to renewable energy in a bid to lower their power bills, the Climate Council of Australia concurred. Nearly half of major companies are actively procuring renewable energy and total solar business have risen by 60% over 2016 and 2017, with over 40,000 commercial systems installed across the country.

The use of renewables has received strong public support, with 80% of Australians believing big business should be using renewable energy and 76% of

Greg Jarvis

Greg Bourne

Frank Jotzo

The future of coal?

Pro-coal groups, meanwhile, have been pushing for the government to instead build new high-efficiency coal plants, as well as make full use of the Latrobe Valley’s brown coal reserves. They have argued that this approach provides both power reliability and affordability and generates much-needed jobs.

The Minerals Council of Australia said the coal industry employed around 46,000 workers in 2017, and supported an additional 120,000 indirect jobs.

In 2016-2017, the country exported 202 Mt of thermal coal worth $18.9b, and the Council said Australian coal’s high-energy, low ash traits made it ideal for the requirements of high-energy, low-emissions coal-fired power plants.

It added that coal remains the dominant source of energy, providing 89% of power in New South Wales, 85% in Queensland and 82% in Victoria.

However, Frank Jotzo, director for the Centre for Climate Economics and Policy, Crawford School of Public Policy at the Australian National University, reckoned renewables are “stealing the march” over coal, and that the international outlook paints a lower coal demand.

“This change now reflects market economics. New wind farms and solar parks can now provide energy at much lower cost than any new fossil fuel powered generators. A new-coal fired power plant would need subsidies, take a long time to build, and suffer exposure to future carbon policy,” the director added.

Coal plants could become less profitable and tend to be shut down earlier, typically in the face of major repairs or overhauls. He added that Australia’s system does not need coal plants to run reliably, so a combination of regionally dispersed renewables, pumped hydro and battery storage, gas plants, and demand response should suffice. “[Coal] will not be able to sell as much power, and get lower prices on average for every MWh of electricity produced.

New wind and solar is now contracted at prices close to the operating cost of some existing coal plants, and renewables costs are falling further,” said Jotzo.

Including the Hazelwood power station, 10 of Australia’s coal stations have already shut down in the past six years, with at least eight more expected to close by 2040. Private investors are factoring in these risks, including the fact that a new coal station built in the coming years will need to continue operating well beyond 2050 in order to achieve a return on investment, Bourne noted.

ASIAN POWER 19

COUNTRY REPORT 1: VIETNAM

Vietnam’s renewables deals are stuck at pre-investment

Making ends meet for Vietnam’s growing energy sector Coal takes centre stage with 35% market share, whilst renewables deals are stuck at pre-investment even with electricity demand poised to grow by 8% until 2025.

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As Vietnam’s energy sector expands, the role of the private sector and foreign investment is increasing, taking the form of buildoperate-transfer (BOT). Some newly licensed BOTs include Nam Dinh 1 and Van Phong 1, with a number of BOT projects currently being negotiated, including Quang Tri 1 and Song Hau 2.

After the southern region suffered a severe energy shortage of 15 billion kWh in the last year, the government has been pressured to to find solutions to the country’s energy problems.

Energy demand is anticipated to grow 10% annually, with electricity demand accounting for most of it. In fact, electricity demand is expected to grow at 8% annually until 2035.

Power-hungry Vietnam has been the result of increasing industrialisation and positive economic growth in the last decade. Households may have reduced their share thanks to energy efficiency, whilst the industry and construction sectors is expected to remain as the country’s leading power consumers.

With the widening gap between demand and supply, the country has to avoid a quick fix and seek a sustainable long-term solution. However, the Revised National Power Master Plan (PDP VII) highlights coal as the main contributor to the future expansion of capacity, trumping hydropower as the primary source of generation.

In 2017, 37% of electricity generation came from hydropower, a little more than

20 ASIAN POWER

From 2000 to 2015, biomass and hydro’s share in the total primary energy supply dropped to 24% from 53% as coal share grew from 14% to 35%.

the 34% from coal energy. Over the next few years, the country’s fossil import will likely increase due to Vietnam’s limited domestic oil and coal resources. StoxPlus analysts said coal imports have rapidly increased due to some coal thermal power plants being put into operation.

Vietnam pinned greater hopes on coal as an energy resource. The first three months of 2018 saw over 3 million tonnes of coal imported, amounting to $384m.

The number of coal thermal power plants has reached 19, with several companies under Vietnam Electricity (EVN) proposing the import of coal to save costs.

In 2000 to 2015, biomass and hydro’s share in the total primary energy supply dropped to 24% from 53% even as coal share grew from 14% to 35% of the supply. Vietnam has 20 coal-fired power plants with a total capacity of over 13,000MW. S&P Global Platts also reported that Vietnam’s coal imports hit a Vietnam’s installed capacity

Source: IHS Markit

record of 2.25 million tonnes this year, up 132.5% YoY. Despite the PDP VII planning for increased renewables in the country’s energy mix whilst reducing that of hydropower and gas, majority of renewable energy projects are stuck at the pre-investment stage, taking long months, and multiple agreements to go through each stage. Vinh Quoc Nguyen, partner, Tilleke and Gibbins, said that except hydropower, other renewable sources like solar and wind are in a very early stage.

Decision 2068 has set out several non-binding targets, such as the ratio of renewable energy to total consumer primary energy at 31% in 2020, 32.3% in 2030, and 44% in 2050. Volumes are expected to reach 101 billion kWh in 2020, 186 billion kWh in 2030, and 452 billion kWh in 2050.

“The main obstacles to the development of renewable energy include: lack of capital funding; the price offered to renewable power producers is low, whilst investment costs for production of renewable energy are high, which is not attractive to investors,” said Nguyen.

“EVN has no motivation to purchase the electricity from the renewable energy generators at a higher price, as it is reportedly selling the generated electricity to consumers at a loss and the lack of human resources specialising in RE.” Analysts place coal and natural gas as the second and third largest source of electricity generation in the country.

However, hydropower, which is the main source, and natural gas are already reaching full capacity, leaving Vietnam with coal as the solution to short-term woes.

The total capacity of foreign-invested power producers accounted for 2,800MW in 2015, and has continued to increase over the last three years. At present, EVN acts as a single buyer of all electricity generated from on-grid independent power projects. Going forward, the Vietnamese government aims to divide EVN-owned power plants and generation companies into independent generators, wholesalers, and retailers.

REFRESHING LIFE WITH GREEN ENERGY China Resources Power Holdings Co.,Ltd. (CR Power) was founded in August 2001. The Company is among the most efficient and profitable integrated energy companies in China. It also acts as a flagship company listed in Hong Kong for China Resources Holdings Co.,Ltd.(CRC),which is a Fortune 500 company.

Its business primarily covers thermal power, wind power, hydropower, photovoltaic power generation and distributed energy.

CR Power was listed on the Main Board of the Hong Kong Stock Exchange on November 12,2003 (stock code: 0836.HK). In March 2004, CR Power was added to the Hang Seng Composite Industry Index (Utilities) and the Hang Seng China-Affiliated Corporations Index.

In May 2005, CR Power was included into the Morgan Stanley Capital International (MSCI) China Index. On June 8, 2009, the Company formally became one of the constituent stocks of the Hang Seng Index (Blue-chip stock).

As at the end of 2017, CR Power’s total assets amounted to HK$220.972 billion and its attributable operational generation capacity amounted to approximately 41,620 MW. It covers 28 provinces, municipalities and autonomous regions.

For the eleventh consecutive year, CR Power was named in the Platt’s Top 250 Global Energy Companies and listed in Forbes Global 2,000, ranking 71st and 775th respectively.

Since its establishment, CR Power has been a strategy-driven enterprise, and saw a fast and solid development in the past decade due to its clear strategy and efficient execution.

In the next five years, CR Power is going to focus on green energy development, greatly enhance the mix of clean energy, develop highquality thermal power, optimize coal assets, and actively tap into the electricity retail business.

CR Power is also searching for opportunities in overseas energy markets and cultivating new profit growth opportunities by extending its value chain.

CR Power looks forward to working with stakeholders hand-in-hand and implementing the responsibility, as well as pursuing of “Refreshing Life with Green Energy”, so as to establish CR Power as an excellent and sustainable international energy company.

Website: www.cr-power.com

Find out who emerged as the victors in the Asian Power Awards 2018

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ver a hundred senior executives and prime industry figures flocked to The Ritz Carlton - Mega Kuningan, Jakarta on September 19 for the Asian Power Awards 2018. The gala night featured 71 awards this year as nominations jumped to 150.

The awards were judged by John Yeap, partner, head of Energy – Asia at Pinsent Masons; and Mark Hutchinson, VP, head of Gas & Power Consulting; Asia Pacific Wood Mackenzie; Mike Thomas, partner at The Lantau Group; Petteri Harkki, regional director for Asia of Poyry; and Gervasius Samosir, associate partner of Solidiance.

Asian Power publisher Tim Charlton congratulated the awardees, saying, “On behalf of the Asian Power team, we are humbled and again grateful for spending your time with us tonight. We are honored to turn the spotlight on 2018’s key players who bested others in their drive for sustainability by amping up their projects’ efficiency and productivity.”

Check out this year’s winners:

• Silver - TEPCO’s Collaboration with Entrepreneurs to Accelerate Virtual PPA by TRENDE Inc. • Bronze - Implementation of SAP on HANA at OPGC by Odisha Power Generation Corporation Nuclear Power Project of the Year • Gold - Modernization and Generator Upgrading at Kuosheng Nuclear Power Plant by Taiwan Power Company Power Plant Upgrade of the Year • Gold - RATCH-Australia Townsville Pty Ltd powered by Emerson • Silver - Tung Hsiao Power Plant Renewal Project by Taiwan Power Company • Bronze - KOREA EAST-WEST POWER CO.,LTD. Ulsan Combined Cycle Power Plant #1 DCS Migration powered by Emerson Solar Power Project of the Year • Gold - Phase 3 of the Mohammed bin Rashid Al Maktoum Solar Park, Dubai, United Arab Emirates by Masdar • Silver - VELTOOR Solar plant by CLP India Pvt. Ltd. • Bronze - Shuaa Energy-1 by ACWA Power • Bangladesh - Technaf Solartech Energy Limited (TSEL) - 28MW utility scale project in Bangladesh powered by PROINSO and Joules Power Limited • Indonesia - Vena Energy Solar Power Plants by Vena Energy • Malaysia - Floating Solar System on Water Retention Dam by CYPARK RESOURCES BERHAD • Philippines - Paluan 2 MW Solar-Battery Micro-Grid by Solar Philippines

Coal Power Project of the Year

Standby Power Plant of the Year

• Gold - Huaneng Laiwu Power Generation Co., Ltd. powered by Emerson • Silver - Simpang Belimbing Coal Fired Power Plant 2 x 150 MW project

by PT. GH EMM Indonesia & China Energy Investment Corporation • Bronze - Avoiding Increase Maintenance Costs With Reservation Protection Turbine Trip in Paiton Unit 1&2 by PT PEMBANGKITAN JAWA-BALI

• Gold - Tianshan Aluminum Co.,LTD. POWERED BY EMERSON

Dual Fuel Power Plant of the Year • Gold - Mobile Power Plant and Fixed Type Gas Engine Power Plant Package VIII - Jayapura and Kendari powered

by Consortium of PT PP (PERSERO) TBK AND WÄRTSILÄ • Silver - Paluan 2 MW Solar-Battery Micro-Grid by Solar Philippines Fast-Track Power Plant of the Year • Gold - Tsetsii Wind Farm powered by Vestas Asia Pacific • Silver - Summit Gazipur II 300 MW Power Plant

by Summit Gazipur II Power Limited • Bronze - Kalsel-1 2x100 MW Coal Fired Steam Power Plant Project by PT Tanjung Power Indonesia Gas Power Project of the Year • Gold - Tung Hsiao Power Plant Renewal Project byTaiwan Power Company • Silver - Salalah II IPP by ACWA Power • Bronze - GHORASAL 365MW GAS BASED CCPP by Bangladesh Power Development Board

Transmission & Distribution Project of the Year - Gold • Gold - Large-scale Grid Connection Planning for Offshore Wind Power in Taiwan by Taiwan Power Company • Silver - World Expo 2020 Dubai 132/11KV Substations by Dubai Electricity and Water Authority (DEWA) • Bronze - Distribution Management System by BSES Yamuna Power Limited Wind Power Project of the Year • Gold - Rom Klao Wind Farm powered by Vestas Asia Pacific • Silver - Yongding Hukeng Wind Power Project of Southeast Branch by China Resources Power Investment • Bronze - Tsetsii Wind Farm by Clean Energy Asia LLC • India - ReNew Power Amba Wind Farm: A 52 MW Wind Power Project in Madhya Pradesh by ReNew Power Ltd Environmental Upgrade of the Year - China • China Resources Power (Haifeng) Co., Ltd by China Resources Power Holdings Company Limited Environmental Upgrade of the Year - Malaysia • Floating Solar System on Water Retention Dam by CYPARK RESOURCES BERHAD

Geothermal Power Project of the Year

Environmental Upgrade of the Year - Maldives

• GOLD - EPCC Rehabilitation Works PLTP Kamojang Unit 1 powered by PT PP (PERSERO) TBK - Gold

• STELCO Solar Hybrid Power System by State Electric Company Limited

Hydro Power Project of the Year • Gold - Asahan I Hydroelectric Power Plant powered by PT PJB SERVICES • Silver - Solu Khola (Dudh Koshi) Hydroelectric by Sahas Urja Limited • Bronze - SINGATI KHOLA HYDROPOWER PROJECT

by Singati Hydro Energy Ltd. Information Technology Project of the Year • Gold - Horizon Power App by Horizon Power 22 ASIAN POWER

Environmental Upgrade of the Year - Philippines • Taking the Lead in Resource Optimization and Waste Minimization of SMC Consolidated Power Corporation

by SMC Consolidated Power Corporation Independent Power Producer of the Year • Australia - Alinta Energy • India - ReNew Power Ltd

• Indonesia - PT. GH EMM Indonesia by China Energy Investment Corporation • Mongolia - Clean Energy Asia LLC • Philippines - Solar Philippines • Saudi Arabia - ACWA Power Innovative Power Technology of the Year • Australia - Newman Battery Storage Project by Alinta Energy • China - China Resources Power (Panjin) Co. Ltd. by China Resources Power Holdings Company Limited • India - ADVANCED DISTRIBUTION MANAGEMENT SYSTEM (ADMS) by TATA POWER DELHI DISTRIBUTION LIMITED • Indonesia - AVATOR : Integrated and Automatic Special Portable Tool for Speeding and Easing Vibration Calibration Monitor in Gresik Unit by PT PEMBANGKITAN JAWA-BALI • Japan - TEPCO’s Collaboration with Entrepreneurs to Accelerate Virtual PPA by TRENDE Inc. • Malaysia - Floating Solar System on Water Retention Dam by CYPARK RESOURCES BERHAD • Nepal - Atmospheric Air Water Generator for Reliable Hydropower by IDS Energy Private Limited • Philippines - MPPCL Turbine Retrofit- HP/IP & LP Modernization by Masinloc Power Partners Co. Ltd. • Sri Lanka - Yugadanavi 300 MW Combined Cycle Power Plant by Lakdhanavi Limited • Thailand - WEH T2 and T3 Wind Farm powered by Vestas

Representatives from Korea Midland Power and Emerson

Power Utility of the Year • India - TATA POWER DELHI DISTRIBUTION LIMITED • CHINA - ROSATOM • Australia - Horizon Power • Korea - Korea Midland Power CO.,LTD • Nepal - Nepal Electricity Authority • Pakistan - K-Electric Limited • Philippines - San Miguel Consolidated Power Corporation • Sri Lanka - Lakdhanavi Limited

Roland Cabasa and Mathias Mancira of SMC Consolidated Power Corporation with Mar Tuazon of Masinloc Power Partners Co. Ltd.

Smart Grid Project of the Year • China - China Resources Power (Fuqing) Co. Ltd. – Fuyao Smart Energy Project by China Resources Power Holdings Company Limited • India - Smart Grid Technology Distribution Network

by India Power Corporation Limited • Taiwan - The Centralized SCADA System of Large Numbers of Distributed Renewable Energy Generation Plants at Power Control Center by Taiwan Power Company • Thailand - First Smart Grid Project in Thailand, powered

by Itron by Provincial Electricity Authority • UAE - Smart Grid in Dubai Power Network: the Wide Area Monitoring System by Dubai Electricity and Water Authority (DEWA) CEO of the Year

Abdul Haris Tatang of PT PP (Persero) Tbk

• Paddy Padmanathan of ACWA Power

Networking Representatives from PT PP (Persero) Tbk ASIAN POWER 23

Wang Feng, Huang Huawei, Wang Liwen of China Resources Power Holdings Company Limited

Jack Kneeland of The Lantau Group representing Vena Energy

Emerson Representatives

Kithsiri Egodawatta, Shakthi Dissanayake & Harshitha Ananda of Lakdhanavi Limited

Ian Warrilow of Masdar

Representatives from PT.GH EMM Indonesia

Park Jae-il, Kim Byong-Hun and Jeon Jin-Woo of Korea Midland Power CO.,LTD 24 ASIAN POWER

Mathias Mancira and Roland Cabasa of SMC Consolidated Power Corporation with Mar Tuazon of Masinloc Power Partners Co. Ltd.

A Djati Prasetyo, Nyoman Awatara & Nur Hidayat of PT PJB SERVICES

Amjad Mohamed & Mohamed Latheef of State Electric Company Limited

Takaya Watanabe of ACWA Power

Mozammel Hossain, Latif Khan & Abdul Hakim of Summit Gazipur II Power Limited

Hemant Goyal, Praveen Kumar Sharma & Shadab Ahmad of TATA POWER DELHI DISTRIBUTION LIMITED

Tseng, Huei-Mei of Taiwan Power Company

PT. Pembangkitan Jawa-Bali Representatives

En Shahrul Azad B Lizam, Noorjupita Binti Najmudin and Freezailah Bin Che Yeom of CYPARK RESOURCES BERHAD

Hwang Jin Yoon, Dharma Hutama Djojonegoro & Jacqueline Kurniawan of PT Tanjung Power Indonesia

PT.GH EMM Indonesia Team ASIAN POWER 25

CO-PUBLISHED CORPORATE PROFILE

PT PP sets innovation standards as it powers Papua province with Mobile Power Plant Package 8 Powering a less accessible area such as Papua proved to be a challenge, but PT PP’s innovative strategy cut costs by 0.22% and delivered 90% progress in five months, breathing life into the 100MW mobile plant.

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uring his opening speech at the unveiling of the Mobile Power Plant (MPP) Package 8, Indonesian president Joko Widodo was quoted saying, “Every time I visit any province, to any regency or city, it is always a complaint that there is a shortage of electricity.” Despite the flurry of projects ahead, power outages are still a pressing problem in Indonesia - especially in the Eastern side - prompting the government to come up with a 35,000MW power programme that aims to put a resolve to them.

Minister of Energy and Natural Resources Ignasius Jonan said, “For the entire province of Papua and West Papua, the addition of electricity is approximately 450MW from 2017, 2018, and 2019.” Specific concerns such as these make it a difficult thing to light up Indonesia, but PT PP (Persero) Tbk embodies the hope that the country can shine brighter.

Heavy challenges lie across the mountains and islands of in Papua and its surrounding locations which are integrated areas. There is a lack of access to transportation, because the islands are mostly covered by forests and swamps which are subject to extreme weather.

However, the sustainable environmental and economical development of Papua and its surrounding islands make them better prepared for becoming one of the backbones of Eastern Indonesia. The abundance of natural resources also support the beginning of this kind of development.

MPP Package 8 is one of several power plant projects of the EPC Division. It has a total capacity of 100MW divided across two regions — Jayapura and Kendari. The project is included in the

Indonesian government’s programme for the development of 35,000MW of national electricity.

Illuminating Indonesia PT PLN (Persero), as the owner of the MPP Package 8 project, appointed PT.PP (Persero) Tbk to lead a consortium with Wartsila Oy and PT Wartsila Indonesia that will complete the project. PT PLN (Persero) set the project’s target completion period at six months. For MPP Package 8 project manager Sholikul Hadi, this came as an extraordinary challenge as it required the full cooperation of a consortium with an international company as well as fast actions to finish a project in the eastern province of Indonesia.

Hit by the issue of social conflict in Papuan society and the threat of malaria attacks, the MPP Package 8 team employed a special strategy in handling such issues by having regular health checks, alert medical teams, and the constant provision of facilities in safe and comfortable working environment.

Starting strategy There were also security issues that challenged the delivery of massive main equipment and the smooth flow of the construction process. These were addressed through a persuasive approach; there had to be a sense of brotherhood and a joy to educate the Papuan community on what the MPP Package 8 team came with.

There had to be careful preparation in matching the team’s vision and mission to the goals of the project. The idea of embedding a mindset of happiness was applied, thus the creation of “My

“90% of expected progress was achieved in the span of five months whilst production costs shrank by 0.22%.”

Happiness Project.” This had a philosophy that if the team worked with happiness, not only will targets be met, creativity and innovation will also come into fruition.

Largely thanks motivation from this side-project, about 90% of expected progress was achieved in the span of five months, whilst production costs shrank by up to 0.22%. HSE and KPI requirements and were also met for MPP Package 8.

Certainly the success of the MPP Package 8 project is inseparable from the cooperation of all parties including its owner PLN. The strategy undertaken to realise the mission and vision included all parties’ gathering at the beginning of the project in the hope that they can synergise towards the goals or targets that were expected of them.

Safety standards The MPP Package 8 project had a high risk of accidents. This meant that the project team considered the need to implement systematic, targeted, and sustainable HSE programmes to realise the goal of zero accidents.

The implementation of an HSE management system involved good planning, management, as well as the joint responsibility of all parties in the project. It aimed to make the program well-managed and sustainable. The leaders and the project team of MPP Package 8 carefully developed HSE programmes and socialised with all elements related to project activities, including workers, subcontractors, and project visitors.

The K3L programmes implemented in the MPP 8 Project are as follows: Establishment of Workplace Safety and Environment (P2K3L) Committees in the project; Signing of joint commitment; Hazard and Hazard Identification and Assessment; HSE Training Programmes; periodic inspections; periodic medical examinations of staff; fogging; emergency room preparation; social programmes involving local communities such as Safety Goes to School & Corporate Social Responsibility (CSR), and the proven HSE MPP8 Kendari Safety Induction which was applied across all the projects of PT.PP Persero Tbk in Indonesia.

CONTACT

Mobile Power Plant Package 8 had 100MW capacity divided across two regions.

26 ASIAN POWER

Company name: PT PP (PERSERO) TBK. EPC DIVISION Address: Plaza Pp. 3rd Floor. Jl. Tb Simatupang No. 57. Pasar Rebo Jakarta Timur Phone number: +62 21 840 3883 Fax number: +62 21 840 3936 & 840 3890 Email: epc@pt-pp.com Website: www.pt-pp.com

CO-PUBLISHED CORPORATE PROFILE

PT PP takes on the first rehabilitation work of Indonesia’s first geothermal power plant It restored and upgraded Kamojang Geothermal Power Plant Unit 1 in a span of two years and met standards of effectiveness, adherence to the client’s needs, and QHSE goals.

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midst the large pool of Indonesia’s power resources, geothermal energy’s potential is one of the largest. The resource’s energy potential of 29GW is equivalent to 8-10 billion barrels of petroleum. This makes Indonesia the world’s third largest geothermal market after the US and Philippines.

Indonesia has several geothermal power plants within its area. The oldest one is Kamojang Geothermal Power Plant Unit 1 which is located in West Java. This pioneer geothermal power plant, which started operations in 1982, used to produce 30MW of electricity that contributed to powering up Java Island. It went through technical rehabilitation in 2016 through PT PP (Persero) Tbk, or PT PP. Rehabilitation opportunities PT PP saw that handling the technical rehabilitation on Kamojang Geothermal Power Plant Unit 1 is a promising opportunity in taking part in the provision of geothermal energy to Indonesia. With its track record of being a reliable, trustworthy, and cost-effective contractor, PT PP was given the chance to be the first state-owned company to restore this power plant. Great expectations arose from this project as it is not only about restoring an old power plant, it is also about taking part in the plan to increase the use of renewable energy.

The construction process started on 26 January 2016 with the dismantling of existing equipment, installing of new ones, and power plant testing.

The whole process was finished on 15 December 2017, marked by the granting of a Turn Over

Certificate to PT PP. As with all construction projects, there were some inevitable obstacles in the process. The location of the power plant, which rested on the foot of Guntur Mountain, was one of the biggest challenges, because road access was very limited.

The high altitude and the distance between the port and the site was also challenging, because the team needed to carefully calculate the time needed to transfer all of the equipment.

Coordination between PT PP, equipment manufacturer PT Ansaldo, and project owner PT Indonesia Power was the essential aspect that allowed equipment to get moved smoothly.

Aside from geographical issues, limited space on-site was also an issue because Power Plant Units 2 & 3 had to keep operating during the rehabilitation of Unit 1. The huge size of the steam turbine and the generator also made lifting via mobile or crawler crane difficult.

Coming up with solutions PT PP came up with the solution of using super lifting gantry which is designed to lift heavy objects on a narrow space. The team also added floor reinforcement to ensure floor support during the lifting process. This illustrated the need to be adaptive to the challenges that appear on-site and the urgency to seek for the solutions for obstacles in the construction process.

In order to make sure that the rehabilitation ran smoothly, PT PP made sure it was effective, customer-oriented, and QHSE-minded. Every single part of the project was planned carefully to

achieve the highest level of efficiency. This covered not only the technical aspects of the rehabilitation process but also the costs and the time schedule.

As the part of its customer-oriented spirit, PT PP also always included PT Indonesia Power in every decision-making process. Efforts were made to communicate well with the client and make sure the project goals were delivered in accordance to their needs. Moreover, the QHSE goals were successfully achieved due to the fact that there were no fatalities nor major work incidences.

These values helped PT PP deliver the project on-time within two years. This proves that the challenges encountered on-site and during the whole duration of the project were nothing but motivation for PT PP to achieve more than what was expected or needed.

CONTACT Company name: PT PP (PERSERO) TBK. EPC DIVISION Address: Plaza Pp. 3rd Floor. Jl. Tb Simatupang No. 57. Pasar Rebo Jakarta Timur Phone number: +62 21 840 3883 Fax number: +62 21 840 3936 & 840 3890 Email: epc@pt-pp.com Website: www.pt-pp.com

“With its track record of being a reliable and trustworthy contractor, PT PP was given the chance to be the first state-owned company to restore this power plant.”

PT PP made sure it was effective, customer-oriented, and QHSE-minded.

28 ASIAN POWER

The Kamojang Geothermal Power Plant

CO-PUBLISHED CORPORATE PROFILE

DEWA wins 2 awards at Asian Power Awards 2018 It won for its 132/11kV substation project for Expo 2020 and Smart Grid focused on network control systems.

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ubai Electricity and Water Authority (DEWA) strengthened its global leadership and excellence in recognition of its vision to be a sustainable innovative world-class utility, by winning two awards at the 14th Asian Power Awards 2018 in the ‘Transmission & Distribution Project of the Year’ and ‘Smart Grid Project of the Year’ categories. The awards ceremony was held at the Ritz-Carlton in Jakarta, Indonesia.

DEWA won the Transmission & Distribution Project of the Year award for its 132/11kV substation project launched for Expo 2020 Dubai, which will provide the energy for this mega global event. DEWA also won the Smart Grid Project of the Year award for its smart electricity and water network control systems which aim to increase the efficiency of electricity and water networks in Dubai, in accordance with the highest standards of availability, efficiency, and reliability.

“These awards reflect the international recognition of DEWA’s efforts and projects and its leading position among service utilities in Asia and the world. Our path is focused on maintaining the highest level of operational excellence and economic operation to achieve the vision of HH Sheikh Mohammed Bin Rashid Al Maktoum, vice president and prime minister of the UAE and ruler of Dubai, to be the world’s number one in all fields, and make Dubai the smartest and happiest city in the world.

“As DEWA, we are committed to enhancing our contribution to the achievement of our national vision and strategies, including the UAE Centennial

2071 which shapes the future of the UAE for the next generations, and the UAE Vision 2021 to make the UAE one of the best countries in the world,” said HE Saeed Mohammed Al Tayer, MD & CEO of DEWA, whilst congratulating the DEWA teams for their awards, which are added to its success and excellence.

Meeting Expo 2020 expectations “As the first official sustainable energy partner of Expo 2020, we were keen to speed up the completion of our projects in support of the sustainable energy provision for the event’s facilities, in line with the directives of HH Sheikh Mohammed bin Rashid Al Maktoum to host the best Expo in Dubai, thus enhancing the leading global position of Dubai and the UAE.” DEWA commissioned three 132/11kV substations, namely: Opportunity, Mobility, and Sustainability, (named after Expo 2020’s three subthemes) with 45 kilometres of high-voltage 132kV cables.

DEWA has allocated AED 4.26b for investments in electricity and water infrastructure projects to support Expo 2020. DEWA intends to supply the exhibition with clean energy, whilst the Mohammed Bin Rashid Al Maktoum Solar Park will supply 400 MW of energy.

“With the ‘Smart Applications through Smart Meters and Grids’ initiative, we aim to support and increase the capacity and efficiency of power transmission networks by providing smart and innovative energy infrastructure and service facilities for sustainable development in Dubai.

This is achieved by providing electricity and water services in accordance with the highest standards of availability, reliability, and efficiency. DEWA is currently replacing the old mechanical and electro-mechanical meters with smart new meters, and has already implemented a number of smart

technology procedures in power grids, and the latest SCADA, smart monitoring, and control automation systems. In total, there will be more than 1.2 million smart meters in Dubai by 2020,” Al Tayer said.

Smart Grid strategy “The Smart Grid is a key component of DEWA’s strategy to develop an advanced infrastructure to support Dubai’s efforts in becoming a smart and happy city. We are strengthening the electricity and water infrastructure by relying on smart, modern network technologies and providing advanced features that include automatic decision-making and inter-operability across the entire electricity and water network. The Smart Grid supports efficiency for consumers to optimise their utility consumption. In turn, it supports the Dubai Plan 2021 and the Demand Side Management Strategy to decrease energy and water consumption to 30% by 2030. The Smart Grid project includes 11 programmes with investments totalling AED 7b to be completed in short, medium, and long-term phases between 2014 and 2035,” concluded Al Tayer.

Today, DEWA has a world-class infrastructure, with a capacity of 10,400MW of electricity and 470 million gallons of desalinated water per day, to meet the ever-increasing demand in Dubai.

At the same time, DEWA’s assets have grown to exceed AED 144b with an additional AED 81b to be invested over the next five years for capacity building in electricity and water for Dubai.

“DEWA allocated AED 4.26b for investments in electricity and water infrastructure projects to support Expo 2020.”

H.E Saeed Mohammed Al Tayer MD&CEO of DEWA

DEWA is working to support the push for Dubai’s shot at Expo 2020.

ASIAN POWER 29

CO-PUBLISHED CORPORATE PROFILE

Thinking outside the box: PT Pembangkitan Jawa Bali (PJB) saves billions through proprietary technology PT PJB revived and upgraded the trip turbine protection system of Paiton Power Plant Unit 1 & 2 by tirelessly finding new solutions to fuel its mission of providing reliable energy to East Java and the rest of Indonesia.

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hen it comes to maintaining supercritical power plants, an efficient protection system is indispensable for any power utility. A faulty protection system can lead to a surge in maintenance costs and a sharp decrease in plant reliability.

A case in point is PT Pembangkitan Jawa-Bali has an experience with an innovative turbine protection system. After enduring repeated failures in its existing turbine protection systems, it has decided to take matters into its own hands and built a turbine protection system that has resulted in massive gains and much improved plant reliability.

Redesigning for efficiency The Paiton Power Plant Unit 1 & 2 consists of two 400-MW coal fired steam power plants. Both plants use turbines driven by saturated steam. To maintain its reliability, the turbine in Paiton Unit 1 & 2 is equipped with three trip turbine protection systems. Those are Emergency Oil Low protection, Condenser Vacuum Low protection, and Bearing Oil Low protection.

Despite these existing systems, the Paiton Power Plant Unit 1 & 2 still suffered from three turbine trips in 2015 alone. These failures occurred because the turbine protection system used a non-redundant approach that relied on a single pressure switch which made the turbine trip in

case of critical conditions.

“The performance of this protection device before modification is prone to failure. Although the pressure switches has been calibrated and overhauled every two years, this does not guarantee that the protection system is reliable because there are inherent flaws in the system,” explains PT PJB. The Paiton Unit 1 & 2 suffered painful losses. The repeated firing process resulted in a maintenance cost amounting to IDR4.28b. It was also resource intensive: water consumption jumped by 2,850 cubic metres, whilst the Equivalent Forced Outage Rate (EFOR), which represents the hours of unit failure, increased to 69%. At the same time, the Equivalent Availability Factor (EAF)—which shows the amount of time that a power plant is able to produce electricity over a certain period—dropped by 0.48%.

To handle this, PT PJB chose to improve its turbine protection system by applying a redundant approach. Instead of using one switch, the system now has three pressure switches mounted in parallel to each other at one tapping point.

“The outputs of these three pressure switches are connected separately to the turbine control system, and are integrated with the 2/3 redundant logic circuit,” the company said.

Since its implementation in March 2016, this modified protection system has prevented the occurrence of turbine trip twice in 2017. This resulted in maintenance cost savings of about IDR3.17b and the avoidance of potential losses amounting to IDR1.11b.

Since its establishment in 1995, PT PJB has been at the forefront of developing new technology

to secure Indonesia’s energy supply. It searches for viable solutions to problems which disrupt the country’s energy sector—for example, the use of cumbersome vibration monitoring devices, which requires a manual calibration process that can last up to eight hours.

Creating new technology “To overcome these problems, we have designed an accurate, compact, portable and automatic vibration monitoring tool which is called Automatic Vibration Monitor Calibrator (AVATOR). AVATOR integrates measuring tools and calibrator functions in one piece of equipment,” the company explained.

AVATOR is the only compact and portable equipment for calibrating monitoring devices. In fact, PT PJB has filed for a patent application over its technology. “The main factor that distinguishes AVATOR from other technologies is the use of accurate amplitude sources combined with a DC bias range that is adjusted to monitor vibrations commonly used in plants. And this factor is combined with pulse output for phase angle calculations,” the company noted.

AVATOR can be controlled through a 4.3-inch human machine interface (HMI) monitor, which is integrated into the hardware casing. It can also be operated through an Android application which can be loaded into any tablet and is connected to the AVATOR hardware wirelessly via bluetooth.

With its commitment to building innovative technology for solving problems, PT PJB received the Coal Power Project of the Year award and the Innovative Power Technology of the Year award at the 2018 Asian Power Awards.

“Since its implementation, the modified protection system has prevented the occurrence of turbine trip twice.”

PT Pembangkitan Jawa-Bali CEO Iwan Agung Firstantara 30 ASIAN POWER

PT Pembangkitan Jawa-Bali’s Gresik Unit

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PJB Services, Providing Total Solutions For Your Power Plant

PJB Services provides many kinds of services in power plants management. Our products ranging from Operation and Maintenance (O & M) of Coal Fired Steam Power Plant , Hydroelectric Power Plant, Combined Cycle Power Plant / HRSG, Gas Turbine , Gas Engine, and Diesel Engine, consist of : HSE Management, Setting up-mentoring-and implementing Asset Management. PJB Services provides another services like Repair & Rehabilitation, Relocation, Remaining Life Assessment (RLA) and Inspection (Overhoul) of any types of Power Plants also.

Supported by 17 years of experiences and 3,700 experts and professional in O&M of various types of Power Plants, PJB Services reputation has already been proven that we can give our customers a high reliabilty, availability and efficiency for power plant unit performance output.

WHAT WE ACHIEVE IN ASAHAN, SUMATERA UTARA

In relation to primary energy there are several other factors that influence the output, they are: the height of effective fall, water quality and water discharge that can be utilized. Effective fall height is affected by the elevation of water in the siruar dam with the water elevation in the Sigura - Gura dam.

This condition creates a synergy between the managers of Lake Toba, namely Jasa Tirta, the Manager of the Sigura Gura Dam, the Inalum Hydro Power Plant and the Owner of Asahan I Hydroelectric Power Plant, namely BDSN. Daily basis coordination is needed for this work.

Together.

Continuously encourage and educate the surrounding community not to throw garbage in the river path, activate the community waste management, and empowering residents to participate in taking care of river cleanness, like picking garbage in the river.

Besides that, sediment dredging, diving for garbage cleaning and periodic trash rack checks are also carried out. However, cleaning the trash rack must be routinely done every day. To meet one of the indicators of success, the efficiency of water use is in accordance with the design of water use planning.

Operation Indicator

Since 2014, Asahan I Hydroelectric Power Plant has been successfully operated and maintained by PJB Services. Asahan I is a run of river hydropower with 2 x 90 MW in capacity, with 1,175 GWh / year production target. The biggest challenge for Asahan I is reaching the production target according to the contract.

Net Production Average Water Debit Equivalent Available Factor (EAF)

Which is broadly influenced by several factors, including: availability of primary energy, electrical energy needs and wellness of generating equipment. As in general, the availability of primary energy is affected by rainfall. Although the rainfall or water debit that is used fluctuates annually, the production target remains the same.

Technical Innovation

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Units

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Modification of the garbage lift system in trash rack intake gate Modification flange balancing pipe Modification conveyor system intake gate

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CO-PUBLISHED CORPORATE PROFILE

PT. GH EMM Indonesia maintains electricity of Sumatera Island by innovation and high reliability operation Driven by the lack of accessible power in remote areas, it built two units that ran using very low calorific value of coal (1800 kcal/kg - 2000 kcal/kg) and high moisture, improved by a rotary steam tube dryer.

I

n order to provide accessible power to remote areas in Indonesia, independent Power Producer (IPP) company PT.GH EMM Indonesia initiated the construction of a 2x150 MW coal-fired power plant located in Muara Enim Regency at the South Sumatra Province of the country.

It also owns a mine mouth power plant supported by an open-pit coal mine with an annual output of 2.1 million tonnes. This inevitably helped the flow of supply into the plant. The construction of the project commenced on 7 July 2009, and the two units were put into production on 4 July 2011 and 3 November 2011, respectively.

It took only 28 months from construction until the unit was put into operation. It took eight months in advance as compared with construction period agreed upon in the Power Purchase Agreement (PPA). The construction period for the first unit lasted for only 24 months, marking one of the shortest times for building other units of its kind in Indonesia.

PT. GH EMM Indonesia utilises very low calorific value of coal (1800 kcal/kg - 2000 kcal/kg) with high moisture (59%-63%) as the main fuel.

“Generating electrical energy by utilising this type of coal as a fuel is something no other power plants can afford to do,” the company said.

“Although we utilise this type of coal as our power plant’s main fuel, it doesn’t affect our

Two units avoided derrating and outages.

32 ASIAN POWER

The 2x150 MW coal-fired power plant located in the South Sumatra Province

power plant operation performance. Our power plant still has excellent operational reliability,” the company added. The Equivalent Availability Factor (EAF) for 2017 reached 98.6 % and EFOR (Equivalent Forced Outage Factor) hit 0.52%.

Stable operation of two units PT. GH EMM Indonesia made excellent progress in operation. The two units were in continuously stable operation throughout the year without any derrating and forced outage. By the end of October 2018, Unit 1 has been running for 554 days whilst Unit 2 has been running for 583 days without any forced outage. “This enabled us to be the most reliable power plant in Sumatra Island grid,” it said.

The most advanced of its coal utilisation technology is the rotary steam tube dryer (RSTD).

RSTD is a full set of coal drying system. PT. GH EMM Indonesia has four units of RSTD with a total drying capacity of 480 ton/h, a length of 30 metres, and a diameter of 4.2 metres.

The mined wet coal is transferred using dump trucks, unloaded in coal breaking stations, and transferred to the RSTD using a belt conveyor. The dried coal is then transferred to the coal bunker for burning. “The total coal reserve of our coal mine is 75 million tonnes of coal. It could be utilised for continuously 30 years ahead,” the company said.

Furthermore, the company also treats coal waste water until it transforms into cake coal. The clean water and coal are separated using high pressure filter technology. Clean water is then recycled for the utilisation of coal handling and coal drying system area, whilst cake coal is delivered to the coal drying system using a belt conveyor and then

given to the coal bunker as the additional fuel.

PT. GH EMM Indonesia has successfully improved the economic value of this kind of coal that has not been glimpsed by both industries and power plants. “We transformed the bad quality of coal to be useful,” it said.

Cutting power plant costs This process has powerfully reduced the production cost of their power plants. With this strategy, PT. GH EMM Indonesia even achieved The Best Innovation Electricity Company in Indonesia in 2017 by promoting the fruitfulness of coal drying system technology.

The company has also gotten several achievements and certificates for a lot of years.

In September 2018, it won two awards in the prestigious Asian Power Awards under the categories Coal Power Project of the Year and Independent Power Producer of the year. “We feel a sense of responsibility after winning these awards as we feel that this is just a beginning and there is a lot more achievements we need to achieve and there are more works we need to do in the future,” it said.

PT. GH EMM Indonesia was established on 11 March 2008 by the consortium of China Shenhua Energy Co., Ltd and PT. Energi Musi Makmur. It is located in Muara Enim, South Sumatra, Indonesia, about 100 km southwest of the provincial capital city Palembang. The company currently has 195 employees, which includes 139 Indonesian staff.

The organisation is in accordance with the principle of configuration with six production and management departments. Feng Guanbin is the president director of PT.GH EMM Indonesia.

“Construction period for the first unit lasted for only 24 months, one of the shortest for its kind in Indonesia.”

CO-PUBLISHED CORPORATE PROFILE

Vice Chairman of Summit Group Latif Khan along with Managing Director Eng Mozammel Hossain and Project Head Engr Abdul Hakim of Summit Gazipur I & II Power received the award for the Fast-Track Power Plant of the Year in recognition as one of the fastest implemented power plants in the world at Asian Power Awards 2018 in Jakarta, Indonesia

Summit Gazipur makes history with fast-track 300MW IPP project It had to get funding, procure equipment, transport, and build a substation in addition to the power plant all in a span of nine months.

I

n support of Bangladesh’s push to implement 2,600MW of fast-track power generation projects that will address electricity shortage, Summit Group took up the task of building a 300MW IPP project all in nine months. Projects were awarded considering the availability of lands to the project sponsors. Summit had just started procuring land for another 149MW power plant project, so it could easily purchase the required 16 acres of land adjacent to that project.

The implementation period was not similar to any other IPP project in Bangladesh as it was developed through activities involving green-field projects. The countdown of the nine-month implementation period started from the day of issuance of the letter of intent on 10 August 2017.

Deadline challenges For the implementation of such a time-bound fast-track project, the company needed: strong determination; an investment capability; a dedicated project implementation team; and a technical and managerial capacity of the project implementation team. In addition, Summit had to build the substation and one-kilometre, 230 KV double circuit transmission line that will be used for power evacuation to the National Grid.

The foundation works for the equipment especially for heavy engines were very challenging as the sub-soil conditions of the site were not optimal.

With constant monitoring of manufacturing activities in the foreign factories and following up for timely delivery, Summit successfully readied the substation before beginning operations of the power plant.

The project site is located at Kodda under the Gazipur district by the tributary of river Turag which was hard to navigate for transportation of

34 ASIAN POWER

heavy cargo materials. All the major equipment and materials had to be transported by river barges. In order to transport heavy materials safely, Summit picked the first week of November until mid-January as the best time to transport from the Mongla seaport up to Kodda project site.

Transporting innovation Once the equipment reached the plant, critical challenge was the unloading of the cargos as well as the lifting of the 18,300-tonne 18V46 HFO fueled Wärtsilä engines. Summit used a 600-tonne crawler crane and special low bed trailer. The approaching road from the nearby Gazipur-Tangail highway was very narrow and not suitable for moving road trucks having seven-tonne materials.

The construction of the 1km, 230 KV double circuit interconnection line was another big challenge. Procuring four heavy towers and other line materials was difficult because there were no factories interested to manufacture such a small quantity of transmission line materials and deliver it within four to five months.

The construction of the foundation in the submerged line route land was arduous.

Summit had to make special efforts to make the foundation within a short time.

Completing installation Summit had completed the installation with the support of the commissioning team from Wärtsilä and the hard work of Summit’s project team. It completed the required 100 hours Reliability Run Test (RRT) by the evening of 9 May 2018 and BPDB has declared officially the commencement of COD

Summit Gazipur II Power-300 MW power plant started operating on 10 May 2018 in record time.

of the plant from the zero hundred hours of 10 May 2018.

The end result is a project that is recorded as the fastest implemented of its kind in the history of power plant construction in Bangladesh and in the world. Due to the location of the plant in a load centre area and comparatively more efficient plant in respect of fuel consumption, the plant is almost running at full capacity since its commercial operation. This accomplishment was awarded the highest national recognition by Bangladesh government as well as Silver Award by Asian Power Awards 2018.

CONTACT Company name: Summit Power International Address: #52-00 One Raffles Place, Tower 1, Singapore 048616 Phone number: +65 62254600 Fax number: +65 62222716 Email: enquiry@summitpowerinternational.com Website: www.summitpowerinternational.com

“Summit Group took up the task of building a 300MW IPP project all in nine months.”

Ansaldo Energia revs up energy development in Indonesia From 2018 to 2025, the power market in Indonesia is expected to grow at a tremendous rate, and Ansaldo Energia is willing to take this opportunity to offer top technologies to customers in the country.

I

t has been active in Indonesia for over 20 years and has two recent installations in the country.

Ansaldo Energia has recently completed the supply of two gas turbines in Grati Power Plant in Central Java, having finished commissioning in June 2018 for PLN. In December 2017, Ansaldo Energia played a crucial role as full EPC in the rehabilitation of a geothermal power plant at Kamojang site by substituting the existing turbine and generator with a new one manufactured in their Genova factory for Indonesia Power, a subsidiary of PLN. Aldo Canepa, new units sales, vice president Asia Pacific, Ansaldo Energia, said that there are several market opportunities in Indonesia, and that the company’s major drive for their presence in the country is the installation of gas and geothermal turbines. After having completed the two gas turbines and the rehabilitation of the geothermal power plant, Canepa said that Ansaldo Energia is now working with different customers to develop new initiatives and then collect new business opportunities from the field.

In the geothermal space, Canepa said that the company is able to provide a full range of geothermal turbines that generate 20MW up

to 110MW. At present, it is exploring several partnerships with stakeholders across all power sectors, which includes independent power producers (IPPs).

In particular, the company prides itself in its GT26 and GT36 turbines, which have a flexibility and efficiency that can fit well in the Indonesian grid. According to Canepa, gas in Indonesia is frequently used to fuel peaker power plants, and the GT26 and GT36 can perfectly operate with high efficiency at full and partial loads.

Because of a unique sequential combustor technology, the GT26 and GT36 turbine offers low emissions, a high turn-down capability, and high fuel flexibility. The high turn-down capability of these turbines enlarge the emission-compliant operation window, and thus increases the options for the power plant operator as compared to other combustion technologies.

Ansaldo Energia partnered with Shanghai Electric to deliver gas turbines to the wider Asian region, China in particular. Canepa said that they are also exploring other markets and identifying the best strategy for expansion.

Ansaldo Energia is involved in an integrated business model for turn key construction of

“The high turn-down capability of these turbines enlarge the emission-compliant operation window.”

CONTACT Company name: Ansaldo Energia Address: 16152 Genoa - Italy -Via Nicola Lorenzi, 8 Phone number: +39 010 6551 E-mail: info@ansaldoenergia.com Website: https://www.ansaldoenergia.com/

Ansaldo Energia also partnered with Shanghai Electric to deliver more gas turbines in China

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power plants, power generation equipment, manufacturing and services, and services related to nuclear business. In Indonesia, the company’s representative office focuses on opportunities such as for EPCs, OEMs, and related maintenance services with major state utilities like PLN, its subsidiaries and IPPs now approaching the Indonesian market.

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OPINION

MELISSA BROWN

A riddle wrapped up in an enigma— Why can’t Indonesia get the power sector right?

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inston Churchill is famous for many reasons, one of which was his remarkable facility with the English language. Churchill’s pithy phrase about the power of mis-direction is worth keeping in mind for any analyst of the Indonesian power sector.

Whilst global investors are working overtime to track the advance of clean energy in global markets, the Indonesian power market is an oasis of calm.

This is the market to watch if you like watching a power company resolutely hold to an old-fashioned fossil fuel narrative despite the fact the numbers don’t add up.

As 2018 comes to a close, it is worth conducting a brisk post-mortem on financially stressed PLN’s performance as a way of preparing for what promises to be a make-or-break year for the company in 2019.

When the hole gets too big, stop digging!

One of the things that is notable about the Ministry of Energy and Resources’ (MEMR) planning strategies is that optimism always prevails.

Whilst the rest of the world is busy running scenarios that can capture the impact of radically lower costs from new renewables technologies, the annual RUPTL confidently presents a picture of the future that is curiously like the coal-filled past.

The impact of this conflict with reality is now playing out in very real financial terms that should be worrying investors and developers. Since the beginning of 2018, PLN has begun to lurch toward financial distress as its massive operating losses raise questions about the how PLN can afford its growing reliance on a new fleet of USD financed coal IPPs. After recording an operating income loss of $2.7b in 2017, in the first half of 2018 PLN staggered under a worsening FX climate and saw its operating loss rise nearly 40% year-over-year—a trend that will only accelerate thanks to adverse FX moves and higher IPP capacity payments.

Conventional wisdom says that PLN’s financial black hole doesn’t matter that much because the company is back-stopped by the sovereign credit which remains in good standing. But that is too optimistic a reading of S&P’s recent review of PLN. In their late August commentary, S&P specifically stated that their outlook rests on “Greater confidence in the government’s oversight and supervision of PLN and its financial obligations.” They are also counting on more coordination between various ministries, presumably to create some breathing room for the Ministry of Finance to focus on stabilising the national balance sheet.

Following ratings logic This sounds like conventional ratings agency logic, but the reality is a little different—and observers of Indonesia’s power sector should be on alert.

MEMR followed up on S&P’s hope for more “oversight” by announcing that roughly 42% of planned new capacity would be put on hold to keep PLN’s near-term losses and cash requirements in check. This prudent step was exactly what PLN’s bond investors should have hoped for.

Unfortunately, this improved narrative has already begun to unravel. It seems that MEMR may have failed to coordinate with PLN or they both misjudged the pushback that would result. Either way, the market has been treated to a hasty climb down as the delay numbers have now been cut twice via confusing MEMR presentations.

How big is the reality gap? Based on IEEFA estimates, what was once expected to be a delay of 15.2GW of new capacity is now expected to be a delay of only 8.8GW. This reduces an impressive sounding 42% deferral to a decent, but not game-changing, capacity delay of 24%.

36 ASIAN POWER

Asia Energy Analyst at IEEFA

Two views of Indonesia’s electricity in 2030

Source: IEEFA

With luck, this will take pressure off of near-term capex and funding requirements although no estimates have been released.

Perhaps more concerning is what MEMR is saying about why they got the numbers wrong. The biggest chunk of capacity that has been placed back on track relates to 1.9 GW that has associated take-or-pay fuel agreements that have already been signed.

This is exactly the type of project that regional Finance Ministers, Central Bank governors, and ratings agencies are now concerned about. Payment obligations with FX exposure that are tied to fixed rather than actual offtake impose long tail financial risks that most governments are keen to shed as power sector assets are repriced by new technology options.

Reform with Indonesian characteristics So, what should market participants expect from MEMR and PLN in the coming months? We expect the political calendar to shape developments for the Indonesia power sector in the months to come. The April 2019 presidential election, along with global economic trends, will define what’s possible for PLN in 2019.

What seems certain is that PLN will urgently require a tariff increase.

Indonesia’s credit standing rests on steady improvements in the country’s fiscal position. Although the PLN tariff freeze has been a political winner, it’s not sustainable in the face of growing demands on the Indonesian Treasury.

This leads us to expect that once the dust settles after the election that it may be time for a re-assessment of PLN’s development plan. In most countries, to make a meaningful tariff increase palatable, a new approach to the growth of the power sector would be required.

Real reform which could position Indonesia to benefit from the many innovations sweeping global power markets is not yet obviously on the cards. Positive interim steps would include a truly credible go-slow strategy on new coal IPP commitments paired with the type of international auctions that can deliver industrial scale renewables at the most competitive prices. At a minimum, this would permit Indonesia to begin reducing the financial risks associated with coal lock-in—a step that would certainly benefit the next generation of Indonesians.

If Winston Churchill were still alive, he would embrace this sentiment.

After all his original quote was: “I cannot forecast to you the action of Russia.

It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest.”

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OPINION

INEZ RAKHMANI

Indonesia’s approach to waste-to-energy technology Senior Consultant at ERM

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ndonesia currently has over 230 million inhabitants spread out in 34 provinces demanding basic supplies for domestic and industrial needs.

Electricity now has been playing fundamental roles in the industrial, economic, and domestic activities of the country. In mid-2018, the country’s electrification ratio has reached 97.13%, as reported by the Minister of Energy and Mineral Resources, whilst the national target ratio is 99.9% at the end of 2019.

However, this ratio does not reflect each province’s electricity supply.

For instance, Papua province only reached up to 64.42%, whilst the ratio in East Nusa Tenggara province is up to 59.85%. Even big cities such as Jakarta, Bandung, and other capital provinces often experience massive blackouts, due to the damage on the electrical substation, disturbance on the transmission network, or lack of supply due to dry season.

Lack of electricity supply often happens in big cities, especially in Java and Sumatra islands, where most populations are living in capital provinces to gain a better life. Previously, lack of electricity in big cities was handled by rotating electricity supply from one area to another during certain times.

As one of the proposed solutions to reach the national target of renewables application in electricity, Indonesia has commenced the development of Waste-to-Energy (WTE) power plants in several big cities.

The WTE development plan in Indonesia’s eight big cities has been regarded as a national strategic project. This has been confirmed by the enactment of Presidential Regulation No. 35 of 2018 or the Acceleration of Eco-friendly Waste-to-Energy Power Plant Development.

Another compelling reason for the for implementation of WTE in Indonesia comes from a report conducted by the Coordinating Ministry of Indonesia in Maritime Affairs, in cooperation with the World Bank, which stated that 80% of plastic waste thrown on Indonesia’s ocean area comes from 87 cities in Indonesia, mostly the big ones in Java island. The President of Indonesia has determined action plans to overcome it, such as the application of biodegradable materials in all aspects, 3R waste movement and WTE power plant development in the densest areas.

Considering the need for waste as input for daily operation, the minimum volume required is 1,000 kg per day. The WTE technology is, so far, applicable to big cities in Indonesia, where landfill areas require more treatment. For instance, Jakarta recently generates about 7,000 kg of wastes per day, more than enough supply of municipal waste input for WTE. Challenges A plan for new development will always face challenges on the way to realisation. One of the toughest challenges is the lack of local resources.

WTE technology is still considered a new approach and currently, resources are unavailable in Indonesia. Most raw materials, equipment, and skills are needed to be imported from overseas. Several countries have implied for collaboration in WTE resources supply, like Norway and Denmark.

Another significant challenge is the lack of funding source for these plants.

Importing raw materials, equipment and technology and skills transfer will require a significant funding source. The budget of the regional and central government is limited and considered insufficient for WTE capital initial investment, although the waste inputs are still abundant especially if the WTE plant is located near a landfill site.

Since WTE plant projects have been determined as national strategic projects, then funding sources are currently being assisted by the Ministry of Finance and Coordinating Ministry of Economic Affairs, in cooperation with the Committee for Acceleration of Priority Infrastructure Delivery (KPIPP). Each WTE project is being evaluated in every aspect, in order to 38 ASIAN POWER

Types of available waste-to-energy technology

Source: Inez Rakhmani, ERM

decide the best way of financing.

Continuous operational of WTE requires regular supply and support from local people, NGOs, and governments. Public perception also plays an important part as nobody wants to live near a WTE plant. The fear of air pollution, high level of noise, impacts on community health, and land issues are some of the negative impacts that should be mitigated prior to a plant’s construction phase. A proper and comprehensive study that covers all aspects for mitigating adverse impacts and boosting positive impacts of WTE plant (such as the decrease of municipal waste volume in the landfill and on the ocean), is a must-have item.

Selecting the best technology for WTE plant projects is also important.

Not all cities have the same municipal waste characteristics, thus, an inappropriate type of technology will not be able to produce with high efficiency uniformly. A pre-feasibility study for technology selection and financial outcome is highly recommended in order to gain a high return.

Potential for investment WTE technology is currently new and unknown. It also provides good solutions for municipal waste management whilst at the same time acts as a good electricity supply for high demand areas. Considering lack of information regarding the implementation of this technology, Indonesia is now looking for foreign partners as the initial step.

In this case, the Electricity Generation Cost has been regulated at the national level. However, PT Perusahaan Listrik Nasional (PT PLN), as the state electricity company, must act as the operator for WTE plants in their operational phase as regulated by Indonesian laws.

In order to speed up the establishment of a new business entity, the Government of Indonesia has reformed the bureaucracy by the enactment of an Online Single Submission (OSS) system. All new businesses are required to register the companies in OSS System. This could lessen the complexity plauging licensing procedures that has caused many applications to be revoked.

The Investment Coordinating Board (BKPM) of Indonesia has also introduced a Three-Hour Licensing Service. This service covers the priority sectors such as transportation, telecommunication, construction, energy, and mineral resources. As long as the investor who applies for the licenses is the company founder itself and all requirements are complete, the licensing process will only last about three hours.

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SEPTEMBER 2019 KUALA LUMPUR, MALAYSIA

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EVENT COVERAGE: power-gen asia 2018 Now in its 26th edition, POWER-GEN Asia smashed its previous attendance record, indicating Asia’s importance in the global conversation and development of energy and power.

POWER-GEN Asia was attended by 9,280 industry experts.

Asia’s power utilities catch up to growing industry trends Whilst the power-hungry region is overflowing with opportunities for renewables and coal plants, experts discuss if investments can smash old hurdles and problems.

F

inancing power plants in Asia can prove to be worth it due to rapid economic growth and high power demand brought about electrification rates that are still as low as 37%, but financiers could run into regulatory and logistical challenges as well as competition from banks and other entities. For instance, Asia’s emerging markets are filled with blockages that prevent developers from accessing investments or loans themselves.

According to Ted Low, director of origination & structuring at Clifford Capital, there are currently five risks for emerging markets, namely: offtake risk, currency risk, regulatory risk, jurisdictional risk, and political risk.

Addressing these risks in a market with unprecedented financing terror like Myanmar, a frontier project relied on key success factors such as an international standard tender, a bankable set of project documents (contractual framework was familiar to investors in the region), and a reputable sponsor.

Whilst emerging markets encounter structural hurdles, other Asian countries like China are experiencing a financing turnaround, which has its own consequences, as usage is expected to hit 4,000 TWh by 2050. Pinsent Masons partner David Platt described China as having massive loans, long tenor, and no defined risk analysis. Financiers were pained by commercial rates .

There is also a recurring problem of big Chinese banks not committing to 40 ASIAN POWER

Emerging markets are filled with blockages that prevent developers from accessing investments or loans themselves.

bid deals. Moreover, if the project has a Chinese sponsor or contractor, the country will give them a push to be a contractor that has a long-term role, either as an investor or operator or both.

Banks also look to Sinosure, government, sponsors, and land to shield themselves from risks, he said.

China was not discussed without mention of the One Belt, One Road initiative. Platt went on to say that the government had assigned high priority to other projects covered by this initiative, but there is no difference between financing for projects outside and inside the OBOR. This was one of the topics discussed at POWER-GEN Asia, the region’s largest gathering of professionals from the electricity sector. The event took place on 18-20 September 2018 at ICE, BSD City, Jakarta, and attracted over 9,280 industry experts from more than 58 countries.

Ministerial summit opening POWER-GEN Asia

Complete electrification The location also marked a unique opportunity for international suppliers to engage with Indonesia’s key stakeholders that are looking to complete full electrification by 2019. Overall 61 conference sessions ran concurrently during the three-day event, attended by a record of 1,132 industry professionals.

The official launch of Asia Power Week 2018 took place at the packed Opening Ministerial Summit. Opening speeches and presentations were provided by vice president of the Republic of Indonesia H.E. Yusuf Kalla; Indonesia energy minister H.E. Ignasius Jonan; Agency for Research and Development of Industry (BPPI) head Pak Ngakan Timur Antara; General of Electricity secretary directorate Pak Agoes Triboesono; Cirebon Power Indonesia president director Dr. Heru Dewanto; Wartsila Energy Solutions president Dr. Javier Cavada; and Clarion Events director of national conferences Nigel Blackaby.

Aligning with the industry See Kenn Lee, senior sales manager, GE Energy, said, “POWERGEN Asia brings together the whole power industry to learn and share our experiences from each other. It is here that we come together to align ourselves and to really take the industry to an even higher level.”

Nick Rastall, portfolio director Asia of Clarion Energy, commented, “The sheer volume of exhibitors already confirming their attendance at next year’s event speaks for itself. We thank the exhibitors and sponsors. and especially our event partner MKI for making this edition of POWERGEN Asia a record breaking success.” The next Asia Power Week will take place on 3-5 September 2019 at MITEC in Kuala Lumpur, Malaysia, where it will be joined by Asian Utility Week and DistribuTECH Asia.