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8 OPPORTUNITIES: WWF keeps score on CSPO consumption
PURCHASING
36 CASE STUDIES: Intelligent eco-township on Nanjing island 42 PEOPLE: Black & Veatchโ s Dr Cheong Hoe Wai on angling for business 48 EDITORIAL: The Electric Vehicle Paradox
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Contents
cover
From the managing editor’s desk
5
(see pages 16–32)
OPPORTUNITIES
6
China powers ahead with clean energy
6
Strategic adjustments will be made to the country’s energy structure in the next five years, with focus on development of nuclear, hydro, solar, wind and biomass
WWF keeping score, urging for action
The recent history of the solar photovoltaic industry has been nothing short of colourful. The euphoria of a boom was followed by a severe downturn. Today, however, it has found a new frontier and, perhaps, a new lease on life.
8
Palm Oil Buyers’ Scorecard shows only half the palm oil used by 132 companies assessed is sustainable
Green momentum builds up in China
Solar industry looks to Asia
Troubled solar industry looks to Asia 12
Financial subsidies and property tax deduction being considered for green builders
Cost-effective water disinfectant to play crucial role in the Accelerated Rural Water Supply Programme
14
Keeper of Malaysia’s FiT
26
“We need to hold together and hang in there to get through this difficult time.”
“If you don’t comply at the point of submission, you don’t qualify.”
Shi Zhengrong, APVIA chief chairman
Badriyah Abdul Malek, SEDA Malaysia CEO
Solar installations to grow 15.5% but revenues remain flat Electro-chlorination at the brim in India
18
21
Malaysia a hotbed of opportunities for PV
29
First batch of companies with FiT approval for solar identified
Solar leaders share their thoughts on the industry going forward
China ups target to 15 GW by 2015
22
Wanted: Policy support and strategic financing
23
Industry giants take 25 positions in Southeast Asia
Singapore creates solar hub
30
Recognition for pioneers
31
Leasing the sun’s energy
32
Sunseap on how its solar leasing scheme, the first of its kind in the region, works
•
Sino-Singapore Nanjing Eco Hi-tech Island (see page 36)
EDITORIAL
48
EV projects bearing seeds of failure
48
Andrew McKillop on why electric cars don’t make sense
Dwarfs with tall shadows 50 52
INFORMATION
54
Banking on dollars, sense and profitability
54
Rising consumer awareness fuels sustainable business
CASE STUDIES
34
PEOPLE
Low-carbon Ahmedabad: Utopian dream?
34
Angling for opportunities 42 around the world
Intelligent eco-township on Nanjing island
36
WATER revives a dead river
38
“The appraisal of projects will be more stringent than cases involving straight bank loans.”
42
Tengku Datuk Zafrul Tengku Aziz, CEO Maybank Investment
“Power and water demand continues to grow in Southeast Asia.”
“The future is in clean energy. That’s why we are putting our money where our mouth is.”
Dr Hoe Wai Cheong, Black & Veatch
Mumtaz Khan, CEO Maybank MEACP
Running on star power to save the planet
44 Carbon footprints vary in sizes and shapes
“I will plant a tree for every activity that is done in my name.”
Railway giant lights way for energy conservation
40
Indian Railways gives 1.4 million CFLs to its employees for their homes
Sembcorp manages total 41 water cycle at Suzhou port Singapore company takes charge of entire water cycle at Zhangjiagang FTP Zone
•
Any initiative to reduce a corporation’s carbon footprints must start with the measurement of carbon emissions
Gisele Bundchen, best international green and responsible celebrity award winner
Moulding a greener future with packaging
56
Green rating cannot be a tick-the-box exercise 46
Telic Paper MD Jack Chin on how his company became a Sony green partner
57
Green buildings labels that are effective must consider the people that lie at the heart of sustainable communities
News briefs
60
Homework
64
The team Editorial Editor: Lim Siang Jin Managing editor: David Lee Boon Siew Assistant editor: Siaw Mei Li Contributing editors: Ann Teoh, Jason Tan Contributing writers: Eleanor Chen, G Danapal, Stephen Ng, Bhavani Prakash, Suvarna Beesetti, Tan Su-Yin, VK Shashikumar, Mallika Naguran, Jennifer Neoh-Tan, Celia Alphonsus Columnists: Shel Horowitz, Khoo Hock Aun, Prasad Modak Marketing & sales Manager: Yong Wang Ching +6012 205 7928 Lim Wan Tsau (Singapore) +65 9068 0184 Email: marketing@greenpurchasingasia.com Creative & design Khoo Kay Hong, Gordon Ling Production & advertising traffic Eddy Yap Subscription & circulation Jessica Lee, Yap Eng Jin Finance & operations Kym Chong Corporate Managing director: Lim Siang Jin Publisher Briomedia Green Sdn Bhd (924679-H) 3-3 Jalan Solaris 2, Solaris Mont Kiara 50480 Kuala Lumpur, Malaysia Tel: +603 6203 7681 (Malaysia) Tel: +65 9068 0184 (Singapore) Fax: +603 6211 2681 Email: editor@greenpurchasingasia.com Printer KHL Printing Co Sdn Bhd (235060-A) Lot 10 & 12, Jalan Modal 23/2 Seksyen 23, Kawasan Miel Phase 8 40000 Shah Alam, Selangor, Malaysia Tel: +603 5541 3695 Fax: +603 5541 3712 © 2012: Briomedia Green Sdn Bhd Letters and articles are welcome, and should be addressed to: The Editor at Green Purchasing Asia 3-3 Jalan Solaris 2, Solaris Mont Kiara 50480 Kuala Lumpur, Malaysia Email: letters@greenpurchasingasia.com Endorsed by • Ministry of Energy, Green Technology and Water, Malaysia • International Green Purchasing Network
Disclaimer Briomedia Green Sdn Bhd (924679-H) believes that the information published at the time of printing is correct. The views expressed in the articles are not necessarily those of the publisher. While the publisher has taken reasonable care in compiling the magazine, it shall not be liable for any omission, error or inaccuracy. Editorial contributions are welcome but unsolicited materials are submitted at the sender’s risk. The publisher cannot accept responsibility for loss or damage. All rights reserved by Briomedia Green Sdn Bhd (924679-H). No part of this publication may be reproduced without the publisher’s written permission.
Paper: Cover 180gsm Ningbo artcard PEFC; Text 80gsm Royal Express Silk PEFC/FSC
From the managing editor’s desk David Lee Boon Siew boonsiew@ greenpurchasingasia.com
The solar industry is in trouble. The blame game has started, and it looks like China’s photovoltaic manufacturers are getting the brunt of it for unfair practices that drove prices so low that the Europeans and American producers are finding it impossible to compete. As I write this, news has just filtered in that British oil giant BP is exiting the solar industry after being in it for more than three decades, since shortly after the oil crisis shook Europe in the 1970s. I read this together with what chief executive of BP Alternative Energy Katrina Landis told Recharge in 2010: “You simply cannot compete with China’s ability to produce PV panels that have the quality required to satisfy Western customers.” On hindsight, the industry had it so good and for so long – thanks to Europe’s fantastic demand – that everybody wanted a share of the PV manufacturing pie. And China, being the world’s maker of almost anything, got into it and took for itself more than half the cake. They also drove prices so low that solar energy has reached grid parity in a few places. From 1990 to 2010, solar PV module production grew 500 times, according to the European Commission Joint Research Committee (JRC) status report last September. Few industries can outdo that. But in the process, the industry failed to read market signals. The Eurozone debt crisis cut solar spending, and manufacturers found themselves with huge inventories that they cannot sell. The Chinese are pretty upset that they are being blamed for the collapse
of US’s Solyndra and other problems the industry is now experiencing. They feel they should be given credit for the push to grid parity, which will be a big plus for clean energy. I was in Singapore for the International Energy Week (SIEW) on October 31st and heard speeches from the biggest Chinese players in the market, including Suntech Power founder Dr Shi Zhengrong, nicknamed the Godfather of Chinese Solar. He is the newly-elected head of the Asian Photovoltaic Industry Association (APVIA), a body made up mainly of Chinese and Taiwanese PV manufacturers. Its planned activities include fighting the anti-dumping lobby, which Chinese manufacturers are battling on all fronts, as a win by the lobby will affect their fortunes in the growing US PV market. China is currently seen as the saviour of the Chinese manufacturers as it has introduced feed-in-tariffs (FiT) for solar. The government has also announced revised targets of 15 GW by 2015 to mop up the excess stock of Chinese producers. Asia will be solar’s golden goose. China, India and Japan will be wooed. Southeast Asia is a small but growing market, with Malaysia being the latest hot destination as it introduced FiT for renewables last month. Happy reading, and to all our readers, I wish you a great green new year!
Next issue: Green retrofits The current stock of buildings and cities represents a rich ground for green retrofits. Owners should take a serious look at how they can translate long-term energy savings into profits.
•
opportunities
China powers ahead with clean energy Clean-coal technologies being developed as 70% of energy used is from this source US$150 million to establish a Sino-American clean energy research centre
•
US$5.7bil Cleantech investment in China (Jan – Sept 2010)* *The sector raised US$4.78 billion in 2009, US$1.43 billion in 2007
The Chinese government plans to increase the proportion of non-fossil energies as a percentage of total primary energy consumption to 15% by 2020 while reducing CO² emissions by 40–45% compared to 2005, said Chen Zongxing, vice-chairman of the National Committee of the Chinese People’s Political Consultative Conference, at the opening ceremony of the 2011 China International Gas Energy Summit–International Forum on Biogas Industry. The country will strongly promote strategic adjustments to its energy structure and focus on the development of non-fossil energies, including nuclear, hydro, solar, wind and biomass, over the next five years by prioritising energy conservation, availability of a domestic supply, diversified development and environmental protection, Chen added. Organised by Henan Provincial Department of Human Resources and Social Security, Henan Provincial Bureau of Foreign Experts Affairs and the municipal government of Anyang, together with a number of associations, including China Renewable Energy Society and China Biogas Society, the “Promoting the Development of China’s Gas Energy Industry and International Cooperation” -themed event was held in Anyang, Henan province, recently. As a leader in China’s clean energy industry, Anyang-based Zhenyuan Group has made great strides in the development of biogas by establishing a comprehensive ecosystem that transforms organic waste, including sludge, garbage and animal wastes, into harmless natural gas using advanced technologies, providing strong support for the rapid development and efficient utilisation of clean energies. In addition, the company has entered into letters of intent with the municipal gov-
Clean use of traditional fossil energies, especially coal resources, will be viewed as a strategic option in adjusting the traditional energy structure
ernments of Dongtai, Jiangsu province, and Dingzhou, Hebei province, to fully promote the development of the clean energy sector. A number of countries, including China, have begun to count on clean technologies as the adverse impact of CO² emissions has become increasingly apparent and using clean technologies, such as coal gasification and liquefaction, can improve the use of coal and meet global energy demand while reducing the negative impact of the use of traditional energies. Four clean technologies were cited among the seven strategic emerging industries detailed in the Decisions on Accelerating the Development of Strategic Emerging Industries released by the State Council of China in October 2010. Gao Shixian, assistant director at the Energy Research Institute under the National Development and Reform Commission, indicated that in China, much emphasis is being given to figuring out how to use coal in a clean
way as 70% of energy in the country is generated from coal and it is still not possible to exclusively use new or renewable energies. While China is gradually moving towards the use of more clean and recyclable energies, clean technologies and clean use of traditional fossil energies, especially coal resources, will be viewed as a strategic option in adjusting the traditional energy structure. The country has increased its efforts in research and development of clean coal technologies and included these technologies in China’s Agenda 21 – the plan to elevate China to the status of a moderately developed country by the middle of the 21st century – while developing a special framework for clean use of coal. At the same time, China has strengthened its cooperation with other countries in the application of clean technologies. For example, along with the US, it has promised to invest at least US$150 million to establish a Sino-American clean energy research centre, which will be engaged in joint research projects for energy-saving buildings, clean coal technologies and clean energy vehicles, among others. Industry analysts believe it is also feasible for the government to guide industry players in developing low-carbon technologies through the implementation of a series of measures, including tax reductions and incentives. Notably, Jiangxi Province-based Lattice Power has made the list of the World’s Top 100 Enterprises in Clean Technologies for two consecutive years with its unique silicon substrates-based semiconductor lighting technology. Meanwhile, the clean technology sector has also become increasingly attractive to investors. The sector raised US$4.78 billion in 2009, compared to US$1.43 billion in 2007. During the first three quarters of 2010, the amount of funding raised climbed to US$5.7 billion. Industry analysts said investments associated with policies by the central government to boost the development of the new energy industry, including the Decisions on Accelerating the Development of Strategic Emerging Industries mentioned above, will continue to grow. – Nanjing Shanglong Communications
GPAâ&#x20AC;&#x2122;S NEW VOCABULARY
ECOSYSTEM Every industry is a community of synergistic stakeholders. Each of them interacts, creates and derives values within its business ecosytem. If you are involved in green businesses, we want to hear from you. Our stories and reports could promote your interest and in turn profit the overall business ecosystem as well.
opportunities
WWF keeping score, urging for action
by looking at their commitment to, and use of, palm oil certified to the internationally-recognised standards of the RSPO. Most of the companies scored in both 2009 and 2011 have taken strides forward, showing how the use of sustainable palm oil is slowly becoming more mainstream. Released at the 9th RSPO in Kota Kinabalu, Malaysia, the scorecard, which assesses both RSPO members and non-members, also shows that 87 of the 132 companies (66%) surveyed have committed to 100% RSPOcertified palm oil by 2015 or earlier, an encouraging sign that could spur further market development. However, nearly half of the retailers and more than a fifth of manufacturers scored poorly on taking responsibility for the impacts of their palm oil sourcing. “The leading companies in the scorecard demonstrate that it is possible to source certified sustainable
Leading companies show sustainable palm oil sourcing is possible Greater buyer transparency needed to strengthen growth of supply
Companies in Europe, Australia and Japan are buying more certified sustainable palm oil than before, but urgent action is still needed to avoid the irreversible loss of tropical forests, according to WWF’s latest assessment of the industry. “There are options available for almost any company to buy certified sustainable palm oil (CSPO). Yet the WWF Palm Oil Buyers’ Scorecard shows that only half the palm oil used by the companies we assessed is sustainable,” says Adam Harrison,
senior policy officer for WWF UK and WWF’s representative on the Roundtable on Sustainable Palm Oil (RSPO) executive board. “It is clear that some manufacturers and retailers have fallen behind on their commitments to 100% sustainable palm oil, while others haven’t even started.” WWF’s Palm Oil Buyers’ Scorecard 2011 – an update of the first scorecard published two years ago – measures 132 major retailers and consumer goods manufacturers
The WWF Palm Oil Buyers’ Scorecard 2011 in numbers
44
21
retailers
committed to CSPO
25
goods 88 consumer manufacturers
not committed to CSPO
101*
companies use
1.5 Mt
132 ASSESSED
87
committed to use CSPO by 2015
of CSPO
*out of the 132
132
COMPANIES
companies use
3.6 Mt
9
of palm oil in total
have applied to join RSPO
103
Amount of palm oil produced globally in 2011 (in 2020, this ƥgure may reach 77 Mt/year) Mt: million tonnes
RSPO members
20
50 Mt
23
companies
not RSPO members
6
companies
68
reported on their palm oil use to RSPO
CSPO: Certified Sustainable Palm Oil
7
have not disclosed how much palm oil they use at all
27
companies
42
companies
companies
0 to 1,000 tonnes*
1 1,00 1,000 00 00 to 10,000 tonnes*
27
companies
10,000 10,0 0 000 to 50,000 0 tonnes*
*palm oil used per year
Source: Adapted from WWF Palm Oil Buyers’ Scorecard 2011 ©WWF, developed by Catalyze Communications •
50,000 to 100 0,000 tonnes* to onnes* 100,000
Over 100,000 tonnes*
GPA’S NEW VOCABULARY
LIVING CASES Real life offers authentic stories and case studies for business success: Pitfalls to avoid and opportunities to tap into. We call them Living Cases. These Living Cases have the potential to connect you with markets, products and suppliers to add value to your business. GPA will devote 60% of its pages to case studies – and we support the cases afterwards via regular updates on our website.
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opportunities
palm oil to cover most or all of their palm oil usage, so there are no excuses for companies not to take action now,” says Harrison. “But 2015 is just around the corner – all companies, even some of the top performers, need to move faster. Only then can we ensure that the momentum gained by the RSPO is not lost and avoid the negative impacts of irresponsible oil palm plantations on forests, wildlife and communities.”
Leading companies, large and small, show the way The scorecard shows that even companies dealing in very large volumes of palm oil, such as Nestlé and Unilever, which each scored eight out of a possible nine points, can act responsibly. Other major companies handling smaller but still substantial volumes of certified sustainable palm oil, namely IKEA, Royal FrieslandCampina and United Biscuits, scored eight or more points. Of the companies sourcing
•
mid-range volumes of palm oil, manufacturers like Burton’s, Cadbury, Premier and Remia and retailers such as ASDA, Carrefour, Morrisons, Sainsbury’s and Tesco have also done well. (see http://bit.ly/vwyuOF for a breakdown of company performance according to size of palm oil volumes used.) However, disappointingly, 17 of the 43 retailers and 15 of the 89 manufacturers assessed scored at three or below, showing that many companies are taking little or no responsibility for the negative impact of their palm oil use on forests, species and people.
Progress still too slow The supply of certified sustainable palm oil has grown dramatically since WWF released its first Scorecard in 2009, and now stands at 5 million tonnes (10% of global palm oil production), with only about half of the sustainable palm oil produced being sold. This mirrors the situation in
2009, which is why WWF is renewing its call to companies to take their responsibilities more seriously and urgently.
Transparency crucial for growth A major disincentive to growers of sustainable palm oil to get further certification is the lack of transparency about the amount of palm oil that companies use. When WWF asked companies to share the amount of palm oil they use, as well as how much of that oil is certified as sustainable, most companies only disclosed a range of usage and many refused to provide any data at all. “Unless there is greater transparency, oil palm growers will remain unwilling to commit to certification,” says Harrison. “If we want growers to act responsibly, buyers of palm oil need to show what their future demand for certified sustainable palm oil is going to be.” (Reproduced with permission from WWF Singapore)
GPA’S NEW VOCABULARY
CONSORTIUM Many businesses position themselves as consortiums of established partners. Together, these partners add relevant credentials and a track record for mutual advantage. Get to know who these consortiums are, what are their business models, what sets them apart, and why these teams are thriving.
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opportunities
Green momentum builds up in China Guangming New District to be a demo district for green buildings Jiangsu Province to invest 200 million yuan in energy conservation in 2012
The past few years have seen significant growth in green buildings in China, with the majority of such buildings today being demonstration projects and government buildings. Despite rising interest in such developments, barriers remain as the construction of green buildings is associated with the wide use of energy conservation technologies and environment-friendly materials, which may increase up-front costs for developers. Some architects resist green building projects as they do not see the value, and such viewpoints attracted the attention of the participants at the 8th International Green Habitat Forum held recently in Zhenjiang, Jiangsu Province. However, analysts says green buildings bring many benefits to developers, including reduced maintenance and operational costs compared to conventional buildings. Government support at all levels is key to expanding construction of green buildings.
•
Subsidy for green buildings Many speakers at the forum say China is considering subsidising green buildings according to the level of “greenness” of the building. This was also the message from Qiu Baoxing, vice-minister of China’s Ministry of Housing and Urban-Rural Development, at the Energy Conservation and Emission Reduction Summit Forum on China’s Large Public Buildings held on November 8th. Qiu said green buildings with a three-star designation are expected to benefit from preferential policies. They will not only get favourable treatment by local governments, but also receive financial subsidies from the central government. In addition, if China starts to levy a property tax, three-star green buildings may get tax deduction. The three-star certification programme is an integral part of the
national Green Building Evaluation Standard (GBES), which defines green buildings as “buildings that save a maximum amount of resources (including energy, land, water and materials), protect the environment, reduce pollution while providing healthy, comfortable and efficient space for their occupants, and existing harmoniously with nature” throughout their life cycle. China’s Ministry of Housing and Urban-Rural Development has set up a preliminary incentive programme. The ministry will subsidise new three-star certified green buildings at the rate
in China each year, of which 80% are deemed “energy-guzzling”. The country is already home to buildings taking up 40 billion sq m of built-up area, and energy-efficient ones account for only a “very small share”. Energy consumption in buildings accounts for 40% of the country’s total energy use, and the proportion continues to rise. Promotion of energy-efficient buildings is therefore imperative for sustainable development. Because of the benefits that can be derived, the Chinese government plans to subsidise construction projects that deploy renewable energies and carry out research on solar energy, ground source heat pumps and wind energy, said Qiu. Besides support from the central government, many local governments also plan to increase support for green buildings and are designing and implementing new policies. Zhou Lan, director-general of Jiangsu Provincial Department of Housing and Urban-Rural Development, says the province has seen significant growth in
Artist impression of a proposed green housing project in Tianjin Eco-City
of 75 yuan (about US$12) per square metre. In addition, small towns where newly-built green buildings take up over 30% of the total land area will be named “green towns” and will be granted one-off subsidies of 10 million to 20 million yuan. A precise definition of the policies will be available during the International Conference on Green and Energy-Efficient Building & New Technologies and Products Expo to be held in Beijing in March. Some 2 billion sq m of built-up area is added to the property market
green buildings in the last few years. Around 90% of the province’s “energy conservation” buildings were built in the last five years. This year (2012), the department plans to invest over 200 million yuan to implement energy conservation technologies, namely, the ground source heat pump. In addition, Shenzhen plans to turn Guangming New District into a demonstration district for green buildings. Similar projects are on the drawing board across the country. – Nanjing Shanglong Communications
GPAâ&#x20AC;&#x2122;S NEW VOCABULARY
PROSPECTS Going green is increasingly important to business today. We can help you maximise results by improving your market visibility and connecting you with untapped prospects. By providing market communications support to green vendors and purchasers, we assist in building a sustainable future that is also economically viable.
opportunities
Electro-chlorination at the brim in India Globally, 2.5 million tonnes of chlorine worth US$1.4 billion used to disinfect water
Electro-chlorination, which is accepted globally as the most costeffective and suitable disinfectant for water, has a huge market in India, considering that 72% of the population lives in rural areas where there is a pressing need for clean water. The Indian government has earmarked 20% of the funds from the Accelerated Rural Water Supply Programme to improve water quality and electro-chlorination is expected to play a crucial role here. Industrial investments, coupled with urban and rural water quality requirements, will make electrochlorination a preferred choice for water disinfection for government bodies and industries alike. Electro-chlorination is used for “polishing” or disinfecting water after it has undergone tertiary treatment. The major application areas for electrochlorination equipment in India include the power sector, cooling towers, rural water supply, municipalities and swimming pools. The power sector, cooling towers and municipalities generally use continuous chlorinators as they have the expertise to efficiently manage the equipment. Swimming pools use both continuous and batch chlorinators, while in rural areas batch chlorinators, which are bulky but easy to operate and maintain, are preferred. Continuous chlorinators are compact but are operationally more complex and users need some expert knowledge to handle them. As such, these are mainly used in organised sectors like power and oil refineries. Electro-chlorination is an efficient and proven technology for removing disease-causing pathogens and bacteria. Sodium hypochlorite (SHC), which is produced from the electrolysis of seawater, is used as a chlorinating agent. The liquid SHC is corrosive to •
A major market restraint is the low awareness among end-users
Industry experts forecast it may take another decade for mainstream acceptance of electrochlorination technology
metallic materials so plastic containers are used for storage. Onsite production or generation of SHC is a preferred option in many countries and across end-user industries. Disease-causing pathogens such as E coli, Giardia cysts and Cryptosprodium spores can be found in cattle faeces which come into contact with water through seepage into the ground. Another pathogen, Legionella, is generally found in water
from cooling towers, swimming pools and domestic hot water systems. These can be effectively controlled through electro-chlorination. Worldwide, 50 million tonnes of chlorine is produced annually, of which 2.5 million tonnes, valued at US$1.4 billion, is used for disinfection of water. European countries are contemplating the use of ozone as a disinfectant for municipal water but electrochlorination remains the preferred technology for industrial water disinfection. Even though alternative disinfectants have several benefits, electro-chlorination is preferred for the following reasons: • Easy access to and low prices of raw materials such as salt or seawater, water and electricity • Onsite generation of SHC • Can be easily controlled • Storage is not a problem if concentration is below 1% by volume. Most companies providing electro-chlorinators in India have an ISO 9001:2000 certification and abide by the Bureau of Indian Standards. The Central Pollution Control Board (CPCB) under the Water (Prevention & Control of Pollution) Amendment Act 1988 is responsible for monitoring water quality and maintaining standards. It advises the central government concerning any matter related to water and air pollution, and provides technical assistance to state boards on these matters. According to a CPCB directive, chlorine concentration of less than 0.2 mg/l should be maintained for tap water. Anything in excess of this limit may be carcinogenic with prolonged use. The major market restraint is the low awareness among end-users. As a result, the electro-chlorination market size has not grown much in the past two to three years, according to industry experts. The Brihanmumbai Municipal Corporation (BMC) uses 4,300 tonnes of chlorine, spending about Rs 1,300 million (US$24 million) per year for disinfection of water. This reflects the huge electro-chlorination market potential in India. According to industry experts, it will take another 5–10 years for electro-chlorination to be accepted as a potential disinfection – Frost & Sullivan technology.
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Solar
in d u s t r y
looks
to asia
cover
opportunities
Troubled solar industry looks to Asia
with US unit Solar World leading the charge against the Chinese for unfair competition. Counter charges have been leveled by Chinese manufacturers.
Huge inventories and excess capacity plague manufacturers
Downturn temporary At a solar leaders’ summit the day Prices dropped to historic lows this year, leading to fire sales after the election, chairman Shi was understandably optimistic in his By David Lee speech, describing the present scenario as a “tempoOn October 31st 2011, the rary downturn”. He says the spanking new Marina Bay market was “overheated” in Sands exhibition and conthe past few years and marvention centre played host ket growth failed to match to the who’s who of Asia’s investments in capacity solar industry luminaries. building. “We need to hold They were all there for the together and hang in there historic first election of to get through this difficult office bearers for the Asian time.” PV Industry Association To lift the industry, (APVIA). solar leaders like Shi and It was no surprise that European PV Industry the Chinese dominated the Association (EPIA) chief meeting, as solar players Murray Cameron say Asia from China have swamped must deliver on solar takethe trade. Shamsudin up. By Asia, they mean Khalid, the president of China and India – the two the Malaysian Photovoltaic giants with energy demand From left: APVIA secretary-general Tom Wu (also secretary-general of Industry Association, and to mop up excess capacity. Taiwan Photovoltaic Industry Association), APVIA chief chairman Shi Zhengrong and Mi Yue, executive vice-chairman of Shanghai New Energy a few European and other Incidentally, these two Industry Association who was instrumental in the formation of APVIA Asian representatives were countries are not exactly the only non-Chinese presgenerous with their FiT Stocks are piled up high in ent, and they stood out in a roomful of rates. Latest bids for PV quotas in India warehouses and retail prices have hit Mandarin-speaking businessmen. have revealed prices that would have The election saw high-profile Sun- historical lows, even below cost. Excess been unheard of last year. production capacity has forced some tech Power Holdings Co founder and Shi says: “We believe by 2015, to lay off workers. A few have had to CEO Dr Shi Zhengrong being made Asia will install about 20 GW per year. fold up. The blame game has started, chief chairman, and when the meeting About a quarter of global demand will was done, everybody posed for photos be from Asia by then. Recently, China with each other. The banquet that is installing or has installed over 2 GW. followed the historic meeting, surprisIndia is following fast. Japan too. We ingly, served French cuisine paired see Asia being one of the major marwith red wine that was copiously drunk kets in the world in 2015 and beyond.” at every table. As the night wore on, His optimism is founded on the the business jackets and neckties came declining cost of solar materials, with off and sleeves were rolled up. Soon, silicon now trading at US$40 per kg, people were deserting their seats to go or 10% of what it used to cost. He around tables, offering toasts. projects the price of solar to be about It was a wonderful party, but the US$0.14 per kWh by 2015, a plunge merriment of that night belied the worfrom the US$1 per kWh that used to be ries, and even panic, that have gripped industry’s target. “We need to hold industry players around the world “Grid parity has arrived in some together and hang in today. Feed-in tariff (FiT) cuts or cancountries today; it took less than ten cellations by several European counyears,” he says. By 2015, he reckons there to get through tries, including Germany, the world’s half the countries with solar plants will this difficult time.” biggest consumer of solar energy, have reach grid parity due to reduced cost landed many solar producers in serious – Shi Zhengrong, APVIA chief of solar materials, global collaboration, chairman and Suntech founder trouble. and government’s FiT initiatives.
•
The first-elected presidium members of the Asian Photovoltaic Industry Association (APVIA) were announced on October 31st at the inaugural PV Asia Pacific Expo in Singapore. Dr Shi Zhengrong was appointed chief chairman by members comprising 670 PV enterprises, 23 industry associations and 15 research institutions. “Asia is home to a number of leading PV companies with excellence in manufacturing, technology and R&D, and boasts of amazing solar resources. Through APVIA, the PV ecosystem will collaborate to develop the best technologies, achieve economies of scale, and identify market opportunities to achieve grid parity both in Asia and the world,” says Shi. APVIA’s work plan includes enhancing communications with other regional PV associations, conducting anti-dumping and anti-FiT investigations and helping to resolve international disputes.
“In terms of new markets, the industry has reached an interesting stage where the cost of PV has come down very rapidly.” – Prof Martin A Green
Polysilicon spot and contract price Q1’09–Q4’12E Long-term contracted price range
21 3
$9
0
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Average spot US$39.50 (mid-October)
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Cost to drop further Prof Martin A Green, Australian PV expert and newly elected co-chairman of APVIA’s academic committee, says the cost of PV modules will go down by 60% between 2010 and 2020. “In terms of new markets, the industry has reached an interesting stage where the cost of PV has come down very rapidly. With prices going down over the next decade, more and more places in the world will reach that stage of retail competitiveness. And by the end of the decade, you reach the other side of wholesale electricity. At the present stage, it is still quite fragile.” Green says they expect polysilicon
The first APVIA election meeting held on October 31st, 2011
$8
EPIA’s Cameron, of Germany’s Phoenix Solar AG, says the previous decade for solar belonged to Europe where, “rather ironically, the largest market for PV in the world is also one of the least sunny places.” “In Germany (the world leader in solar installations), what’s been happening is basically just substitution. But Asia is where you have a real need, where economies are growing, where there is enormous demand for new generation capacity. Solar PV must play that role here. This is where the next ten years of PV destiny will be made.” Asia has not resorted to using solar energy in a significant way as it is far more expensive than electricity from fossil fuel. However, things are changing. Many Asian countries, led by China and India, are prepared to usher in solar and other renewables by introducing FiT regimes. And their timing perfectly coincides with the lowest prices in history.
Voice of Asian PV industry
$1
– EPIA chief Murray Cameron
Polysilicon price (US$/kg)
“Asia is where the next ten years of PV destiny will be made.”
spot price to be “in the mid-US$30s” by 2012, with contract prices stepping down on a multi-month lag (see chart below). On top of that, he foresees cell efficiency will reach 20% at US$0.50 per watt production by 2020. Ahmad Hadri Haris, senior director of public affairs for thin film giant First Solar, says current manufacturers’ excess capacity is between 30 and 40%. “What it means is that you have 30–40% more product inventories than what the market requires,” he says. “That’s why you see some companies selling lower than cost. That is not sustainable. They are not looking at long-term business. Tier one manufacturers are in it for the long haul. For other players, they don’t care for
E: estimated Source: Goldman Sachs Research estimates •
opportunities
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“Manufacturers now have 30–40% more product inventories than what the market requires.”
100 95 90 85 80 75 70 65 60 55 50
20
20
18
20
16
20
14
20
12
20
10
•
Expected reduction in investment for new cell fabrication per MWp
20
Market shifts Some strong market trends are emerging from that drop in cost. A recent Lux Research report predicts that solar markets will shift dramatically from 2010 to 2016 – Europe from over 80% of the market to only 43%, Asia Pacific from 13% to over 28%. North America will go from 6% of the market in 2010 to 19% in 2016. The Middle East and Africa, Central and South America, and the rest-of-world segments remain small, given a lack of subsidies in big countries – though plenty of upside exists due to good sunshine and poor grid coverage. Grand predictions aside, the Asian market is still about energy pricing. Asia’s governments are cautious about putting too many apples in the cart, although there are more solar modules
Many hands make light work. Solar leaders at the launch of the PV Asia Pacific exhibition at Marina Bay Sands on November 1st, 2011
Investment per MWp in % (2010 = 100%)
quality and just want to push prices down and penetrate markets.” Hadri thinks prices have hit rock bottom. “Market correction was due to the economic crisis in 2009. Investors didn’t have any more money to invest, and they cancelled projects. This year, it was due to oversupply as new players came on board. “If you look at the price of polysilicon, it has come down even lower than pre-2008 and is now in the region of US$40 per metric tonne. At one time, the spot price was US$400. Maybe people can squeeze it some more. But in terms of reduction, it will not be huge.”
– Ahmad Hadri Haris, First Solar senior director, public affairs
Year Source: International Technology Roadmap for Photovoltaic Results 2010. PVGroup, SEMI
produced in Asia Pacific than in the rest of the world. Shi Dinghuani, counselor of the State Council of China and president of Chinese Renewable Energy Society, says using solar is ten times more costly than using coal in China. However, he says, the government has signaled intentions of buying PV power for commercial and residential purposes with the current PV target at 1.5 GW. Cost aside, the solar industry is a huge economic engine in its own right and is a job creator. Shi Zhengrong says
the Asia PV industry has seen annual growth rates of over 55% and it has provided huge growth opportunities. “Through innovation and economies of scale, Asia PV enterprises have dramatically reduced the cost of PV generation. We have become an economic engine in Asia. For every MW of PV installed across the world, 35 jobs are created throughout the PV industry supply chain. Of that number, 15 jobs are downstream, like project development, installation, maintenance and financing. It’s very localised.”
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Installations to grow 15.5% but revenues remain flat Demand shifts from Europe to Asia and North America Despite growing installations, falling prices mean little growth in revenues
Share of global PV demand (2010)
Rest of the world (9%) Japan (5%) United States (5%)
Germany (42%)
TOTAL 18.2 GW
Italy (21%)
Other Europe (18%)
Source: SolarBuzz
Top four heavyweights in solar capacity uptake: Japan, China and India will emerge to drive significant volumes, and the US will come forth as a heavyweight given the government’s support of tax equity through 2016 and myriad state-level programmes
Solar subsidies have been capped, cancelled and cut over the past several years, but solar installations have continued to rise – driven primarily by increased demand from one market: Germany. However, as manufacturers approach near-term limits on cost reductions, German demand will begin to decline. As a result, demand will shift to Asia and North America and the solar market will grow in terms of megawatts installed, but revenues will stay flat as price declines outpace volume growth. A new report from Lux Research finds that solar demand will shift to a broader range of markets over the next five years, based on analysis of levelised cost of electricity (LCOE) and internal rate of return (IRR) across 156 countries, states and regions. Japan, China and India will emerge to drive significant volumes, and the US will come forth as a heavyweight given the government’s support of tax equity through 2016 and myriad state-level programmes. “The global solar market for grid-connected systems will grow from 15.8 GW in 2010 to 37.5 GW in 2016, a compound annual growth rate of 15.5%,” said Lux Research analyst Matt Feinstein. “However, price declines will
outpace volume increases, at least at first – the industry will actually shrink on a revenue basis from US$64.4 billion in 2010 to US$56.9 billion in 2012 before recovering to US$65.4 billion in 2016.” Among the report’s key findings: • Leading IRR markets like New Jersey (US), Australia and Greece attract attention in 2011. With subsidies, a surprising number of markets have IRRs worthy of investment by project developers today. Projected growth of global solar market for grid-connected systems
15.8 GW 37.5 GW
2010 2016
Today, the most attractive markets for residential are Australia (52% subsidised IRR), Greece (32%) and Ontario (27%) while the most attractive commercial markets are New Jersey (42%), Portugal (37%) and Hawaii (34%). On the utility ground mount side, Portugal (81%) tops the list, followed distantly by New Jersey (58%) and Cyprus (44%). By 2016, viable investment targets will increase dramatically to encompass 45 residential
markets, a whopping 88 commercial markets and 85 utility markets. • Subsidies and grid parity are not necessary to generate positive demand. An anticipated future increase in the cost of retail and wholesale power is all that is necessary to generate positive demand – even in countries without subsidies. Brazil, for example, is projected to reach a 12% unlevered, unsubsidised IRR for commercial multicrystalline silicon systems at the end of 2016 – even though solar will not yet have reached grid parity. Indeed, of 55 geographies demonstrating unsubsidised IRRs above 10% at the end of 2016, only ten will have reached grid parity. • Commercial systems reach grid parity fastest, with ten geographies there by 2016. The number of commercial rooftop markets reaching parity will grow from one in 2010 to ten in 2016, including the Dominican Republic and Nicaragua. Hawaii will be the first to accomplish residential grid parity in 2011; by 2016, a total of seven other residential markets will follow, including Italy, Denmark and Ukraine. For utility ground mount, the number remains small. – Lux Research •
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China ups target to 15 GW by 2015 Solar PV capacity-demand ratio stands at 100:33, down from 2010’s 100:41
The country is far behind developed economies in terms of PV technologies
Half of China’s 600 cities are promoting their local solar PV industries, 100 have solid PV industrial bases
China’s National Energy Administration has announced a significantly higher target of 15 GW of solar energy installed capacity by 2015, China National Radio reported on December 15th, 2011. This is 50% more than the 10 GW installed capacity revealed after Japan’s nuclear disaster last March. This is an impressive set of targets considering that installed solar capacity was less than 1 GW at the end of 2010. In July 2011, China launched its feed-in tariff mechanism for solar energy, coinciding with massive solar panel stock build-up. Industry experts expect China’s solar installations to hit up to 2 GW in 2011. According to a news item released by Solarbuzz, a globally-recognised market research business focused on solar energy and photovoltaic industries and part of US-based survey company NPD Group, China is expected to achieve 1.8 GW of •
installed capacity in 2011, equalling or exceeding the expected installation volume for Japan and the US during the same period. The country has been leading worldwide in solar cell
“A great number of PV enterprises are now experiencing significant losses and their survival is in doubt.” – Canadian Solar Inc president Qu Xiaohua production and is now aiming to lead in installed capacity of photovoltaic (PV) systems as well. Its PV installations totalled 800 MW in 2010, accounting for only 2% of the world’s total (17 GW), says Meng Xiangan, deputy director of China Renewable Energy Society. To improve uptake, the country’s PV
makers should continuously innovate and reduce costs, he adds. Another analyst pointed out that the country’s solar power generation sector is expected to achieve grid parity in eight to ten years. At that point, policies put in place by the government will have much less impact on the sector, which will see a new round of high-speed development. Last year (2011) was a turning point for the industry. From May, prices for polysilicon – a main ingredient of solar PV cells – decreased by nearly 70%, down from 700,000 yuan (about US$110,000) per tonne to 210,000–250,000 yuan per tonne today. Analysts say the capacity-demand ratio of the industry stands at 100:33, down from 2010’s 100:41. As a result of this severe imbalance between supply and demand, large numbers of PV enterprises are experiencing significant losses and their survival is in doubt, says Canadian Solar president Qu Xiaohua. Half of China’s 600 cities are promoting their local solar PV industries while 100 have solid PV industrial bases. Such figures underscore the impact of the solar industry on the nation’s manufacturing landscape. China is now able to produce nearly 90,000 tonnes of polycrystalline silicon annually, or 45% of world production, says Wang Bohua, secretary-general of the China Photovoltaic Industry Alliance. This is 100% more than in 2010 although demand for silicon is forecast to increase by only 25% year-on-year. Despite this massive capacity building, the country has not mastered core solar PV technologies nor has it built a sufficiently large domestic market for PV products. According to analysts like Meng, 2012 would be the year of industry consolidation. While China’s PV industry grew rapidly, with an industry chain more comprehensive than any other, it is nevertheless far behind the developed economies in terms of PV technologies. Current market conditions may force its manufacturers to gravitate towards the higher end of the value chain. – Nanjing Shanglong Communications
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“By the middle of the decade, the region is expected to contribute about 30% of the global solar market.”
Wanted: Policy support and strategic financing
– Lee Yi Shyan, Singapore’s Minister of State for National Development and Trade and Industry
Slow take-up of PV due to policy makers who lack understanding of solar Banks need to understand solar market better to expedite capital flows
Asia is sprinting ahead in photovoltaic (PV) manufacutre and export, but ironically lags behind in consuming this source of clean energy output. Industry executives mulled on this, policy needs, financing gaps and more at the Solar Leaders Summit of Singapore International Energy Week in November. The share of renewables in the global power mix will rise from 20% today to almost a third in 2035, according to International Energy Agency estimates. Investments in solar energy will mushroom to more than US$1 trillion, posing a rosy future for Asia. Addressing the opening of PV Asia Pacific Expo, Singapore’s Minister of State for National Development and Trade and Industry Lee Yi Shyan named four Asia-Pacific countries that are among the world’s top ten in this arena: Japan, China, India and Australia. “By the middle of the decade, the region is expected to contribute about 30% of the global solar market,” he says. Bloomberg New Energy Finance chief executive Michael Liebreich notes that along the steep curve of cleantech investment, solar investment moved to a new height in 2008, gaining market share from the wind for the first time. Solar in the Asia Pacific has the potential to supply 20 GW a year by 2015, says Dr Shi Zhengrong, chairman and CEO of Suntech Power Holdings Co. Nearly a quarter of the world’s demand for energy will come from Asia then, he says. The Chinese company’s operations alone produce 5 GW of solar power per annum over 30 locations.
Growing domestic markets Shamsudin Khalid, president of the Malaysian Photovoltaic Industry Association, attributes the slow domestic take-up of PV energy to policy makers who lack understanding of solar poten-
By Mallika Naguran
Solar leaders pow-wow at the summit in Singapore. From left, Shi Zhengrong, Shamsudin Khalid, Lee Seong-Ho and Chen Chern-Lin
Asia Pacific market demand for solar by region
100%
Australia Rest of Asia
75%
Japan India
50%
China
25%
0% Q1’11
Q2’11
Q3’11
Q4’11
Source: NPD SolarBuzz: Asia Pacific Major PV Markets Quarterly
tial and reliability. Lobbying strength is also not as stentorian compared to oil and gas, or even nuclear bodies. To increase the uptake by domestic markets, the panelists pointed to the importance of policies in providing access to the grid and that priority should be given to reliability of this access. Feed-in tariff (FiT) schemes in Korea and Malaysia have been rolled out. Japan announced an FiT mechanism in August but has yet
to decide on prices. A new bill was also passed to use more solar and renewables (20% by 2021) in place of nuclear. Plans include solar panels on 10 million houses by 2020.
Financing gaps The Indian government is encouraging large-scale solar installations and announced its New Solar Mission of producing 20 GW solar power by 2022. Yet providers struggle on the ground in raising much-needed capital. Lanco •
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Other views from Asia
Solar CEO V Saibaba shares some of the obstacles faced by PV companies in India. He says PV companies have to contend with utility providers in enjoying subsidies for power distribution. “Availability of financing is constrained,” he says. Lanco was first established as a utility provider ten years ago but recently diversified into solar. And borrowing isn’t cheap. India bank loans, with 14–15% interest rate are prohibitive, especially for long-term borrowing, notes Standard Chartered’s head of cleantech Sunil Gupta. Gupta describes how Standard Chartered finances the manufacture of both upstream and downstream PV materials but often grapples with downstream PV financing in particular, due •
Lee SeongHo, executive vice-president of the Korean Photovoltaic Industry Association (KOPIA)
to regulatory and stakeholder issues. The Asian Development Bank (ADB) supports 3 GW worth of solar projects in India, China and Thailand by providing capacity building and financing with innovative mechanisms to stimulate development in this sector. Zhou Aiming, energy specialist with the sustainable infrastructure division of ADB, shares how its lending criteria used to be for at least US$50 million worth of projects. However, this has changed of late. The bank hopes to help India reach its ambitious solar mission with two kinds of intervention. First, its public sector arm works with governments such as the state of Gujarat to develop solar parks, says Zhou. ADB’s private sector arm, on the other hand, uses flexible mapping to
Taiwan Dr Chen Chern-Lin of Taiwan Green Energy and Environment Research Laboratories says the country recognises PV as a key industry to reduce carbon emissions, and that, together with wind plants, PV will replace the need for nuclear technology. The country has invested substantial amounts of capital in solar technology development. The 57 PV companies in 2010 gave production values of US$6.4 billion – doubling growth from the previous year.
Shamsudin Khalid: President of the Malaysian Photovoltaic Industry Association (MPIA)
Korea Korea has high ambitions. It hopes to double its projected global market share of 15% in 2015 to 30% by 2030, says Lee Seong-Ho of the Korean Photovoltaic Industry Association (KOPIA). In 2006, the PV industry generated 21.1 MW; the government has now set a target of more than 300 MW output by 2013. Korea has an annual budget of US$80 million for PV infrastructure development, representing more than 80% of investment in renewable energy. To promote the uptake, a one million green homes subsidy programme is in place.
Malaysia Malaysia’s Renewable Energy Act was passed in 2011 with FiT and quota mechanisms. By 2015, Malaysia hopes renewables will make up 7% of the fuel mix, rising to 17% by 2020. This is based on the future scenario of reduced localised fossil fuel supply and increased net import of gas.
Dr Chen Chern-Lin, executive director of Taiwan Photovoltaic Industry Association (TPVIA)
finance small solar projects. “We’d like the country to package 10 MW and 50 MW projects together… to reach 150 MW. ADB would like to provide guarantee to commercial banks,” he adds. Where equity companies and financial institutions fund large-scale deployments, there is also interest in funding smaller developments like roof-top installations, says Michael G Potter, senior vice-president of equity firm Canadian Solar. However, he says, regulatory policies have to be in place first. The industry in new solar producing countries also needs to work with banks to help them understand the solar market better and prevent delays in getting capital, adds Potter.
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Industry giants take positions in Southeast Asia Malaysia
cost of US$600 million and employs more than 1,100 workers.
2008 The world’s largest thinfilm producer, First Solar, sets up its manufacturing plant at Kulim Hi-Tech Park in the northern state of Kedah. It is the Arizona-based company’s biggest overseas plant, with a 1,490 MW production capacity in 2011 and 2012.
November 2011 Panasonic announces decision to build a RM1.6 billion (US$580 million) wafer plant in Kulim Hi-Tech Park. Production to begin in December 2012 and will increase the company’s solar output by 50% to 900 MW.
June 2008 Germany’s Q-Cell SE, one of the leading PV companies, breaks ground for its manufacturing base in Cyberjaya, the second production facility of the Q-Cells Group. Production of solar cells started in May 2009. The core business activity of Q-Cells Malaysia is the manufacturing and distribution of high-performance crystalline solar cells. Its crystalline solar cells are also assembled to solar modules by a subcontractor in Malaysia. August 2009 Tokuyama Corporation announces decision to build polycrystalline silicon factory in Sarawak with an investment of 65 billion yen (US$835 million). Construction was to start in early 2011 with operations slated for early 2013. It will produce some 6,000 tonnes a year. October 2010 Malacca-based AUO SunPower Corp Sdn Bhd starts operations, with 60% capacity. It is expected to generate more than 1,400 MW annually of high-efficency solar cells when fully completed in 2013. This company is a joint venture between SunPower Corp of US and AUO, a Taiwan-based entity. The first phase infrastructure of the fabrication plant was completed at a
Singapore November 3rd, 2010 Norwegian firm, Renewable Energy Corporation (REC), opened one of the world’s largest integrated wafer, cell and module manufacturing facility in Tuas. At S$2.5 billion (US$1.95 billion), this is the largest single investment ever made by REC. The modules produced by REC’s 321,000 sq m plant for 2011 will offset 25 million tonnes of carbon dioxide emissions throughout its lifetime. When in full operation, the facility is expected to produce 190,000 solar modules per month, which will be exported to Asian, European and American markets. April 27th, 2011 Yingli Green Energy Holding Company Limited, one of the world’s largest vertically integrated photovoltaic manufacturers, announces establishment of its regional headquarters in Singapore to drive sales and further business development for the company. November 1st, 2011 Trina Solar Limited, a leading integrated manufacturer of solar PV products from the production of ingots, wafers and cells to the
assembly of PV modules, announces establishment of its Asia Pacific operating headquarters. The new Asia Pacific headquarters is expected to provide management functions covering administration, sales, R&D, logistics and purchasing operations to further strengthen Trina Solar’s growing presence and customer base in the region.
November 2nd, 2011 Phoenix Solar AG announces its Singapore subsidiary, Phoenix Solar Pte Ltd, as its first regional headquarters outside of Germany. November 4th, 2011 Heraeus, a leading innovator in environmentallyfriendly technologies and one of the world’s largest manufacturers of solar photovoltaic metallisation pastes, announces the establishment of its regional research and manufacturing facility in Singapore. Its centre in Tuas will specialise in a full suite of end-to-end services driven by the Photovoltaics Business Unit, comprising research and development, sales and technical services, to support the fast-growing Asia Pacific demand for solar cell products. 2011 MEMC, with over 7,500 staff worldwide and sales of more than US$2 billion in 2010, will be headquartering its global cells and modules business and related R&D operations in Singapore.
Thailand 2003 Suntech enters Thai market. Today, it provides panels for Bangchak Petroleum’s solar farm, which will become the largest of its kind in the country once the second phase of the project is completed for a combined capacity of 43.93 MW. It is now supplying seven solar farm projects in Thailand. •
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people
Keeper of Malaysia’s FiT After two deferments, December 1st finally saw the launch of Malaysia’s feed-in tariff (FiT) scheme promoting renewable sources of energy. With the dust kicked up by the rush for a share of the renewables pie having settled somewhat, it is becoming clear where the real work will be. Newly-appointed CEO of the Sustainable Energy Development Authority (SEDA Malaysia) Badriyah Abdul Malek sat down with Celia Alphonsus to address some nagging issues in this first of a two-part interview series.
Application frenzy Like a mother expecting her newborn, Badriyah and her staff had awaited the December 1st launch of the e-applications portal with high hopes. Response was beyond expectations, •
“The FiT achieved in just a few days what the SREP failed to accomplish in five years.” – Badriyah Abdul Malek CEO of SEDA Malaysia
Seated at her corner office at SEDA Malaysia’s new premises with its breathtaking view of Putrajaya Precinct 4’s lakes and bridges, Badriyah Abdul Malek looked fresh and vibrant. Her demeanour did not betray the stress of managing expectations from the government, direct licencee (DL) Tenaga Nasional Berhad (TNB), which is the main power utility company, and the renewable energy market to get the feed-in tariff (FiT) scheme rolling. Asked about her experience as CEO, Badriyah looked back on her big challenge since September 2011 and further back as undersecretary of the Sustainable Energy division of the Ministry of Energy, Green Technology and Water. This was getting all seven subsidiary legislation linked to the Renewable Energy Act gazetted and nine Renewable Energy Power Purchase Agreements (REPPAs) ironed out to the satisfaction of all parties involved. “Those rules required more time than anticipated. It detailed what the renewable energy (RE) players needed to do to get connected to the grid. It needed to articulate every single detail, the responsibilities of the players, the DL and the authorities.” This attention to detail was necessary to ensure that minimum interaction is required between the RE player and the DL so that the REPPAs could be signed quickly. This was a lesson learnt from the failure of the Small Renewable Energy Project (SREP), the predecessor of the FiT scheme, where it sometimes took years for a REPPA to be signed.
at least for solar. Within two hours, the “big boys” had taken up all available solar quotas for the above 1 MW category until 2014, totalling 120 MW. Residential quotas were also popular. The next 18 months’ quota have all been used up, and as at December 22nd, only 2.32 MW are available for the second half of 2012, and 2.5 MW for the first half of 2013. For the other three renewable energy sources – biomass, biogas and small hydro – the take-up rates were much lower, probably because the business conditions are more complex. “In terms of securing the quota, solar secured the highest at 42% for 144.3
MW followed by biomass at 118.6 MW or 35%, while small hydro contributed 65.86 MW or 19%, and biogas is the smallest contributor at 14.48 MW, which stands at 4%,” says Badriyah on the statistics as at December 5th. She is happy with the developments so far, especially the fact that all available MW capacity solar quotas for non-individuals were snapped up within two hours of the opening of the e-applications. “The FiT achieved in just a few days what the SREP failed to accomplish in five years,” she notes.
Bio-mess? Badriyah says there are several reasons why uptake of the quotas for the other RE sources was relatively sluggish. “In the case of small hydro, permission has to be given by the state government before one can tap a river
for renewable energy. SEDA Malaysia does not have authority over the state government to ensure they comply with the requests of RE players,” she says. As for biomass, she notes that there are many competing demands and uses for oil palm waste like empty fruit bunches (EFB) and there are problems of logistics in using biomass for energy. Badriyah says stimulating the demand for biomass and biogas RE installations lies in engaging palm oil millers and finding workable solutions to inherent problems. She says the cost of setting up a biomass plant runs easily into some RM80 million (US$25 million). Such a high entry cost does not produce a positive return on investment based on the current tariffs for biomass and biogas that range from RM0.27 to RM0.32 per kWh. Coupled with the sourcing and collection costs of feedstock, stimulating growth in these areas of renewable energy requires further planning and thought, she says. Badriyah is keen to emulate Thailand’s approach by using incentives to encourage palm oil millers to become energy producers. She says palm oil mill effluents (POME) can be used to generate biogas to run turbines instead of being, for example, released into rivers. By engaging palm oil millers as renewable energy players, she hopes to reduce the environmental degradation caused by palm oil plantations. “We are keen to see the millers capture POME for biogas. There are over 400 palm oil mills in the country. We need to create awareness among them to do their part for the environment although there is not as much money to be made from carrying
Quota uptake for renewable energy sources under FiT as at Dec 5th, 2011
42%
SOLAR 144.3 MW
35%
BIOMASS 118.6 MW
19%
SMALL HYDRO 65.86 MW
4%
BIOGAS 14.48 MW
out RE projects as in selling crude palm oil.”
Compliance failure Badriyah says SEDA Malaysia will release new RE quotas from unsuccessful submissions before year-end (2011). This is because, in their haste to secure quotas, some applicants may have failed to provide supporting documents. Some applicants hope to submit their documents after applying online, but this is not allowed. “Such applications will be immediately rejected for noncompliance with requirements and once the review process is over, failed quotas will be up for grabs. I really didn’t expect this to happen. After all the explanations and online tutorials, I expected people to comply fully. You are granted the FiT based on your compliance. So if you don’t comply at the point of submission, you don’t qualify. It is not fair to others who have complied fully.” She says, of the eight big players who got provisional approval for a 5 MW quota each, if two did not comply, 10 MW would go back to the system for new applications. She urges those who failed to secure quotas the
first round to check the SEDA Malaysia website regularly for information pertaining to reopening of the quota. Her officers are now sifting through the applications to verify those who are able to proceed with the signing of REPPAs with the relevant DL and registering the signed REPPAs with SEDA Malaysia.
On whether the DL has the right to refuse to buy RE-generated electricity “It has no right to refuse, unless the purchase will be detrimental to the safety of the grid. It is the responsibility of the DL to distribute the power it receives and to strengthen the connection points if need be,” says Badriyah. Cap and the fee One week to the launch of the FiT, SEDA Malaysia announced a cap of 5 MW on applications, which rattled quite a few big players who had been planning for solar farms of up to 30 MW and sent them back to the drawing board. How did the cap come about? Badriyah says this was a joint decision between SEDA Malaysia and the Ministry of Energy, Green Technology and Water as a big player could technically apply for up to 30 MW under the Act (applicable to all RE sources) and the annual allocation of 40 MW for solar would then easily be taken up by just two players. To benefit more companies, a 5 MW cap was imposed. This means the 40 MW annual quota for solar would be taken up by at least eight companies. She says although the law provides for a 30 MW project to be broken up in batches of 5 MW
Malaysian FiT allocated installed capacity for solar 2011/2012
2013
2014
Allocated MW installed capacity H1
H2
H1
H2
H1
H2
Residential (≤ 12 kW)
3.96
3.22
3.81
0.54
0.00
0.00
Non-individual (≤ 500 kW)
3.72
3.90
3.50
3.55
3.07
0.00
28.02
27.27
25.73
19.00
17.00
0.00
Non-individual (> 1 MW ≤ 5 MW)
Source: SEDA Malaysia website on December 22nd, 2011 •
•
power planning process. So if you don’t comply, we can revoke the FiT approval.”
Commitment and assurance Badriyah says before the FiT was launched, TNB (which will pay out the FiT first before claiming the sum from the RE Fund) was worried that there
each, the matter is being discussed at the ministry. Seen from another perspective, if one company does a 100 MW plant in 20 batches of 5 MW each, it “becomes” an independent power producer (IPP) benefiting from the FiT. “The law is open-ended, so we need policy directions and regulations to mitigate arising situations. SEDA Malaysia might in future allow bigger plants. For now, we want a level playing field for more players to come in.” There is also the environmental issue to consider for huge groundmounted solar PV farms. “We are keener on building-integrated photovoltaics (PV).” Another issue that caused a stir was the application fee of RM10 per kW for installation capacity above 72kW. For a 5 MW system, it would mean a RM50,000 upfront payment that some quarters felt is too high and could be an entry barrier for mediumsized players. Badriyah says the fee is reasonable as the returns from the FiT scheme would be quite lucrative for large projects. Although there are provisions under the RE Fund for administrative fees, she says the amount is minimal. SEDA Malaysia gets an administrative fee of 3% on whatever quota that is released. Another 2% goes to the DL. “The e-FiT system alone costs a whopping RM4.6 million (software and cost of managed hosting),” she says. The system, which was implemented through an open tender won by Novartis, is complex and allows for real-time monitoring and enforcement by SEDA Malaysia officers. This is crucial to ensure SEDA Malaysia is able to keep track of the power committed to the grid for the nation’s power management. She says capacity delivery failures could have adverse consequences on the energy supply and demand situation. A successful FiT applicant must upload information on the commercial operation date of its project so that its progress can be monitored. “We have an enforcement unit to check whether projects are being constructed according to timelines set. If you don’t keep to the timelines, it will create havoc to the
“If you don’t comply at the point of submission, you don’t qualify. It is not fair to others who have complied fully.” would be oversubscription, with the resultant inability to pay. She says every measure has been taken to ensure that there is no oversubscription of quotas that goes beyond the current standing of the RE Fund. That was the costly mistake made by some countries which took a free-for-all approach to allow the market to dictate demand and supply. While the government has approved a 1% hike in electricity tariff as a contribution from eligible consumers to the RE Fund, Badriyah says there is a need for a further 1% hike next year to meet future RE quotas. This is necessary to keep the nation on track to achieving 7% renewables in the energy mix by 2015, and 17% by 2020.
She says the first pay-out under the FiT scheme is expected to be by end of January 2012, the recipients likely being former SREP players who had connected to the grid years ago. “They are the lucky ones.” Badriyah’s challenge now is getting the additional 1% increase in tariff. It took one and half years to get the first 1%. She realises the current quota setting is only up to the first half of 2014. “We know this makes it difficult for the RE players to plan ahead. It can’t be helped as we don’t have a limitless RE Fund. For 2012, we have RM300 million. If there is extra, the quota can then be increased. “RE Fund balancing is a very important process to ensure there is no oversubscription. The quota is pegged to the RE Fund, to ensure there is money to pay the premium. This has to be done to pacify the DL. We have given our commitment to them that SEDA Malaysia will not give FiT approval if there is no money.”
On whether the FiT rates for solar have been too generous Some quarters have criticised SEDA Malaysia for being too generous, as solar modules prices have dropped significantly. Badriyah says the rates for solar are reasonable. “To set up a system, we are not talking of just the module cost, but also installation and financing costs. On top of that, the system is also capped at 5 MW, so there is not much economies of scale. Also, the solar modules produced in Malaysia are exported. The solar PV panels used locally are mostly imported from China. “The German experts we met recently also described our solar tariff as reasonable. It will stay until end2012 (after which it will be reduced, a process called degression). We have done our assessment.” On why the RE Act is not applicable in Sarawak “The state has its own electricity ordinance. If Sarawak wants to participate in the FiT, it has to create its own RE Fund, and its own SEDA. Having said that, there is a lot of oil palm waste in Sarawak that can be tapped. It is difficult to shift the POME but the EFB can be turned into briquettes.”
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opportunities
Malaysia a hotbed of opportunities for PV Investments in solar PV power projects for 2012 estimated at US$72 million Malaysia’s first grid-connected 5 MW solar farm to take off in January
The implementation of a (Pajam) and Cypark feed-in tariff (FiT) policy Suria (Negeri will boost Malaysia’s Sembilan) Sdn Bhd. solar PV market, but it This means the latter is clear the authorities got 3 MW. Cypark want to broaden the base has publicly spoken instead of letting a few big of plans to generate corporations gobble up the between 30 MW and limited quotas. 50 MW from solar, Green Purchasing Asia biogas and biomass on Ravi Krishnaswamy, vicewas told by industry circles its landfill sites, and president of energy & power that a few “big boys” had given the 5 MW cap systems at Frost & Sullivan Asia Pacific planned solar farms with on solar, it is unclear capacities of up to 30 MW how the company will to benefit from the lucrative proceed with their FiT rates for solar. However, original plans. their plans had to be Other developments: redrawn as the Sustainable • TNB Energy Energy Development Services Sdn Bhd Authority (SEDA) Malaysia (TNBES) is preparing capped applications at 5 to launch its first MW just before applications 5 MW grid-connected opened on December 1st. 12 ha solar PV farm Chock Eng Tah, managing As at December 22nd, in its 625 MW opendirector of Berjaya Solar the SEDA website had listed cycle power plant in five companies as having Putrajaya. The winner been granted FiT approval of the tender exercise for capacities of between is expected to be 1 MW and 5MW. They are: known by this month. • Gading Kenchana Sdn Some 20 companies Bhd (5MW) participated in the • Selasih Mentari Sdn Bhd tender, which closed (2 MW) mid-October. TNBES • Gubahan Ceria Sdn Bhd managing director (4.5 MW) Shahrir Abdul Latiff Shahrir Abdul Latiff, managing director of TNB • Cypark Suria (Pajam) says the company Energy Services Sdn Bhd Sdn Bhd (5 MW) has applied for a • Special Universal Sdn Bhd development order from Putrajaya (2.5 MW) Corporation. The solar farm is On December 14th, SEDA estimated to cost RM60 million to Malaysia announced further revised RM70 million. The winner of the caps for solar applications: a new limit tender will do the earthworks for the of 12 kW for individuals and for non12 ha, and on top of that, will also individuals, there are two limits – prepare the platform for the first 500 kW and 5 MW. 2 MW system, as well as supply the Cypark Resources Berhad has equipment for the powerhouse, which issued a statement saying it has FiT will use monocrystalline modules. approval for 8 MW for two of its The other two phases will use companies, namely Cypark Suria polycrystalline and thin-film.
• Berjaya Solar has started building a pilot solar PV plant on a one-hectare site on their landfill in Bukit Tagar, Selangor, that will produce 125 kW. The investment for this is about RM1.5 million. Managing director Chock Eng Tah says the pilot will test out the efficiencies and yield of four different types of solar cells – monocrystalline, polycrystalline, thin-film and flexible solar cells – for the best yield before they commit to a huge investment that reportedly could be a 50 MW solar plant. Chock says another company, KUB-Berjaya Enviro, which owns the landfill, has an ongoing biogas project on the site that produces 1.2 MW that is sold to national utility company TNB through a power purchase agreement under the Small Renewable Energy Programme (SREP). The company will apply for upgrading under the FiT. The next phase of development will see an additional 3–5 MW from the biogas plant. A 5 MW biogas plant requires an investment of about RM30 million, with a payback period of about five years.
Bukit Tagar pilot project facts Land size: One hectare Investment: About RM1.5 million System integrator: Phoenix Solar Solar cell sources: • Thin-film (copper indium gallium selenide or CIGS) cells are from Q-Cell • Mono and polycrystalline cells are from EQ Solar
Research house Frost & Sullivan Asia Pacific is upbeat on Malaysia, saying that it aims to become the second largest producer in solar manufacturing by 2020 and is emerging as the favoured country for new PV manufacturing units. Investments in solar PV power projects for 2012 is estimated at US$72 million, a 194% growth over 2011 and close to 12 MW of solar PV power is to be added in 2012, a massive year-onyear increase of 242.9%. Ravi Krishnaswamy, vicepresident of energy & power systems at Frost & Sullivan Asia Pacific, says banks are considering large-scale solar power projects as the next wave of investment options as they are better equipped to understand risks now. •
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opportunities
Singapore creates solar hub HDB launches S$31 million solar capability programme involving 30 precincts Invitation to bid for S$11 million floating PV project on Tenggal Reservoir
By David Lee
S$300m
S$195M
to spur development of the clean energy industry
n challenge
for national innovatio
S$80m
S$140m
for green
buildings
for water research
Although it lacks the land resource to tap solar energy in a significant way, Singapore is positioning itself to attract major solar players to use the island state as a springboard to Asia, especially Southeast Asia. In the last few months, this tiny nation has renewed its strong commitment to research and development in the energy sector as well as the broader clean technology arena. And that commitment is backed up by funding. Economic Development Board (EDB) cleantech director Goh Chee Kiong says in total, the government has announced about S$700 million (US$537 million) in funding for clean tech and the energy arena and “I believe more will come”. Of that amount, S$195 million was announced a few months ago to spur development of the clean energy industry. It was followed by S$140 million as a top-up to water research, S$80 million for green buildings and S$300 million for a national innovation •
The Government of Singapore announced about S$700 million (US$537 million) in funding for clean tech
Goh Chee Kiong of Singapore’s Economic Development Board (EDB): Local banks are being educated to familiarise them in solar project financing
challenge around clean energy, he says. The plan is to make Singapore a centre for manufacturing technology development as well as high-value manufacturing, and a hub for system integration and project development. To achieve this, it needs four “ingredients” – technology, markets (including Singapore as a living lab), capital (it is a leading financial hub in this region) and talent.
Technology Solar Energy Research Institute of Singapore (SERIS), which is a thought leader, provides consultancy services for high-end projects in the region. Markets Companies can develop, test and commercialise green solutions in real-life environments. In the last two years, there have been a range of pilot projects launched – smart grids, an intelligent energy system by the Energy Market Authority, Clean Tech Park (greenest park in this region), and the micro-grid on Pulau Ubin, a rustic island of 10.19 sq km. Some new solar projects that are coming on stream: • In Punggol Eco Town, a housing estate northeast of the island comprising some 250,000 residents, some rooftop solar projects have been done and a solar leasing scheme is being tested (see page 32) • The Housing Development Board (HDB) has launched a S$31 million solar capability programme. Thirty precincts will be installing and piloting solar systems throughout Singapore • The HDB will also be issuing a tender for a 1 MW copper indium gallium selenide (CIGS) pilot programme and one for solar leasing in the coming months • An invitation for bids to do a floating PV project on Tenggal Reservoir in the western part of Singapore. The first of its kind in the region, the S$11 million project will demonstrate potential benefits from the cooling effect of solar on the water body, evaporation reduction and reduced algae growth. Capital Goh sees capital as critical to solar. He named Deutsche Bank and Standard Chartered as among those driving renewable energy. “We are educating local banks to familiarise themselves in solar project financing.” Talent Singapore is going into talent development. “We are making efforts to groom local talent; scholarships have been given to 30 to 40 scholars in clean tech in the last few years.”
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opportunities
Recognition for pioneers Five private sector projects awarded at third Solar Pioneer Award Projects recognised for innovative solar installations
Keppel DHCS’ district cooling systems (DCS) plant Keppel DHCS, a wholly-owned subsidiary of Keppel Integrated Engineering Limited, is the first and currently the largest DCS developer and service provider in Singapore. DCS serves centrally chilled water to a cluster of buildings for their air-conditioning needs. Keppel DHCS operates three DCS plants with a combined plant capacity exceeding 50,000 refrigeration tonnes (RT) at Biopolis@one-north, Changi Business Park and Woodlands Wafer Fab Park. The company also provides district heating and cooling systems services in the Eco-Business Park of the Sino-Singapore Tianjin Eco-City (SSTEC) in China. To meet the growing need for energy-efficient cooling systems, Keppel DHCS expanded its DCS plant at Changi Business Park by 4,500 RT to 17,500 RT, which includes solar panel installations of about 550 kWp on the rooftop and building facade. The proposed solar system will comprise three types of modules: polycrystalline silicon, amorphous silicon and copper indium gallium selenide (CIGS). The installation will also serve
Keppel DHCS’ district cooling systems plant boasts the largest photovoltaic cell installation on a building in Singapore
as a commercial test-bed for the integration of green building technologies. The system is supported by EIPO’s Solar Capability Scheme, and is projected to be built at a cost of S$3 million. The solar panels, spread out over 5,000 sq m, are expected to generate an average output of 50,000 kWh per month, equivalent to the electricity consumption of 125 units of four-room government flats. The plant will feature the largest photovoltaic (PV) cell installation on a building in Singapore when completed in the second half of 2012.
Hyflux Innovation Centre The new Hyflux Innovation Centre will house the Hyflux Group’s global headquarters as well as its design, research
GlaxoSmithKline (GSK) Biologicals plant Officially opened in June 2009, the GSK Biologicals plant in Singapore is the first purpose-built plant for primary vaccine manufacturing outside of Belgium. The S$600 million plant is also the company’s largest vaccine facility investment in Asia. The plant features a PV system consisting of 432 polycrystalline solar panels that has an output of 101 kWp. Installed on the rooftop of the Green Mark-certified warehouse building, the system has a yield of around 126,000 kWh per year and is estimated to offset 67 tonnes of carbon dioxide. OUB Centre Limited’s One Raffles Place Tower 2 Formerly known as OUB Tower 2, OUB Centre Ltd’s new 38-storey commercial tower will form part of One Raffles Place that will offer nearly 80,000 sq m of Prime A office, retail and entertainment space. The smaller 205 m Green Mark-certified tower, designed by Japanese architect Paul Tange, complements the original 280 m OUB Tower designed by his father Kenzo Tange, which was
At the third Solar Pioneer Awards ceremony in Singapore in November, five private sector projects were recognised for pioneering solar installations that are innovative in terms of system design, size and installation techniques, and solar system integration capabilities. The award was organised by the Energy Innovation Programme Office (EIPO), Singapore’s key inter-agency workgroup responsible for planning and executing strategies to develop the energy sector on the island state, and co-led by the Singapore Economic Development Board (EDB) and the Energy Market Authority (EMA). The awardees are:
By Suvarna Beesetti
and development and commercialisation centre. The 10-storey centre will be developed on a 1.7 ha site in Bendemeer, Singapore. Japan’s Mizuho Corporate Bank is reportedly providing US$26 million to partially finance the construction cost for the Hyflux Innovation Centre, which will feature a 72 kWp solar panel system on the rooftop to light up the common areas.
Five private sector projects were recognised at the Singapore Solar Pioneer Awards •
the tallest building outside of the US when it was completed in 1988. One Raffles Place Tower 2 will entail an investment of US$540 million, excluding land costs, and is scheduled to be completed next year. It has environmental management features such as double-glazed low-emission glass and sun-shading fins, an energysaving building management system, water efficiency fittings and a rainwater harvesting system. The building also capitalises on the sloping roof with a 65 kWp PV system that occupies both its lower and upper roofs, with a total PV area of 1,132 sq m, using high performance PV modules with customised frame and module-mounted power optimiser produced by homegrown company PV World.
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UOL Group’s Upper Pickering hotel & office development UOL Group’s business hotel cum office development is being developed by
Developer: OUB Centre Limited Architect: SAA Architects Pte Ltd Structural engineer: TEP Consultants Pte Ltd M & E engineer: Beca Carter Hollings & Ferner (S.E.Asia) Pte Ltd Landscape consultant: Belt Collins International (Singapore) Pte Ltd Quality surveyor: KPK Quantity Surveyors (S) Pte Ltd Main contractor: Sato Kogyo Hitachi Plant Joint Venture Design architect: Tange Associates Asia Pte Ltd ESD consultant: Kaer Pte Ltd
OUB Centre Limited’s One Raffles Place Tower 2’s 65 kWp PV system takes up an area of 1,132 sq m
case studies
Leasing the sun’s energy Sunseap runs pioneer PV leasing scheme at Punggol eco-town Scheme made possible through HDB grant of S$1.65 per watt
By David Lee
Land-scarce Singapore has in recent years experimented using the rooftops of its Housing Development Board (HDB) flats, where eight out of ten of its citizens live, as a network of solar farms. It has now pioneered a solar leasing scheme involving the rooftops of about 40 blocks in Punggol, the island nation’s first eco-town. This leasing scheme will allow the industry to develop innovative project financing, given that the government is unlikely to implement a feed-in tariff mechanism for PV system owners. The company that got the job is the Sunseap Group, which has been given a HDB grant to develop a 2 MW system that will pave the way for more •
subsidiary Pan Pacific Hotels Group Ltd at Upper Pickering Street. The 363room Parkroyal on Pickering features a hotel-in-a-garden concept and its sustainable features have achieved a Green Mark Platinum score. The development is designed by award-winning design firm WOHA and is one of the first in Singapore’s hospitality sector to feature a solar energy system. The solar PV system consists of 262 pieces of Schott polycrystalline solar PV modules installed over the trellis and flat concrete roof of the three towers. The total capacity of 60 kWp will generate about 67,000 kWh of energy per year and is calculated to be sufficient for all sky garden lights. The development, due to complete in mid-2012, comes with other sustainable elements such as an energy-efficient air-conditioning system, highperformance laminated double-glazed low-E glass, LED lighting, rainwater harvesting and the use of extensive skyrise greenery.
such schemes. At time of writing, the installation has yet to start. Company director Lawrence Wu says the scheme, which is the first of its kind in the region, is part financed by the HDB through a grant of S$1.65 (US$1.26) per watt, and the rest through a leasing model valid for about 20 years. The company leases the solar system based on the amount of power produced and sells it according to a standard tariff “plus a small discount”. “From the town council’s perspective, they are just using power as they would ordinarily be required to and paying no more than what they were being charged in the past based on the
utility company Singapore Power’s tariff rate. On top of that, they do not have to maintain the solar system and replace parts,” says Wu. The system is performance-based. If it does not produce the yield as expected, the company will lose money. It has to be efficient to recover its capital and profit from it. Wu touched on various aspects of the model.
Who’s the client and what’s the power for? The town council. It buys power produced by our solar system for common services like corridor lighting, lift operation and water pumps. We do not serve household electricity demand. Grid connected? Yes, it is. However, most of the solar power generated will be used. The only time the town council needs to tap from the grid will be at night. We don’t store energy. Storage batteries last five to seven years and they are expensive to replace.
Sunseap essentially leases the solar system based on the amount of power produced and sells it according to a standard tariff “plus a small discount”.
Challenges in such a scheme From the operational perspective, the cost for high-rises is higher because we have to hoist the system up many different blocks. The system integration is more tricky. From the financing aspect, it is how to educate banks to fund something like this. The last is staffing to maintain the system over 20 years.
Sunseap’s Lawrence Wu: Capex can be recouped in eight to 12 years
Total cost of the system Exceeding S$11 million, part of it offset by the HDB grant. How the company makes money The system’s capex can be recouped in 8 to 12 years. This does not include cost of replacement and monitoring which is quite low as there are no moving parts. The rest of the leasing period yields the profit. How financiers react to the scheme Different banks have different risk appetites. Their concerns include credit terms, the systems cost and whether it can produce the designed power yield. They want assurance on return on investment, as that will have
an effect on the repayment of loans. We have worked with international and local banks for more than two years, with some agreeing to fund part of the system cost. The balance is from our internal funds.
Others interested in this scheme We have a couple of industrial and commercial clients that follow the same business model. One commercial project expected to be completed by November 2011 is about 300 kW. There are a few commercial projects under discussion which, if aggregated, will potentially yield about 5 MW. Looking beyond Singapore We are looking at regional markets. However, the tricky part is the regulatory side. Can you sell power directly to end users? Power in Singapore is not heavily subsidised but in some countries, it is. We are talking to some developers in Tianjin Eco-City in China, especially Sino-Singapore Tianjin Eco-City (SSTEC)-led projects. We have also met with Sunway Group. We have had discussions with Singapore’s Economic Development Board (EDB) many times on this. In one of the projects there, the end user is now comparing various proposals. Ours is the only leasing model. Is Sunseap Leasing backed by a larger group? Sunseap Leasing is an affiliate of Sunseap Enterprises which manufactures solar panels (both poly- and monocrystalline) in Singapore. The manufacturing arm is also an affiliate partner of Sunset Energietechnik GmbH of Germany.
Re-balancing of the industry in the works After a large scale supply-demand imbalance, the solar PV industry now appears to be in the process of rebalancing itself. A number of factors are falling into place to allow for this: • The effect of the reductions in the various European feed-in tariffs (FiT) is largely priced in. In terms of the most recent adjustment, which has been in the UK’s FiT programme, there is reason to believe that demand will nevertheless hold up quite well. • The US pipeline remains large. However, financing remains a question mark and we face the issue of the expiry of the Section 1603 Treasury Grant Programme at year end at a time when the politics surrounding the issue make the question of rolling over the programme almost impossible.
“In the long-term, as the market balances, the main ADMDƥBH@QHDR EQNL ATNX@MS "GHMDRD CDL@MC ENQ RNK@Q VHKK AD SGD UDQX LTBG TMCDQU@KTDC "GHMDRD RNK@Q OK@XDQR Ś • There is increasing evidence that Asia and particularly China will take up a good part of any slack going forward. • Finally, the main Chinese players have announced plans to halt new capacity build out, at least until the end of 2012. These factors should allow supply and demand to re-balance itself over the course of 2012, creating a much healthier situation in the industry. The question is how forward-looking the market is prepared to be at a time when earnings in the solar sector still look negative, reflective of the current state of oversupply. (Source: NPD SolarBuzz: Asia Pacific Major PV Markets Quarterly)
•
case studies
Ahmedabad, the Manchester of the East, is poised to set the scene of low-carbon power
Low-carbon Ahmedabad: Utopian dream? Carbon capture and sequestration the proposed route to a low-carbon society Financing to be the acid test for ambitious GHG emissions reduction plan
By Stephen Ng
From the days of British rule, the city of Ahmedabad has maintained its reputation as a vibrant industrial and cultural hub dubbed the Manchester of the East. In 2010, Forbes magazine rated it as India’s fastest growing city and, according to the Times of India, Ahmedabad city is expected to balloon to over four times its present size by 2050, covering some 900 sq km and accommodating a population of 12 million as the per capita income multiplies itself by 12. By 2035, however, the city – already India’s seventh largest urban agglomeration and an important centre
of trade and commerce in western India – is projected to see its annual greenhouse gas (GHG) emissions increase by sixfold, from the 2005 level of about 10.17 million tonnes of carbon dioxide (CO²) to 61.1 million tonnes of CO². Ideally, these levels should be 1.82 tonnes of CO² per capita in 2035 instead of the 5.7 tonnes projected under the “business as usual” (BAU) scenario. Research led by Professor P R Shukla of the Indian Institute of Management Ahmedabad (IIM-A) shows the following projected increases in
carbon emissions by 2035 (against 2005 levels): • Passenger transport – increase by 14.68 times • Commercial – increase by 10.40 times • Freight transport – increase by 7.74 times • Industrial – increase by approximately 6.56 times • Residential – increase by 1.49 times The researchers have set an ambitious target – a 67% cut on the 2035 BAU level, which means halving GHG emissions from 40.7 million tonnes of CO² to 20.4 million tonnes in a low-carbon society (LCS) scenario. A number of GHG emission reduction points have been identified (see Table 1). An interesting conclusion from the study is that, in the case of Ahmedabad, decarbonisation or switching to low-carbon power has higher mitigation potential compared to improvements in energy efficiency due to its high energy demand, especially in its textile industry.
Table 1: Recommended points for GHG emission reductions in Ahmedabad Actions Reduce energy demand, primarily in the industrial sector
Reduction by million tonnes CO2 15.4
Switch to low-carbon power (coal + carbon capture and storage [CCS])
8.6
Fuel switching to gas in both transport and industrial sectors
6.3
Improvement in energy efficiency of buildings
2.4
Improvement in energy efficiency of industry
4.3
Improvement in energy efficiency of transport
3.7
TOTAL ACHIEVABLE
•
40.7
Final energy Final energy is the form of energy available to the user after conversion from primary energy carriers such as crude oil, natural gas, nuclear energy, coal and regenerative energies. Final forms of energy include petrol or diesel, purified coal, purified natural gas, electricity, mechanical energy, etc. When going from primary energy to final energy, the efficiency of the conversion device, such as a power plant and, where applicable, transportation, must be taken into account. Countries typically have higher primary energy consumption than final energy consumption due to losses in the energy system.
Fig 1: Final energy demand by sector 20
Fig 2: Energy demand by primary energy 35
Residential Industry Freight transport Commercial Passenger transport
18 16 14 10 8 6
Biomass Solar Nuclear Hydro H2 Gas Oil Coal
30 25 mtoe
12 mtoe
Roadmap to a smaller carbon footprint The city’s final energy demand is projected to hit 18 million tonnes of oil equivalent (mtoe) in the 2035 BAU scenario, or tenfold the 1.8 mtoe recorded in 2005. An overwhelming 70.4% (12.832 mtoe) of this would come from the expanding industrial sector. The rest is contributed by other sectors – residential, commercial and both freight and public transportation (see Figure 1). This scenario also anticipates over 3.5 mtoe of coal and oil in the city’s final energy demand for 2035. In the low-carbon society scenario, however, coal use would be eliminated and oil and gas consumption substantially reduced, while contributions from nuclear, solar and biomass see moderate growth (see Figure 2). Carbon capture and sequestration (CCS) technology – a geo-engineering technique used to scrub CO² from ambient air – has been identified by Shukla’s team as the way ahead to help reduce CO² emissions from these power plants as they do not expect the
20 15 10
4
5
2
0
0 2005
2035 BAU 2035 LCS
2005
2035 BAU 2035 LCS
Source: IIM-A
renewable energy sector to overtake the existing power generation that uses coal. The team’s paper lists eight measures to cut carbon emissions and turn Ahmedabad into a low-carbon city by 2035. They are: • Sustainable transportation system • Improvement in energy efficiency • Producing low-carbon power • Improving material efficiency • Environmental infrastructure
• Land use planning • Governance • Financing Ultimately, financing will be the acid test for Shukla’s vision of Ahmedabad’s low-carbon alternate future. Will this blueprint be able to convince banks and other financial institutions to step up and fund the necessary low-carbon infrastructure? This is the question that everyone wants answered.
•
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SNEI
case studies
Artist impression of New One-North Park
Intelligent eco-township on Nanjing island Sino-Singapore Nanjing Eco Hi-tech Island to be driven by science and technology Major mixed development called New One-North Park will kick off in 2012
By David Lee
The Singapore and Chinese governments have again joined forces, this time to develop the 15.21 sq km Jiangxinzhou, an island located in downtown Nanjing, into a world-class eco hi-tech new township called the Sino-Singapore Nanjing Eco Hi-tech Island (SNEI). Details were revealed at the Nanjing Investment Seminar held in Singapore recently. The SNEI is one of Nanjing’s largest foreign collaborations, and will be developed over more than ten years, with a total investment estimated at 100 billion yuan (US$15.7 billion). The island is located 6.5 km from the city centre of Nanjing, the second largest commercial centre in East China after Shanghai. The SNEI was initiated by Singapore’s Ministry of Trade and Industry (MTI), International Enterprise (IE) •
The Sino-Singapore Nanjing Eco Hi-tech Island (SNEI) is one of Nanjing’s largest foreign collaborations, and will be developed over more than ten years, with a total investment estimated at 100 billion yuan (US$15.7 billion) Singapore, CPC Jiangsu Committee, the Provincial Government of Jiangsu, CPC Nanjing Committee, and the Municipal Government of Nanjing. It is co-developed by a 50-50 Singapore-China consortium called Sino Singapore Eco Hi-Tech Island
Development Co Ltd (SNECO). Sembcorp Industrial Park Ltd and Yanlord Land Pte Ltd make up the Singapore consortium while the Chinese partners are State Assets Operation (Holding) Co Ltd of Jianye District and Development and Construction Department of Hexi New Town of Nanjing. A SNECO spokesperson said the total registered capital of the joint venture (JV) company is US$300 million and, to date, the paid-up capital is US$184 million. Although the island has a land area of 15.21 sq km, less than half or 7.15 sq km will be developed while the rest will be preserved for ecotourism. The ecology planning system includes the use of renewable energy such as wind and solar power, non-traditional water sources, waste recycling and processing, green transportation through the use of trams and electric buses, green architecture, and landscape ecology. By 2020, up to 10% of the island’s residential and up to 15% of the public area’s energy needs will be generated by renewable sources. The project broke ground in May 2009 and has seen good progress. Construction of resettlement housing has started and is targeted for handover to the local government by April 2013. Preparatory work for the commencement of construction work on the island is well underway. The developers will soon begin construction on a 13.4 hectare major mixed development called New OneNorth Park, which encompasses an R&D Park, an integrated exhibition centre as well as a New River Island, and a waterfront commercial-leisureresidential precinct overlooking Hexi New City on the mainland. The master plan for this development is designed by US-based NBBJ, the same architectural firm that co-designed The Sail @ Marina Bay in Singapore. NBBJ’s conceptual designs include green roofs to alleviate the urban heat island effect, facade shading and building orientation for the R&D Park, rain collection canopies, wetland bio-filters and park connectors. The 14-hectare land parcel has a prime location next to the vehicular bridge linking SNEI to Nanjing mainland and to the planned Jiangxinzhou subway station, an
SNEI
Some of the 30 Singapore companies that signed letters of intent to invest in SNEI during the Nanjing Investment Seminar held in Singapore in October
extension of the city’s subway system which intersects with the NanjingShanghai high-speed line. IE Singapore works closely with the JV company to facilitate Singapore companies’ entry to the project to invest and/or offer products and services for Jiangxinzhou’s development. Over 60 strategic partnership agreements and memorandums of understanding
(MoUs) have been signed with the JV company. Of this number, 42 are Singapore companies which have pledged a total investment of US$120 million in the areas of new energy resources, integrated city management (ICM), environmental protection, eco agricultural technology and international schools and training centre projects.
At the Nanjing Investment Seminar in Singapore, Singapore Minister of State for Trade and Industry Teo Ser Luck and Nanjing Mayor Ji Jianye witnessed a ceremony where 30 companies signed letters of intent to take up land or commercial space or to provide software and technology urban solutions in the SNEI.
Project details • Total construction land area: 675 ha • Gross building area: 6.5 million sq m • Development duration: More than ten years • Ground preparation underway Location The project is located on Jiangxinzhou (JXZ), a 15 sq km island in the middle of the Yangtze River. To the island’s north is Nanjing’s Jianbei Pukou district, which is a less developed part of Nanjing. And to its south is Jiangnan Hexi New Area, which is Nanjing’s new central business district. As Nanjing looks to promote the development of Jiangbei more aggressively, JXZ will function as an important node connecting Jiangbei and Jiangnan. Highlights of SNEI industry positioning study • A “3 +1” industry system
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characterised by high-end science and technology, namely, ICT-related services, environmental protectionrelated services, urban services and eco agricultural technology The island will be transformed into a functional hub for research and development, intelligent and innovative industries and multinational headquarters Talents will be fused with international capital investment to generate high-end projects Advanced standards will be applied in the long-term development work Singapore’s expertise in urban planning, environment protection and industrial park development will be adopted A showcase of sustainable development, ecological civilisation and social harmony, boosting Nanjing’s economic development and its growth into an Intelligent City.
SNEI
Fact sheet on Sino-Singapore Nanjing Eco Hi-tech Island (SNEI)
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case studies
WATER revives a dead river Sungai Way rehabilitation involves creating a river within a river Success depended on engaging stakeholders from the start
By Stephen Ng
For Dr K Kalithasan of the Global Environment Centre in Malaysia, river rehabilitation works best when you go back to the basics of engaging the community and employ methods that are practical, sustainable and duplicable. After three years of working to rehabilitate Sungai Way, one of Malaysia’s most polluted rivers, his team showed that simple technology is sufficient to help bring life back to a river. “What is important is our model remains low-cost,” he explains. “The model has to benefit the local communities socially, environmentally and economically.” The 12-km tributary of the betterknown Sungai Penchala runs through residential, commercial and industrial areas in the city of Petaling Jaya in Malaysia. The project, sponsored by GAB Foundation, a non-profit organisation in Malaysia, cost some US$250,000, but the good news is the once “dead” river is now alive.
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Squatters part of problem Due to rapid development in the area, Sungai Way was concrete-channelised, leaving it looking more like a drain during the dry season. The river is a good flood mitigator during the monsoon season, but most of the time, the bulk of its water comes from the surrounding developments. Before the rehabilitation, one could hardly find living organisms in the river except for bloodworms. Being fully concrete, there was no natural riverbank for aquatic plants to grow. There were also few rocks and boulders in the river to serve as refuge for fish and invertebrates. Part of the problem was that squatters were dumping waste into the river. Water quality index tests carried out on three sampling stations in May 2009 put it under Class V, which indicates a heavily polluted river under
the National Classification Standards. According to Kalithasan, who was the consultant and coordinator for the project, the further downstream the river, the worse was its water quality. “This is due to the accumulation of wastewater and all sorts of solid waste discharged into the river,” he says. “Even today, the water quality in Sungai Way is highly influenced by industrial, residential and commercial effluents.”
Photograph showing residents building the wetland islands
River ownership In 2007, GAB Foundation adopted the WATER project – an acronym for “Working Actively Through Education and Rehabilitation”. Management committee member, Kelly Ch’ng, says the WATER project was aimed at improving the water quality of Sungai Way from Class IV–V to the III–IV range. “We have made it a point to inculcate river ownership among the communities to help reduce the pollution,” she says. “People forget that rivers are ‘living entities’ and home to many freshwater species. Hence, on May 23rd, 2009, we organised a river carnival for one of the residential areas, where some 500 people attended to celebrate and appreciate the river that gives life to this area.” At the carnival, there was emphasis on the Zero Waste Concept, teaching the residents how to minimise waste production, and maximise reusing and recycling waste effectively. Kalithasan says the first step undertaken was to organise the working committee involving, among others, the Department of Irrigation & Drainage, Department of Environment, Petaling Jaya City Council, Selangor Water Management Authority and the Fisheries Department, as well as service providers such as solid waste management company Alam Flora and national sewerage company IWK and representatives of various residents’ associations. “It was important to engage with the stakeholders and project partners right from the beginning,” says Kalithasan. “Thereafter, we moved on to draft the action plans for the entire project.” The Global Environment Centre (GEC) helped the working committee draft out the action plans, focusing on four areas – reducing pollution at source, enhancing water quality, improving biodiversity and spearheading community initiatives. Rubbish traps were set up along the river, and water quality was treated with the use of environmentallyfriendly materials such as mud balls and effective microbes. This is the first river rehabilitation project in Malaysia that uses wetland islands. Kalithasan says: “Because
the entire river is nothing but a concretised channel, our concept was to create a river within a river. This took at least three months to complete. It led us to step three of our project, which included creating seven wetland islands within the river, which helped to create ripples and pools. On the islands were planted wetland species capable of treating the water, such as Typha (cattail) and Cyperus Involucratus. This formed part of the ecosystem, which is capable of improving the quality of water. Before long, insects such as the dragonfly started to come back, fish now swim here and birds are being spotted. The river has indeed come back to life.” Above all, he says, river rehabilitation must involve the stakeholders and the communities through which the river flows. “Education is pivotal,” says Kalithasan. Companies running businesses along the Sungai Way basin were given a better understanding
Dr K Kalithasan explaining how the WATER project has been successful in the past three years
Azli Abu Bakar, senior programme officer of the Global Environment Centre
of the river rehabilitation project at a seminar presented by GAB Foundation and GEC. The project encouraged the local communities to practise the 3Rs – reduce, recycle and reuse. “Most of the people living here are aware now about the river rehabilitation work, and they
are starting their own initiatives,” says Ch’ng. Some residents have turned used cooking oil collected from households into candles and soaps. “They make good door gifts that help them earn some additional income.” The residents also make decorative items from shells and old newspapers.
INTERNATIONAL CONSTRUCTION WEEK (ICW) 2012
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Kolkata focuses on LED street lighting for energy savings Satisfied with the success of a pioneering pilot project that it co-led with international NGO The Climate Group and HSBC a year ago, Kolkata Municipal Corporation (KMC) has decided to further develop its LEDlighting project in India’s third most populous metropolitan area. This comes after a one-year monitoring period that commenced in December 2010 following the deployment of the first tranche of Philips Lumec RoadStar LED streetlights on selected traffic arteries in Kolkata.
US$73.3mil
India’s LED lighting market in 2010
Growth is expected to continue at a CAGR 45.53% till 2015
Key growth factors: Short-term drivers: Street light applications and the railway sector (over 60% of total demand in 2012 will be attributed to these two applications) Long-term issues: Energy deficiency, electrification of remote rural regions, and energy sustainability Source: Frost & Sullivan Research
Commenting on this decision to expand LED streetlighting in his city, municipal commissioner Arnab Roy told the Times of India: “Initially, we decided to install 15,000 LED lights. It will cost us Rs 500 million. Since we wanted to install environment-friendly lights, we opted for LED.” Roy said Kolkata has 180,000 streetlights, so the potential to scale up in this area of energy efficiency is significant. A senior KMC official told the Indian daily that while LED streetlights are almost five times costlier than existing ones, they will bring energy savings of at least 40%. The LEDs also have a longer lifespan of about 70,000 hours. The Asian Development Bank (ADB) has agreed to fund part of this LED project, which is part of the Kolkata Environment Improvement Project (KEIP). Work is expected to complete by July. KMC employees will require training to manage the new technology.
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Railway giant lights way for energy conservation Energy-saving lights for employees to reduce 100,000 tonnes CO per year Switch to LED alone expected to yield 80% savings in lighting costs
By Nishtha Arora In 2011, Indian Railways carried out a programme to provide 1.4 million compact fluorescent lamps (CFL) to its employees living in railway housing colonies, collecting in exchange their existing energy-intensive incandescent light bulbs. Through this initiative, the state-run transporter aims to play its part to slow down global warming while reducing its energy bill. The project covers almost all 16 zones of Indian Railways and is expected to reduce 100,000 tonnes of carbon dioxide (CO²) emissions annually. Rajeev Bakshi, director of CQC Green Ventures Private Limited, the company undertaking this project with Indian Railways, told the Times of India in March last year: “Since one incandescent lamp (ICL) or ordinary bulb consumes four times more energy than one CFL, we decided to replace ICLs with CFLs across the nation to save energy and generate CERs (certified emission reduction points) from the United Nations’ appointed designated operating entity.” Not content merely to provide the most fuel-efficient mode of long-distance transport in the country, Indian Railways has been taking various other steps to adopt environmentally-friendly technologies in its manufacturing, maintenance and operational activities. In her 2011 railway budget speech, then Railway Minister Mamata Banerjee declared 2011–12 the “Year of Green Energy”, while the Indian Railways’ “Vision 2020” document states its intention to conserve energy by sourcing “at least 10% of energy through new and renewable sources” and “achieving 15% enhanced energy efficiency”. Transporting more than 16 million passengers and a million tonnes of freight each day, Indian Railways is one of the largest and busiest rail
case studies
LED-based signage being used at Gorakhpur Railway station
“All A/A-1 class of stations will have LED signage with the aim of reducing energy costs by 80%.” networks in the world, with tracks totaling over 63,000 km. Its power consumption is almost 2% of India’s total electricity consumption. Studies project an annual 7% growth in power consumption for the railway sector. The United Nations Development Programme (UNDP) project, “Improving Energy Efficiency in Indian Railways”, estimates that by 2020, Indian Railways will have a projected energy demand of 37,500 million kWh as stated by the former electrical director R K Jain. “To address the energy conservation measures on traction and rolling stock, there has been deployment of three-phase regenerative braking technology in electric locomotives and electrical multiple units (EMUs) to reduce specific energy consumption,” he says, adding: “There are energy savings of about 30% in EMUs in suburban Mumbai and 10% in three-phase electric locomotives.” The state-run transporter is also trying to harness wind energy and has commissioned a 10.5 MW capacity windmill for the integral coach factory
(ICF) in Chennai. This project, which is partly financed by carbon credits earned via the Clean Development Mechanism (CDM) framework, aims to reduce 25,000 tonnes of CO² emissions annually. In the pipeline are similar projects in various other states. Along with its commitment to use only electrical equipment accredited with three stars and above by the Bureau of Energy Efficiency (BEE), Indian Railways is also banking on light-emitting diode (LED) lights to
case studies
help it achieve its energy conservation objectives. “Since LED lighting is energyefficient and has a longer lifespan, all A/A-1 class of stations will have LED signage with the aim of reducing energy costs by 80%,” says Jain. Display systems in 200 stations are also due to be retrofitted with LED, while solar-powered LED street lights will be installed in railway colonies and training institutions. Energy management systems will be implemented at stations and there are
plans to improve lighting at platforms and concourse areas with energyefficient fittings. Indian Railways’ road map towards greater energy conservation also involves establishing a “centre of energy” for the development of new energy-efficient technologies and the training of railway staff. If successful, these plans would reduce dependence on electricity and diesel while encouraging other organisations in the country to focus on energy and resource conservation. – Canary Trap
Sembcorp manages total water cycle at Suzhou port Newly-launched project provides water and wastewater management solution Showcase for best practices in integrated industrial water management
significant advancement for the water management industry in China. The governments of Singapore and China have used the Zhangjiagang facilities as a government-to-government showcase of bilateral cooperation in water management, winning them awards at both the East Asian and Global International Water Association
SEMBCORP
With the mid-December launch of Sembcorp’s first industrial water reclamation plant in Jiangsu Province, Suzhou, China, the Singapore-based company now manages the entire water cycle of the Zhangjiagang Free Trade Port Zone, providing total water and wastewater management solutions. The plant is capable of producing 20,000 cu m per day of industrial water and up to 4,000 cu m per day of demineralised water for the zone. This 106 million yuan (US$16.4 million) facility takes Sembcorp’s total investment in the free trade port zone to some 320 million yuan. It produces industrial water using treated effluent from Sembcorp’s centralised industrial wastewater treatment plant at the zone, thereby promoting environmental conservation. Sembcorp’s total water solutions help customers comply with discharge regulations and limit environmental impact, as well as promote the reuse of water, closing the “water loop”. This total water management model reduces liquid discharge and conserves water resources, representing a
Project Innovation Awards in 2010. Sembcorp Group president and chief executive officer Tang Kin Fei says: “We are encouraged by the confidence and trust the Zhangjiagang government has in us. We look forward to their continued support, especially in encouraging and promoting the use of reclaimed water in the Zhangjiagang Free Trade Port Zone.” Zhangjiagang is an hour and a half’s drive from Shanghai. Sembcorp has water and wastewater treatment operations in 12 cities across nine provinces in China with solutions that include wastewater treatment for both industrial and municipal clients, water reclamation, desalination and water supply.
Tang Kin Fei, Sembcorp’s Group president & CEO (fifth from right), and Alan Yau, CEO of Sembcorp’s China operations (first from right), with delegates from Singapore PUB and IE Singapore and officials from the Chinese government at the opening ceremony of the Sembcorp Water Reclamation Plant •
people
Angling for opportunities around the world Dr Cheong Hoe Wai, 55, has come a long way from his humble roots in Pudu, Kuala Lumpur. Today he is managing director for the Asia and Middle East, India, Europe and Africa (MEIEA) markets for Black & Veatch’s global energy business, and sits on the group’s executive committee. In this interview with David Lee, he shares a little about himself and his thoughts about the energy business.
What are your biggest challenges covering such a huge area and what tools do you use to get the job done? I’ve actually just stepped off the plane in Singapore from Dubai and am heading back to Beijing on a midnight flight. This is a typical travel itinerary for me. In today’s wifi-enabled environ •
Cheong Hoe Wai • Married. Has two adult children living and working in Melbourne • Dad was an orphan who went out to work at age 13, and eventually sent four children to university • Studied at St John’s Institution in KL • Keen angler, loves travelling to exotic fishing locations. Only practises catch-andrelease • Loves golf but no longer has time to play the game well enough to enjoy it • Life-long ambition is to develop/train/mentor younger chemical engineers.
Tell us how a Malaysian ended up in Black & Veatch’s executive committee. After my early schooling in Kuala Lumpur (KL), I went to university in the UK and got a first class BSc and PhD in chemical engineering. I came back to KL and started my career in the oil & gas industry. An opportunity to gain experience in the pharmaceutical business came up and I moved to Singapore. After a while, I returned to KL and entered the engineering and construction business, which I continue to enjoy today. I focused on projects in the oil & gas, petrochemical and pharmaceutical sectors, where my role saw me living and working in markets around Asia, such as Singapore and Shanghai. I joined Black & Veatch in 2007 as the Asia managing director for our global energy business, responsible for profit and loss for all energy projects in the region. In 2010, the Middle East, India, Europe and Africa portfolio was added. Then in May 2011, I was appointed to the executive committee where we are focusing our efforts to diversify and expand our global footprint. I reside in Beijing now but the reality is I travel throughout the world, wherever our clients need me. What I like about Black & Veatch is that it recognises how vital local knowledge is for doing business in different markets. Irrespective of nationality, they assign the right person and the right team to perform the job. Cultural diversity is embraced as a valuable asset.
ment, distance is less of an obstacle than it used to be. Armed with laptops, tablets and smart phones, one can just about work from anywhere. My challenges are not that different from other global business travellers operating across many time zones. My colleagues are located all over the world, some with as much as a 12-hour time difference. My tools include two mobile phones, an iPad, laptop, mobile router, headset and multiple power adaptors. As well as electronics, I carry an invaluable pouch holding multiple currencies, frequent flyer cards and mobile phone SIM cards from many countries. I travel very light, bringing only a carry-on case wherever I go,
even for an extended stay. So no check-in baggage. How did you do this year in terms of company performance? And how do you view the market next year? Black & Veatch has had a record breaking year in Asia in 2011. Financially, we have exceeded our budgets and won many vital energy and water projects that will help improve the lives of people in China, Indonesia, Thailand, Malaysia, Vietnam, Philippines, Singapore and Hong Kong. Next year’s market remains very strong for us, almost as good as this year. Power and water demand continues to grow in Southeast Asia, outstripping supply in most countries. Capital
growth in Asia over the next few years (India and Southeast Asia), but will still only contribute a small percentage of the overall energy mix in most countries. Increasingly, the world’s solar PV panels are now manufactured out of China and unit cost has come down significantly. Most of our solar PV projects are in North America and that will continue to be the case for the next few years. Tanker trucks line up to receive LNG (liquefied natural gas) from the Erdos, Inner Mongolia facility for transport to local distribution points. Black & Veatch and Chemtex helped design and build the LNG plant to produce 200,000 tonnes of LNG per year for a variety of fuel uses
projects are still being planned by private developers and governments. The Asia region will continue to make significant contributions to our bottom line for many years to come.
Given that climate change goals cannot be sustainably served by the emerging economies’ need for cheap energy to fuel growth, how is Black & Veatch using its expertise to yield greater efficiency and cleaner discharge from power plants? We are seeing some good initiatives such as the push to uphold renewable energy as the “fifth national fuel”. However, fossil fuel will continue to contribute a substantial portion of the energy mix in Malaysia, like most developing countries in Asia. Most projections still put fossil fuels use at more than 70% of the fuel mix in Malaysia in 2020. There are ways to make such plants cleaner and more efficient. In Asia, we are helping to design coalfired power plants with supercritical or ultra supercritical technologies. These designs mean less coal per megawatt-hour is required compared to conventional, traditional coal-fired plants. These clean coal plants operate at higher temperatures and increased pressures, and result in higher thermal efficiencies, lower emissions (including carbon dioxide and mercury) and lower fuel costs. For example in Thailand, with natural gas as a fuel source, we have also implemented the latest gas turbines in a combined cycle mode for improved efficiency – meaning it can cogenerate steam and power. In addition, the latest air quality control technologies are incorporated
into the design of fossil fuel power plants for removal of particulates, mercury and reduction of SOx and NOx. Black & Veatch has also been involved with development work on integrated gasification combined cycle (IGCC) projects and CO² sequestration initiatives, and both address climate change concerns.
Black & Veatch was the global engineering, construction and management consultant for the Long Tan hydroelectric dam in Tian’e, China. It is one of the largest roller-compacted concrete dams in the world. The Long Tan dam opened in 2009
Your firm has a 40-year history in solar energy projects. The solar industry is looking at Asia as the next growth market. Your views on the market conditions here? Most countries in Asia, particularly Southeast Asia, are ideal for solar energy projects, with an abundance of sunlight year round. The solar photovoltaic (PV) industry will see strong
Does Black & Veatch have utilityscale renewable energy projects in this region? In China, we provided owner’s engineer services for the installation of 33 wind turbine generators at the Baicheng Wind Project in Jilin Province. At capacity, the facility is capable of supplying 49.5 MW of wind energy. We are also working as owner’s engineers on several solar PV facilities in India and Southeast Asia ranging from 5 MW to 55 MW. Our work extends beyond the delivery of renewable power plants, though. For example, through our work with the China Sustainable Energy Programme, we have assisted Chinese grantees on wind resource mapping, which was used in a key roadmap project that outlined the viability of 300 GW of wind in China by 2030. Black & Veatch has been investing in smart grid services. What are your strengths compared to other players in this sector? We’ve implemented more than 50 smart grid programmes in North America alone. As far back as September 2010, Gartner published a smart grid global survey placing Black & Veatch and a company we had just acquired at the time, Enspiria, as its fourth- and seventh-ranked global utility service providers. We have five core business divisions at Black & Veatch. Of these, four are closely associated with smart grid services: energy, management consulting, water and telecom. Our depth of knowledge, the expertise we have dotted throughout our business lines and geographic locations set us apart. Add relationships we’ve fostered with utilities throughout the world and the Continued on page 45 •
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Running on star power to save the planet
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“In seven months, the eyes of the world will be on my home country of Brazil on the historic Rio+20 Summit. Twenty years after the first sustainable development summit in Rio, we have not come far enough.”
Gisele Bundchen: xxxxxxxxxxxxx xxxxxxxxxxx xxxxxxx
Global FMCG bags 2011 Green Awards Grand Prix Unilever PLC was announced the overall Grand Prix winner at this year’s International Green Awards ceremony at the iconic Natural History Museum in London. The multinational fast-moving consumer goods giant was praised for its Sustainable Living Plan, which impressed the judges with its strategy to measure progress and embed sustainability across all aspects of the company despite its size and diverse scope. Unilever PLC became the sixth Grand Prix winner, following in the footsteps of the China Environmental Protection Foundation, Keep Britain Tidy, Nokia, Honda and O2 from previous years. The 2011 Grand Prix award was sponsored by Celestial Green Ventures PLC. The UK-based International Green Awards was created in 2006 to showcase the best in class examples of creativity in business, citizen and government initiatives leading to sustainable
Some stars use their celebrity status to make extra income by endorsing more purchases, whether in the form of make-up, credit cards or food products. Others, like Gisele Bundchen, win acclaim by persuading their fans to take greater care of the environment. In recognition of Bundchen’s efforts, and following the public vote alongside fellow nominees including Sir Paul McCartney and Miguel Bose, the International Green Awards recently proclaimed the Brazilian supermodel as the overall winner for the first Best International Green and Responsible Celebrity Award at a gala ceremony in London. Earlier this year, Bundchen had taken on Hollywood actor Don Cheadle in a World Environment Day (WED) Challenge to see who could get more people to take action to plant a new forest. In the official WED Challenge video, she tells her fellow United Nations Environmental Programme (UNEP) goodwill ambassador: “I have so much goodwill to share that I will plant a tree for every activity that is done in my name.” Cheadle responds: “Well, I’ll see your tree and plant two!” “Deal.” Their combined charisma and social media efforts tripled the number of activities against participation levels of previous years. Bundchen won the challenge with 52% of the votes against Cheadle’s 48%, and will be planting her Legacy Forest in Brazil in the spring of 2012. This makes Bundchen’s latest green accolade especially apt, not only because it coincides with the UN’s International Year of the Forest, the theme of this year’s awards, but also because forest protection has long been an issue close to her heart. Bundchen’s interest in green issues began when she saw the impact
Top-earning model and green advocate Gisele Bundchen was recently heralded as “the greenest media exemplar internationally for 2011” at the International Green Awards in London. Green Purchasing Asia takes a closer look at the woman whom Forbes has dubbed “a better investment than the Dow”.
Unilever’s Surf “Small & Mighty” line of concentrated liquid detergent reduces packaging by 40% and water usage by 60%
outcomes. The awards are part of the Royal Society of Arts Environment Award Accreditation scheme and all entries require evidence of efficacy and transparency. In 2010, all categories were opened to global participation.
of deforestation and water pollution on the Xingu River in her home country. This led to her work with footwear brand Grendene, where she used her personal line of sandals to raise funds for environmental projects in the Amazon and the Atlantic rainforests. In 2008, she launched the Projeto Água Limpa (Clean Water Project) in her hometown Horizontina to implement sustainable environmental management. She also has a “green” blog with the tag line “here the fashion is to be responsible”. Bundchen’s green celebrity award comes with the responsibility to continue promoting a global green agenda through the media – an easy task since it was doing this that won her the accolade. It also doesn’t hurt that Bundchen has an impressive record for representing winning brands and causes. In 2007, economist Fred Fuld created the Gisele Bundchen Stock Index, which charts the
This screenshot of a page from the UNEP website shows goodwill ambassadors Don Cheadle and Gisele Bundchen challenging each other to a “green duel” to raise public awareness on environmental issues and plant a forest for World Environment Day 2011
performance of companies represented by Bundchen in comparison with the Dow Jones Industrial Average; to this day, the Gisele has consistently outperformed the Dow. In her acceptance speech video (she was unable to attend the ceremony), she reminds the audience at the awards and everywhere on YouTube: “In seven months the eyes
of the world will be on my home country of Brazil on the historic Rio+20 Summit. Twenty years after the first sustainable development summit in Rio, we have not come far enough. More than ever we need to mobilise our efforts to protect our precious planet and encourage our leaders to do so. I’ll continue to do my part and hope you join me by doing yours.”
track record we’re accumulating in projects in North America, and we’re in a strong position. It’s an area we will continue to invest in.
to the world’s poorest regions. We do this not just because of the potential growth of these markets, but because of our fundamental desire to build a world of difference. Each project needs to be evaluated on a case-by-case basis and pursued based on the value our firm can bring to the client and the region the water system serves.
What’s your firm’s role in Singapore’s global hydrohub? The potential for the water business is greatest in the world’s poorest regions. How can companies like yours creatively do business here? We will celebrate our 90-year anniversary of delivering water infrastructure in Singapore in 2012. We have been engaged in Singapore’s global hydrohub since its inception and we continue to work with its leadership and associated companies. Being an integrated member of the global water industry is core to our strategies and the hydrohub provides a forum where we can engage with other top players. We are also involved in World Bank, Asian Development Bank and other development bank projects that bring critically-needed infrastructure
Black & Veatch is involved in the 1,000 MW power plant project in Manjung, Perak in Malaysia. What role are you playing there, and who are the other technology players involved? Black & Veatch was involved in many power projects in Malaysia during the early to mid-90s. Between 1992 and 1996, we helped Tenaga Nasional Berhad (TNB) upgrade the national grid system from 275 kV to 500 kV and also helped prepare an environmental impact assessment for the proposed upgrade. In 1998, we helped TNB deliver its first natural circulation-type heat recovery steam generator system at the 330 MW combined cycle conversion project in Malacca. During the Asian financial crisis of 1997–98, however, power demand growth reduced
significantly, keeping the reserves margin relatively high. For the Manjung project, we are the sub-contractor to China National Machinery Import & Export Corporation (who is in a consortium with Alstom). Our scope includes engineering, supply and commissioning/ start up of the balance of plant (BOP) equipment. The power island (supercritical boiler and steam turbine) will be supplied by Alstom.
Angling for opportunities around the world From page 43
Subsidised electricity in Malaysia may end in four years. What do you think are the future options? In 1999, the Malaysian government added renewable energy as the fifth fuel to the Four Fuel Diversification Strategy (natural gas, coal, oil, hydro). There is no question that this is the right strategy for Malaysia: to vigorously pursue renewables in its energy mix and decrease its dependency on fossil fuels to remain sustainable. Malaysia should take advantage of the abundance of biomass as a fuel source. Solar PV modules are also being actively promoted but still remain relatively costly and will continue to require government subsidies. •
people
Moulding a greener future with packaging The packaging industry is often seen as a key contributor to industrial and household waste, but Malaysian pulp moulding manufacturer Telic Paper enjoys turnover that’s 100% green business. Founder and managing director Jack Chin Nam Yee and company advisor Ken Tan tell Stephen Ng how a combination of chance, foresight and resourcefulness helped them build a company that takes its environmental responsibility seriously.
Catching the green wave The company started restructuring its business 18 years ago. “The turning point happened in the early 1990s,” recounts company advisor Ken Tan. “Our founder and managing director, Jack Chin Nam Yee, was approached by a Japanese multinational corporation (MNC) with a local operation here in Malaysia with a request to produce recycled moulded paper pulp for their audio-visual products, bound for the EU.” And that was how the young company got its first big break. “The company had the confidence that we could move up the value chain to supply higher value-added products for green packaging and they were willing to give us a chance,” the 57-year-old Chin reminisces. •
Jack Chin Nam Yee • Age: 57 • Managing director of Telic Paper • Graduated from Taoyuan Agriculture College, Taiwan • Chairman of the Malacca Chinese Assembly Hall • His green philosophy: “We strive to do our part in 4R, focusing on biodegradable products to make the world a better place for us and our future generations.”
For nearly two decades, Telic Paper Sdn Bhd has been offering sustainable packaging solutions to corporations seeking to minimise their negative impact on the environment. The importance of this company to global manufacturers’ supply chains was underlined recently when the company won a Sony Supplier Award and was recognised as a Sony Green Partner. Telic Paper is one of the largest manufacturers of biodegradable recycled moulded paper pulp used in protective packaging to cushion electronic products such as DVD players, car stereos, lighting, global positioning system (GPS) devices and mobile phones. Most of these products are made in Malaysia and exported to the European Union (EU), where strict regulations require eco-friendly packaging. The company has come a long way from the early years of its existence, when it was a family business known as Siew Fui Paper Products Sdn Bhd, supplying recycled paper egg trays to its egg farm division.
Chin realised then that this business opportunity would be a worthwhile venture. And thanks to the EU’s legislative requirements for ecofriendly packaging, the new undertaking meant that Telic Paper would be a pioneer in the field. “I saw it was a unique chance to be in the business of ‘making the world a better place’ and if we are good,
Telic Paper: • Location: Malacca, Malaysia • Staff strength: 100 employees • Product sector/category: Biodegradable and/or recycled moulded fibre pulp • Size of factory: Expanding to 9,290 sq m by Q2 of 2012 • Quality and management standards: ISO9001, ISO14001, Sony Green Partner
there will be other rewards as well,” says Chin.
Limited funds hatch creativity Telic Paper went ahead to produce green industrial packaging back in the 1990s when the concept of green business was generally unheard of in Malaysia. The new machinery they needed would cost more than US$1 million if imported and Chin could not justify the purchase just to supply one new client. Compared to the egg tray business, there was no demand volume. Chin and his local partners put their resourcefulness to the test by modifying the paper egg tray machine and experimented with mould-making and design. The raw material mix was also adapted to produce the packaging materials requested by the client. In no time, research and development (R&D) became an important aspect of the business as they saw the potential in entering an industry that was still relatively new. While most of the initial R&D efforts were directed towards designing moulded pulp
packaging and working on the pulp mixture, even that aspect of the business has evolved with more companies going green. “For example, these days we have requests from our clients to work with their engineers and designers on how to replace their polystyrene or EPS (expanded polystyrene) packaging with moulded pulp packaging materials,” says Tan. “Most MNCs presently do not have designers and engineers familiar with designing moulded pulp packaging. Therefore, we work with them to come up with the design.” Tan believes it is R&D that will take their green business to the next level. “We are looking forward to working with universities or FRIM (Forest Research Institute of Malaysia), MARDI (Malaysian Agricultural Research and Development Institute) or SIRIM (Standards and Industrial Research Institute of Malaysia), because we feel there is a lot to learn in our industry.”
At Telic Paper the 4Rs are applied in the following manner: • Replace – Provide ecofriendly (biodegradable and/or recycled) moulded pulp packaging in place of the customer’s existing non-environmentally friendly packaging material • Reduce – Cut down on the use of environmentally harmful products for “green” products (most companies do not switch completely so “reduce” reflects the reality as they transition to green packaging) • Recycle – Collect carton boxes/office
waste paper/used paper-based packaging to be pulped again • Reuse – With recycled items from the client, Telic Paper makes recycled biodegradable moulded pulp packaging which is then sent back to the client.
Ken Tan: • Obtained his bachelor of science degree from UCLA (University of California, Los Angeles, US) and his MBA from the University of Strathclyde, Scotland • Former MD of BESI (a Dutch-listed company) with operations in Malaysia and China • Has 23 years of senior management experience in America, Malaysia and China • Received the Tokoh Pekerja Lelaki (Best Male Employee of the Year) award in 2001 from then Prime Minister, Tun Dr Mahathir Mohamad, for his contribution to the company and community.
Options open amid scale-up Given that Telic Paper products are mostly for export, the company’s focus is on serving Malaysia-based multinationals that export their products. There is, however, no shortage of other related business opportunities. “We have been approached by companies in Europe and North Asia to design and manufacture for them directly,” says Tan. Today, the company is focused on developing moulded fibre pulp products that are biodegradable. From disposable surgical trays to cupholders and CD trays, Telic’s supplies are made from plant-based pulp fibre, with the most common types being recycled carton boxes and paper. “We have plans to develop different business lines,” says Tan. “However, our existing industrial business (providing biodegradable recycled mould paper packaging) is doing well. Therefore, the additional capacity that we are adding may have to be reallocated to the industrial business.” At present, he says, their monthly capacity is about half a million pieces of recycled biodegradable moulded pulp pieces per month or some five million pieces a year.
Translating the 4Rs into business processes
“We are adding a building to our factory (now being built) and have ordered additional machinery which will increase our capacity to about one million pieces of pulp per month (about 10 million pieces per year) – more than double our present capacity.”
Investing in future business Telic Paper’s 18 years in the business has equipped it well to pursue opportunities arising from increased ecoconsciousness. “We believe there is a big market in the food and beverage sector for biodegradable moulded pulp,” Tan says. “The Western world and Japan have already taken the lead on this, and I believe this will be one of the
‘green’ initiatives which will hit the health and environment-conscious Malaysian society. “Only when there is widespread adoption of biodegradable eco-friendly products can economies of scale be achieved. Pricing will then go down.” Meanwhile, by factoring in the cost of a lifetime of “rental space” at the landfills, Tan surmises that the real cost of using non-biodegradable products is already much higher than that of going green. “What is worse is that the price will be paid by future generations,” he says. Being environmentally sustainable is therefore not an option, but a mandate to be taken up now for the sake of the future. •
editorial
EV projects bearing seeds of failure Lithium, the essential ingredient for most EV batteries, is extremely scarce More attention must be given to managing scarce oil resources
By Andrew McKillop
Can we switch to electric cars? The simple answer is no – and the complicated answer is also no. Consumers in almost any motorised car-loving country, now including China and India, whose car industries have until recently shown straight-line upward growth (with China already vastly outdistancing the US by car output) have a common complaint at the fuel filling station. They whine and complain about oil prices because they buy gasoline and diesel fuel almost daily or at least regularly, and are keenly aware of price changes. These are usually upward. The “problem of peak oil” has been dusted off in 2011, and has started becoming an almost respectable theme for the elected – and self-elected – political and corporate guardians of consumer society and civilisation. Their answer now: Electric cars and vehicles, collectively called EVs. On paper and in the imagination, switching from OVs (oil-fuelled cars) to EVs looks good for an imaginative future where “renewable electricity will dominate”. Flexibly defined by many politicians, this imaginative future is quite precisely planned and programmed – but certainly not financed and funded – for the European Union’s 27 countries for as long as the EU hangs together in its present format. For the EU27 and by 2020, some 25% of all electricity could or might be produced from renewable sources, such as wind, solar and good old hydropower, as well as a long list of exotic new renewables. This electricity is often sold to the masses as “renewable and free”, but in reality its costs and therefore its sale price is very far from free, even if it is renewable. Meanwhile, using renewable •
electricity to charge EVs looks nice on paper and sounds nice for stressed oil-buying consumers at the fuel filling station, but the details – like EVs costing US$35,000 or US$45,000 each if they are anything like the size, weight and performance of their OVs – can be daunting.
What we find with the “Electric Vehicle Paradox” is that any energy policy or business model which dramatically increases metal consumption in an effort to save oil – must fail and will fail. The oil limit – and others The number of reasons why the switch from OVs to EVs will not and cannot happen in real life are many. This is not primarily a technology issue but concerns a wide sweep of economic, energy and natural resource issues, constraints and limits. In 2010, the world produced an average of 87 million barrels of crude oil per day. That works out to about 4.6 barrels or 190 US gallons per year for each of the planet’s 6.9 billion Natural resource Crude oil Iron and steel Aluminium Rubber (including synthetics) Copper Lead Nickel Rare earth elements Lithium
inhabitants in 2010. The variations in average per capita oil consumption were, as might be expected, extreme, and extremely close-linked to wealth and poverty. Consumers in rich countries like Norway, Qatar, the US and Japan consumed as much as 25 barrels per capita; in poor countries like Nigeria and Chad (which produce and export oil), and Malawi or Burkino Faso (which do not), oil consumption averaged less than 1.5 barrels per capita per year. More importantly, any country with a sizeable OV car fleet consumes much more oil than countries that have not yet got the car bug. This is certain and sure. Equally important, producing cars takes materials like steel, copper, aluminium, rubber, lead, plastics and other raw materials or finished products that are (surprising to some, perhaps!) not in unlimited supply. For EV production we need even rarer materials. The table below is a classic “step down” hierarchy that in large part is fixed by factors as hard to change and to talk around as the average crustal abundance of metals and minerals. Waving a magic wand or giving a Facebook launch to the latest gimmick idea – for example, smart grids to help recharge massive EV fleets if they are ever to be built – will not work. Lithium is rarer than the REEs (rare earth metals). The REEs are rarer than nickel, which is much rarer than aluminium, which itself is rarer than iron. The planet was made that way. There is no alternative. This brings up the first and most carefully avoided limit for EV boomers: How do we exchange, substitute or replace oil, using metals and minerals as the oil substitutes? We can easily find the weight of lithium (for lithiumion or lithium iron carbonate batteries)
Global production (metric tonnes) 4 275 000 000 2 400 000 000 41 500 000 24 500 000 16 200 000 4 100 000 1 550 000 130 000 25 300
Per capita annual supply (6.9 billion population) 649.0 kg 363.0 kg 6.3 kg 3.6 kg 2.3 kg 0.65 kg 0.18 kg 20 g 4g
needed for each EV. Alternately, if the EV is operated on nickel-metal hydride batteries, we can also calculate the resource requirement. Where REEs are used in the high-density magnets for their motors, depending on model and technology, we can find the amounts of REEs needed (the Nissan Leaf does not use REEs, but gets lower motor performance because of this).
Nissan Leaf reference model We do not yet have any standard reference model for electric cars. They can be family-size sedans or micro cars. Batteries used for EVs vary across a number of technology types, but these always range from less expensive (traditional lead-acid)
time, as the battery lifetime shrinks. (See factbox below for the Nissan Leaf battery and recharging specifications.) Taking these as likely or probable battery specifications for all-electric family-sized EV fleets in the next ten years, scaling up EV production by the number of OVs that are targetted for replacement is a fantasy. We can add that while the US, Canada, the European Union, Japan and South Korea are near saturated and have very slow-growing fleets, this is not the case for China, India, Brazil and all other emerging-economy countries.
The Chinese car boom Car manufacturing has radically shifted
950–975 million OVs, growing at about 55 million a year (after the scrapping of about 20 million a year) is the stuff of fantasy. As we know from the first table, for every tonne of global oil production, we produce 5 kg of aluminium, less than 2 kg of copper, a half kilo of lead, and so on down the scale, to lithium. Like we also know, lithium is the Holy Grail for EV boomers, who can present this light metal as relatively eco-friendly or nontoxic, but this does nothing to change its rarity. It may be fun to know the world’s oceans contain an estimated 230 billion tonnes of lithium – dissolved in about 1,450 billion cu km of water (ie, about 140 kgs of lithium
Nissan Leaf Car weight Power need for recharging (fast charge mode) Power need for 1 million EVs Regular (slow) charge mode (5 hours) Power need for 1 million EVs Battery type and weight Battery materials
Battery recyclability
: 1,575 kg : 50 kW : 50,000 MW : 5 kW : 5,000 MW : Li-ion 200 kg : Lithium, manganese, aluminium, carbon, copper, fluorine, phosphorus, organic solvents : 25.2% (74.8% one-use only)
Nissan Leaf electric vehicle and recharging station at the 2010 Washington Auto Show
to nickel-metal hydride and cellphonetype lithium-based batteries, which are the increasingly convergent choice of most family-sized sedan-format electric car manufacturers. To date, car types that could be termed “reference EVs” are few in number: they include the RenaultNissan Leaf, Chevrolet Volt, BYD E6 and a few others, including the lower-cost, small-sized lead acid battery-powered Mahindra Reva and REVA L-ion. In every case there are factors that separate these vehicles from regular OVs. On a like-for-like basis by weight, passenger capacity, speed and acceleration, EVs usually cost four to eight times more than OVs. Other important factors include battery lifetimes, replacement costs, and real range or distance per recharge, over
east since year 2000, more intensely since 2005. China now produces more cars each year than either the European Union (No 2) or the US (No 3). India’s car output is far behind China’s but is growing at least as fast – at double-digit annual percentage rates. Outside China and India, but among the emerging economies, car production is growing at double-digit rates in several other “newcomer car countries”, including Brazil, Argentina, Turkey, Malaysia, Iran, Thailand and others. Renault’s Carlos Ghosn talks about attaining production rates of one million EVs per year “by about 2016” but the quantum leap needed to match the world’s current output of OVs, about 75 million per year, and then replace the existing stock of around
in every cu km of seawater) but more serious is the need to know the world’s mineable and extractible reserves of lithium. These are mainly located in Bolivia, Argentina, Portugal and Russia and their exact extent is most certainly a controversial subject, but the US Geological Survey in 2007 estimated these may be as little as 13.75 million tonnes. The most optimistic estimates, assuming a large increase in lithium prices, extend this to about 29 million tonnes.
Save oil, save resources Increasing metals and minerals consumption in a vain attempt to conserve oil will rapidly trigger an explosion of non-oil metal and mineral commodity prices. Letting world OV car fleets spiral up, as if there was no •
oil limit, will trigger a huge increase of oil prices – and soon. Under any hypothesis, any scenario, supply and demand imbalances will eliminate all apparent short-term advantages that could or might be obtained from spending large chunks of public money to boost EV production and utilisation. The net result will simply make the situation worse. What we find with the “Electric Vehicle Paradox” is that any energy policy or business model which dramatically increases metal consumption in an effort to save oil – must fail and will fail. The only transport technology that can survive in a resource-constrained world is quantifiable and able to be set by completely transparent criteria. Unsurprisingly it already exists, and only needs recycling: energy-efficient transport measured by full resourceand-energy lifecycle intensity per unit of transport utility delivered (for example, million passenger-kilometres per year). Just as unsurprisingly, the earliest-type EVs, that is several EVs plugged or bolted together and called urban and suburban electric railway transport, have a great fixed-bed and metallic track record, both above ground and underground. The above ground version are called trams. Heard of them? The underground version are called subway or metro trains. Heard of them?
editorial
World car fleets 2010 Region or country
Car numbers (private vehicles below 2,500 kg)
Average number of cars per 1,000 population
European Union
220 million
United States
215 million
440 715
China
79 million
58
Japan
77 million
605
Brazil
65 million
250
Russia
41 million
320
India
22 million
18
Canada
21 million
660
South Korea
21 million
445
Other countries
About 275 million
Variable
World
950–975 million
About 130
To be sure there is a social impediment to broadening the use of rational alternatives. Modern consumers in their US$15,000 oilburning cars need to hurry around major urban centres every day where they can sniff exhaust fumes, pick their noses and move forward at an average 15 km/hour, burning 20 or 30 litres of oil per 100 km, and feel “relevant” or even socially important. This is Consumer Society. Rejoice. What we know from heavyweight global changes operating at this time is that Global Consumer parasites are likely a species on the road to extinction. Satisfying their need to consume will soon become less than interesting, and much less than important. For private one-owner
automobiles, resource-effective technologies range from simple stopstart idle elimination at the low end to Prius-type semi-electric vehicles (with a high dependence on REEs) at the high end, but these technologies are marginal when we look at the resource and energy footprint and resource recyclability. Andrew McKillop is a former energy policy and programming expert at the European Commission, Brussels. He writes and consults about the impact and interface of oil, renewable energy and the sustainable economy, and will be a regular contributor to the Editorials section. This article was originally published on the web and has been adapted for this column.
Dwarfs with tall shadows Life cycle analysis is a tool for low environmental impact product design Responsible usage of products key to holistic product life cycle
Life cycle analysis (LCA) has become today a basis for product makers to rethink their products. LCA is a technique that helps to assess environmental impacts associated with all the stages of a product’s life from cradle to grave, ie, from raw material extraction through materials processing, manufacture, distribution, •
use, repair and maintenance, and disposal or recycling. An increasing number of products are now designed and manufactured to meet the requirements of ecolabels that insist on the exclusion of certain harmful substances, set thresholds on resource consumption (“inputs”) and waste generation (“outputs”). The idea
Dr Prasad Modak is chairman of the Green Purchasing Network of India. His email is prasad. modak@emcentre.com
is to minimise adverse environmental and health impacts, and reduce risks to ecosystems and consumers in all phases of the life cycle of a product. Products that are ecolabelled are therefore lean on environmental impacts. Through changes in design, manufacturing process, packaging and the logistics of distribution, the
product makers meet the ecolabel requirements. LCA provides the strategy. Typically, the life cycle of a product goes through various phases. See illustration (right) of the life cycle phases of a T-shirt. Indeed, each phase of a product’s life cycle corresponds to different intensities of environmental impacts. For some products, the processing or manufacturing phase dominates. For others, it’s the use phase where substantial environmental impacts occur. The impacts in the processing phase are best addressed by the manufacturer through product redesign, influencing the supply chain, deploying cleaner technologies, etc. The use phase impacts of the product, however, are to be managed at the consumers’ end. If the consumer is careless or is unaware of how to use the product correctly, then the impact in the use phase can be substantial. There are many products that have low environmental impact in the processing or manufacturing phase. These products, with their low environmental impact in the production stage, appear to be like “dwarfs” and hence, appeal to consumers making purchase decisions. But in the use phase, the same products lead to significant environmental impacts, especially if abused or carelessly used; the environmental impacts of such products cast “tall shadows”. Examples of such products are incandescent lamps, irons, washing machines, etc. The chart on the right shows the normalised percentage of environmental impacts for a washing machine in different phases. Clearly, you would notice that for a washing machine, the use phase dominates. It is important, therefore, that the product makers and product users work in tandem and communicate with each other. Both must implement responsible manufacturing and undertake responsible product use. Only then will we be able to achieve the goal of sustainable production and consumption. It is our joint responsibility. We, as consumers, should therefore be very particular about the
CLE ASSESSMEN LIFE CY T OF A T-SHIRT Disposal Recycle Use Bleach Detergents Water
Raw materials Fertiliser Energy Water
Reuse
Processing Energy Cleaners Dyes
Transport Energy
Packaging Paper Plastics Waste
Manufacturing Energy Waste
correct use of the products we buy. Today, good product makers provide consumers with guidance on the optimum use of the product not only with regard to safety but also towards minimising resource consumption and waste generation. Often, we do not read the product use instructions carefully or do not practise the instructions in all seriousness. When you get a new washing machine at home, you may wish to hold a “family session” to do a collective reading of the user manual and learn how to use the washing machine in the most energy- and water-efficient manner. For example, it is best to run washing machines with full load and one should practise line drying as much as possible. Levi’s
(Adapted from Worldwatch Institute, Worldwatch Paper 166: Purchasing Power: Harnessing Institutional Procurement for People and the Planet, July 2003, www. worldwatch.org)
has claimed that the use phase impact of a pair of jeans can be reduced by 50% if it is line dried and washed in cold water. If every US household used only cold water for washing clothes, it is estimated that the carbon dioxide emissions reduction would be equivalent to nearly 8% of the Kyoto target for the US! The “use phase” of such products really matters. So, when we buy a product, we should select the product by looking at its full life-cycle impact. As a consumer, take on the responsibility to minimise environmental impact in the use phase and insist on guidance from the manufacturers. Let us be responsible consumers and not cast environmental “tall shadows” with the products we consume!
Life cycle assessment of a washing machine 120 100 80
Energy consumption Air pollution Water pollution Solid waste Water consumption
60 40 20 0 Production
Distribution
Use
Disposal
Source: Andrew Sweatman •
editorial
Rising consumer awareness fuels sustainable business Sign of the times: Green ads are now going mainstream – and at a premium
As a long-term marketer, mediawatcher and journalist, I learnt long ago that you can tell a lot about market trends, the thinking and feeling patterns of not just the overall culture but also the cultures of subgroups within niches – just by studying the ads aimed at them. You can find out too, a great deal about people’s hot buttons and persuasion. When large corporations pay good money to display an ad, it means their research shows their customers want to buy the sort of products, services or ideas described in those ads, and that at least a percentage of them will respond to the types of language, graphics and offers in them. Here is an example related to the green world: I’m looking at a magazine published by McGraw-Hill, about as mainstream a publisher as you can find. The magazine, GreenSource: The Magazine of Sustainable Design, is aimed at green architects, designers and builders. Firstly, it says a great deal that the green design and construction niche is big enough to get attention from McGraw-Hill, and that this magazine seems to have no trouble finding advertisers, even in a depressed economy. Secondly, by looking at the ads, I’m reminded that the bar has risen for sustainable design over the past few years. Going green – and being able to convince a sceptical green consumer base that you’ve done so – is a lot deeper now than simply using recycled materials, driving a hybrid, or caulking all the drafty spaces. All sorts of new issues are coming into play. Layers of complexity I never would have dreamed would become mainstream factors are now being talked about every day. Here are the ads in the first eight pages (before the table of contents): •
Don’t be afraid to ride on the awareness created by other green businesses
As consumer eco-consciousness increases, green businesses previously seen as niche are now being courted as advertisers by big name media owners and dominating premium spots in magazines and online media
The first is a two-page ad for recycled ceiling panels. Joining the trend of making claims believable by quantifying them, this ad claims 100 million pounds of old ceiling tiles were reclaimed, keeping 50,000 tonnes of them out of landfills. These two numbers happen to be equivalent – perhaps the copywriter wasn’t sure which would have greater impact, and so used both. Turning the page – another twopage ad, this one for a “living wall”: “bio-filter technology [that] not only captures airborne pollutants, it breaks them down.” The pictures show a standing forest on the left, a multi-
Shel Horowitz is the primary author of Guerilla Marketing Goes Green. He can be reached at shel@ greenandprofitable.com
storey building wall covered with plants on the right. The outer half of the next page has a half-page vertical ad for “vertical landscaping” (appropriately enough). It shows plants growing thickly on the outside of a two-storey townhouse. The inner half of the page is the magazine’s masthead. The facing page carries a full-page ad for “the only gypsum board that clears the air.” This one claims to permanently remove volatile organic compounds (VOCs) for up to 75 years. On the next page, another halfpage vertical for “drivable grass®” – a driveway paving replacement that allows storm water to drain through to the soil underneath. And opposite that, a full-page ad for a low-emissions certification agency. The last ad before the contents page is for an aluminum building material with 70% to 80% postconsumer recycled content, and ISO certification to prove it. Walls that filter rather than emit pollutants, and paving solutions that recycle rainwater – were these the kinds of things you expected to be dealing with when you decided to take your company green? I didn't think so. It all sounds so complicated! But consider the positive side: if this level of awareness is becoming so common that these are the advertisers snapping up the prized (and expensive) front-of-the-book pages in a major-publisher magazine, imagine the opening it creates for you to push for greater sustainability measures in your company. You can use such publications to prove to the powers-that-be that the world isn’t standing still, and that your organisation needs to step up on sustainability measures and convey that commitment to the public. And that may turn out to be a very exciting task.
information
Banking on dollars, sense and profitability
Maybank Group contributed US$50 million in a first close of US$87.5 million. According to Zafrul, each project will be scrutinised thoroughly. The minimum funding for each project must be in the range of US$10 million, and not more than US$40 million. “Because each project is different, there are no set criteria when we evaluate the viability of a project,” he says. “Since this is a private equity fund, the appraisal of projects will be more stringent than cases involving straight bank loans. We are only interested in power generation projects where ultimately, the bottomline is they are making money. We will not involve
Without proper funding, initiatives on renewable energy remain just good ideas Maybank Group establishes private equity fund worth US$500 million for renewables
By Stephen Ng
Great potential According to Maybank MEACP chief executive officer (CEO) Mumtaz Khan, there is a lot of potential for renewable energy in the region – wind, solar, geothermal, small hydro and biofuels. “For example, the Philippines is touted to be the second highest producer of geothermal power in the world, with 1,904 MW of capacity that supply approxi •
mately 18% of the country’s electricity, while in Indonesia, they have already started using biomass in power generation,” he says. “In Malaysia, there is still a huge potential in the conversion of biomass into electricity.”
Where there is profit to be made, banks will not hesitate to put in the big money; after all, banks are supposed to multiply their stakeholders’ deposits and investment by participating in profitable ventures. This is probably why Malaysia’s US$500 million Green Technology Financing Scheme is finding it difficult to achieve its target by end-2012. Most major banks in Malaysia are still slow to warm up to the scheme, or rather, the projects evaluated by GreenTech Malaysia and stamped as “green” under the scheme. As of November 30th, 2011, only 32 out of the 119 projects certified green under the scheme have received bank loans (worth US$180 million or 36% of the US$500 million allocation). This is despite the Malaysian government bearing 2% of the loan interest and guaranteeing 60% of the loan via Credit Guarantee Corporation Malaysia Berhad (CGC). However, now that one of the biggest banks in the country is putting together a private equity fund of US$500 million for green electricity in Asia, other local banking institutions may become more confident about green technology and renewables. Maybank Group is behind the establishment of the Maybank MEACP Clean Energy Master Fund, which will be managed by Maybank MEACP Pte Ltd in Singapore.
“I see the future. The future is in clean energy. This is why we are putting our money where our mouth is.” – Mumtaz Khan, CEO of Maybank MEACP Pte Ltd
“It is a ten-year private equity fund with a global offering.” – Tengku Datuk Zafrul Tengku Aziz, CEO of Maybank Investment Berhad
The fund will prioritise power generation infrastructure projects using renewable sources, focusing primarily on the Asia-Pacific region, with a focus mainly on China, India, Indonesia, Malaysia, Thailand, the Philippines, Vietnam, Cambodia and Laos. “It is a ten-year private equity fund with a global offering,” says Tengku Datuk Zafrul Tengku Aziz, CEO of Maybank Investment Berhad, who recently signed the memorandum of agreement on behalf of Maybank Group with Maybank MEACP. The
ourselves with the commercialisation of projects straight out of the laboratory, and showing us a green certificate will not guarantee that we will take up an equity partnership in the company.”
Return on investments While analysts generally agree that most of the projects in renewable energy would take at least eight to ten years before seeing a return on investment, Mumtaz is confident there are projects which are already
producing positive cashflow – for example, the windmill technology used in certain parts of Asia. “We plan to also invest in companies which are already in the business and have a good track record in the generation of electricity from renewable sources,” he says. “With such investments, the payback period will be much shorter.” Basically, the return calculated as the internal rate of return (IRR) in the company has to be at least in the high teens.
Fund structure The Maybank MEACP Clean Energy Master Fund is incorporated in the Cayman Islands, while the fund management company Maybank MEACP is incorporated in Singapore. Maybank MEACP is a 50/50 joint venture between Mayban Ventures, a subsidiary of Malayan Banking
Berhad and Mumtaz Khan, founder of Middle East & Asia Capital Partners Pte Ltd. Mumtaz is also Maybank MEACP founder and CEO. Maybank, along with two other major anchor banks, namely the Asian Development Bank (ADB) and International Finance Corporation (IFC), form one of the two parallel investment vehicles. Collectively, the target fund size of the Maybank MEACP Clean Energy Master Fund is US$350 million, with the first close of US$87.5 million coming from a contribution of US$50 million by Maybank Group, and the remainder from both ADB and IFC. Meanwhile, the Overseas Private Investment Corporation of the United States, as a co-financing vehicle, has contributed US$50 million, with targets to raise another US$100 million over the next year.
Good future Power from renewable sources are expected to become more popular in Asia where the industry is expected to grow exponentially. Governments in many parts of the world, especially in Asia, are now pushing hard for renewable energies. The long-term fundamentals are compelling as rising fossil fuel prices, combined with high volatility in recent years, have sparked a greater worldwide interest in clean energy. Countries like Malaysia have vowed that it will totally remove its fuel subsidies by 2016 and electricity tariffs will soar. With the introduction of the feed-in tariff (FiT), renewable energy power generation will increase. “I see the future,” says Mumtaz. “The future is in clean energy. This is why we are putting our money where our mouth is.”
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information
Carbon footprints vary in sizes and shapes Carbon emissions measurement should match a company’s mission Standards and accredited third-party audits can help avoid charges of greenwashing
By Tan Su-Yin
Internally, measuring their carbon footprint allows companies to pinpoint areas to cut unnecessary emissions and achieve greater cost efficiency. Externally, it can give the company an image boost
Any initiative to reduce a corporation’s carbon footprint must start with the measurement of carbon emissions. The understanding of what constitutes carbon emissions measurement, however, varies widely. It extends across rough estimates, the use of generic carbon footprint calculators and audits that aren’t standards-compliant, to rigorous audits and certifications, all entailing different levels of effort, time and cost. Which path a company takes depends on its objectives and the nature of its business. “As with all improvement initiatives, a cost-benefit analysis should be conducted to assess the feasibility of the initiative. We’ve seen some carbon reduction initiatives which don’t cost much but can contribute to big carbon and cost savings, but also vice-versa,” says Rashyid Anwarudin, associate director of PwC Advisory Services Sdn Bhd. •
“An organisation can start off with a simple carbon reporting process at first, by measuring and reporting only the more material emission sources within the organisation. Over time, once their processes become more mature, the company can then expand the scope of their measurement to cover other aspects that are deemed relevant by their stakeholders and themselves.” K Sadashiv, ASEAN Leader for Climate Change and Sustainability Services at Ernst & Young Advisory Services, adds that while estimation could be a way to start, a rigorous assessment is necessary to determine the opportunities and justify to shareholders any investments that may be needed for carbon mitigation. Another issue with estimates is that they bear little credibility for a brand. “Greenwashing” is a term that savvy consumers are wising up to, and applies to companies that appear
to have a good sustainability strategy, but whose operations don’t match the public relations spiel. Third-party audits and certification based on established assessment methods lend greater credibility to the data. Rashyid points out that in some cases, certification is a must.
Benefits of certification “Certification may be a requirement for the organisation to access certain markets and customers. For example, a company supplying biodiesel to Europe is required to obtain certain certifications. To do this, they will need to report on carbon emissions generated throughout their value chain in order to produce the end product. This entails a more thorough carbon measurement process which also requires the company to go through a rigorous verification and certification procedure,” he says. Internally, measuring the carbon footprint is a process that allows companies to pinpoint areas to cut unnecessary emissions and can therefore result in greater cost efficiency. Externally, it can give the company an image boost. However, there are criticisms that the usefulness of carbon footprinting for peer comparisons is limited as protocols to measure carbon aren’t perfect, with many variables and assumptions at work. “The variables and assumptions used when measuring carbon are based on the best available knowledge. This can give rise to uncertainties, but the important consideration here is to be consistent. This means allowing greenhouse gas (GHG) data to be sensibly analysed over time and also enabling comparisons to be made between peers,” says Woo Chi Mun, director of Climate Change & Sustainability Services at KPMG. Standards have been evolving continuously towards universally accepted definitions. “One can benchmark one’s footprint in relation to other companies or competitors so long as one adopts the same or a similar system of measurement,” says Sadashiv of Ernst & Young. “The methodologies for carbon footprinting have become quite sophisticated and globally standardised, such as
by adopting the Greenhouse Gas (GHG) Protocol set out by the World Resources Institute and the World Business Council for Sustainable Development, or as per ISO 14064” (see box on the right). Rashyid adds that certain industry groups are also starting to develop their own methodologies to measure their carbon footprints. For example, the Roundtable on Sustainable Palm Oil (RSPO) working group is developing an approach for the palm oil industry to measure their carbon emissions. Once this is done, it will be easier for RSPO members to compare their carbon emissions “apple to apple”.
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Standards for emissions inventory The Greenhouse Gas (GHG) Protocol, overseen by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), provides standards and guidance for companies preparing a GHG emissions inventory. Over 85% of 2,487 companies who took part in a 2010 Carbon Disclosure Project survey either used the protocol directly or via participation in a climate change programme. In October, the GHG Protocol launched two new standards – the Corporate Value Chain (Scope 3) and Product
Life Cycle standards – which enable companies to measure and manage the full scope of emissions in their value chain and products, and against each other. The ISO 14064, promulgated by the International Standards Organisation and launched in 2006, comprises three standards, respectively detailing specifications and guidance for the organisational and project levels, and for validation and verification. They can be used independently or as an integrated set of tools to meet the varied needs of GHG accounting and verification.
Green rating cannot be a tick-the-box exercise Technical merit does not always take into account users’ needs Living spaces and gathering points should form part of a building’s function
By Thomas SK Tang
The impact of green building labelling schemes on improving the environmental performance of buildings has been significant. The World Green Building Council estimates that buildings certified by green building councils have reduced energy and potable water consumption by 85% and 60% respectively, and reduced waste sent to landfill by 69% compared with non-certified buildings. Yet, as the industry develops, learns and evolves, and as planning regulations and policies become more and more stringent, it is important for green building labelling schemes
to keep at the forefront by setting higher standards and act as the driving force pushing for better performing buildings. Hence, green building labelling schemes are key to ensuring significant environmental initiatives such as carbon reduction beyond the minimum requirements set in individual countries. Despite the obvious benefits that green building labelling schemes bring, they have come under strong criticism. Commonly, cynics decry that these schemes are just a “tickthe-box exercise” that actually distract
designers from creating truly green buildings by entangling them in the quest for points and awards. In the same sense, schemes are criticised for not ensuring an integrated design approach is achieved, as design teams pick and choose credits under certain topics, not on the basis of their actual impact on the design but on the weighting and points they carry. In addition, the lack of supporting data on the incremental cost of assessments and the potential savings is another weakness of schemes around the world. The often bureaucratic process that is required for the collection and submission of the required documentation is also a recurring complaint amongst applicants. To resolve these and other criticisms, the following suggestions are offered: • Ensure a design-integrated approach and an overall design strategy that works for the specific building • Ensure credit weighting reflects the required effort and costs associated with the design features • Increase the number of prerequisites to qualify for labelling • Provide clear and well documented data on case studies for costs and savings • Provide clear indication of areas •
where additional costs are required for an assessment • Simplify the application process and reduce amount of paperwork required • Provide an easy-to-use method of submitting information (templates, online system, etc) • Review submissions based on whether they achieve the intent of the credit, and not just for “ticking the boxes”. Green labelling of buildings is one way of ensuring environmental and sustainability performance. However, it is important we remind ourselves that technical merit does not always take into account the users’ needs. Buildings are living parts of sustainable communities and as such must not be driven just by environmental and energy factors but be cognisant
of societal factors. Living spaces and gathering points for communities should form part of a building’s function as well as pleasing aesthetics and living comfort; these are not always recognised by green labels alone. Green labels will continue to serve as a primary means of sustainability performance assurance for buildings, but to use just this method is to overlook a vital cog – the people that lie at the heart of sustainable communities. Green building labels that incorporate this holistic outlook will be the ones that are the most effective in the future. Dr Thomas Tang is director of corporate sustainability for Aecom Asia. This article was adapted from a paper he delivered at RICS Hong Kong annual conference earlier this year.
Short history of green building ratings • Up until the early 1990s, there was no tried way to assess the overall impact of a building in terms of its environmental performance or to benchmark it against other buildings of its type • 1990: United Kingdom’s BRE Environmental Assessment Method (BREEAM) was the first scheme launched to address this issue • 1996: Hong Kong Building Environmental Assessment Method (HK-BEAM) launched • 1998: US launched LEED • 1998: Australia introduced NABERS and later Green Star in 2005. • 2002: Japan established CASBEE • 2005: Singapore launched Green Mark • 2006: The China Green Building Label system was initiated • 2009: Malaysia launched the Green Building Index
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Malaysian seafood exports shift away from EU
Singapore wins WGBC’s first Regional Leadership Award
Singapore’s Building & Construction Authority (BCA) received the inaugural Regional Leadership Award, one of the six World Green Building Council Government Leadership Awards, for its Green Building Masterplan and efforts in steering the construction industry towards sustainable development in Singapore, and leadership in the green building movement in Asia Pacific. The other five awards: Best Green Building Policy went to San Francisco, US for the San Francisco Green Building Ordinance; the Climate Action Leadership Award went to Mexico City, Mexico for its Climate Action Plan; the Urban Retrofit Award went to Birmingham, UK for Birmingham City Council’s Energy Savers Programme; the Industry Transformation Award went to New York City, US for its Greener, Greater Buildings Plan; and the Most Groundbreaking Policy Award went to Tokyo, Japan for the Tokyo Cap-and-Trade Programme. Details available at www.worldgbc.com (Source: www.news.gov.sg)
The Malaysian seafood sector is shifting its export focus to Asia, Australia and the US because European Union (EU) requirements are too expensive to comply with. Of the 1,000 aquaculture farms in Malaysia, only 16 are certified to supply to local seafood companies exporting to Europe. Upgrading to EU standards is expensive. A farm with 20 prawnbreeding ponds needs at least RM1 million (US$333,000) to upgrade to be compliant with EU standards, depending on farm condition. A large fishing vessel needs about
include wind power, renewable energy, day-lighting technology, sustainable fuels and chemicals. ECP was established in 2009 as a private initiated, managed and financed non-profit organisation. It acts as a leverage for businesses in China and the US, promotes projects in clean energy and energy efficiency, and supports the sustainable development of the energy sectors in the two countries. (Source: www.chinadaily.com)
Nissan Leaf to generate power for homes
Six contracts, worth more than 3 billion yuan (US$470 million), were signed during the US-Shandong Energy Workshop held in the Shandong provincial capital of Jinan on November 29th. Gary Locke, the US ambassador to China, attended the event as the head of a delegation comprising ten world-renowned US-based clean energy companies. These companies are members of the US-China Energy Cooperation Program (ECP) and include Aibemarle Corporation, Solatube International Inc and the UPC Group. Contracts between the two sides
Nissan’s zeroemission Leaf – the acronym for Leading, Environmentally friendly, Affordable, Family – electric car will soon become a secondary power source for houses. The new Smart Home Charging technology will be available in Japan early 2012. Designed to wean households from the national electric grid, the car can also act as an emergency generator in a black out. The Leaf can supply 24 kW of electricity, which is more than enough for a
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US$470 mil in energy deals at US-Shandong workshop
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RM100,000. Banks are reluctant to lend money to aquaculture farms and fishing vessel owners without strong collateral as such businesses are considered high-risk. Texchem Resources, whose key market was Europe, says it will now focus on Japan, China and the US while Golden Fresh said it would focus on Australia, US and the Middle East. (Source: The Star, Malaysia) Smart House with solar and fuel cells. Nissan says a Japanese house with lights, fan, television, clock, mini fridge and air-conditioner uses only 10 to 12 kW of electricity. Nissan hopes to sell the Power Control System box that connects the car to the house at the end of March. The box is likely to cost around 500,000 yen (about US$6,430). (Source: International Business Times)
Japan tops in RE patent applications Japan boasts of having the most patent applications in the field of renewable energies (RE), making up 55% of the world total, followed by the US with 21% and EU with 7%. PCT applications (international patent applications filed under the Patent Cooperation Treaty), South Korea and China follow. The numbers were released by Japan’s Ministry of the Environment on July 27th, 2011 based on a 2010 report by the World Intellectual Patent Organisation (WIPO). They were presented at the 94th Global Environmental Committee of the Central Environment Council as a position document from the former session. Japan is a world leader in solar cells R&D, while its wind power and geothermal generation technologies have maintained equivalent positions with the US and European nations. (Source: Japan for Sustainability)
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China is set for a shale gas revolution which will surpass that seen in the US, says the chairman of China Petroleum & Chemical Corp (Sinopec), China’s second-largest oil company, a day after Reuters revealed Royal Dutch Shell Plc had begun shale gas production in the country. Fu Chengyu (pic), chairman of statecontrolled Sinopec, said it could take five to ten years but that China’s output would exceed that of the US. China currently has no commercial shale gas production. An official with Shell’s partner, PetroChina, a unit of China’s top energy group, state-owned CNPC, told Reuters at the sidelines of the World Petroleum Congress (WPC) in Doha that drilling results from two wells had been positive. In less than a decade, shale gas has taken the US from gas shortage to plans to export liquefied natural gas (LNG), transforming the dynamics of the international fossil fuel market. (Source: Reuters)
Volvo app wins sustainability award An app created by Volvo employees wanting to shrink the carbon footprint of their commutes has been named 2011’s most environmentfriendly project by tech magazine CIO’s Sweden edition. Commute Greener helps users pick the most eco-friendly and efficient way to get to and from work and measure the environmental impact of their choices. Conceived about two years ago in the Volvo IT unit, it now links up a social network of users who say they have managed to reduce the environmental impacts of their commutes by as much as two-thirds by using the personal CO2 calculator. The app has been used in civic and corporate initiatives, starting with the city of Gothenburg, Sweden. •
China at the brink of shale gas revolution
REC picked for 1 MW solar plant in Japan Norway-based REC will supply 1 MW of solar modules in early 2012 for installations managed by Advantec. The company will deploy REC Peak Energy Series Modules across locations in Ehime prefecture in Shikoku, one of
Commute Greener also is being used in the San Francisco Bay Area and in Mexico City. (Source: Greenbiz.com)
Siemens and Shanghai Electric join for China offshore push Shanghai Electric and Siemens will together invest US$226 million to set up two wind-power equipment joint ventures that will merge both companies’ wind businesses in China. The venture will leverage Shanghai Electric’s existing windturbine manufacturing capacity and Siemens’ offshore technology. Shanghai Electric will invest US$41 million for a 51% stake in Siemens Wind Power Turbines (SWPT) while Siemens will invest US$41 million for the remaining stake. The business will be renamed SmartPower Wind Turbines Shanghai and focus on manufacturing turbines, and international sales. Shanghai Electric will also put US$70 million into a new venture, with the tentative name of Shanghai Electric Wind Energy. Siemens will invest US$67.5 million and will own a 49% stake. The second venture will
Japan’s four islands. REC says it is committed to investing further in Japan and looks forward to the new Japanese feed-in tariff that will help to finance largescale commercial and industrial installations. “REC was selected as our module supplier due to the excellent power output of their modules which are well suited for the large solar installations we are developing, in addition to European quality and REC’s commitment to invest here,” says Advantec president Masahide Yamana. REC modules are said to provide 6% more energy than competing brands. Japan is expected to become one of the largest solar markets in the world.
oversee sales and maintenance of the turbines in the Chinese market. It can also sell Shanghai Electric brand turbines. Last June, Shanghai Electric helped Siemens win a bid to supply an offshore wind farm in China. (Source: Recharge)
Unilever #1 in 2011 Climate Counts ratings Unilever reigns as the top-scoring firm in the 2011 Climate Counts assessment of major consumer brands and their work toward corporate climate responsibility, knocking down Nike from its three-year supremacy. The report also shows a steady increase in scores attained by companies as well as a growing number of firms being included in the review. The four highest-scoring firms for 2011 are: Unilever, which scored 88 out of a possible 100 points, AstraZeneca (86 points), and Nike and Siemens (85 points each). Unilever, which enjoys annual revenues exceeding US$63 billion, has committed to slashing its environmental footprint in half by 2020 by following its Sustainable Living Plan. (Source: Greenbiz.com)
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Toyota and BMW are collaborating to expand their greener car lines in existing markets. The two carmakers signed a memorandum of understanding for a “mid-to-long-term collaboration” to research lithium-ion batteries. BMW will also supply diesel engines to Toyota Motor Europe to help Toyota grow its European line-up of diesel-powered cars. The deal was announced at the Tokyo Motor Show in December. BMW has been looking for ways to make its fleet greener both to compete in the marketplace and to comply with regulations. Toyota can help BMW gain a stronger foothold in the hybrid and electric car markets. The Toyota Prius was the world’s first mass-produced hybrid vehicle. Toyota also paired with Ford to speed up the development of hybrid systems for SUVs and trucks, and invested US$50 million in Tesla Motors to move the company toward an all-electric RAV4 SUV. (Source: Greenbiz.com)
GE and Sinergi Perdana ink biomass RE collaboration
General Electric and Sinergi Perdana recently signed an agreement to develop renewable energy (RE) initiatives and foster efficient operations in the palm oil industry in Malaysia. The memorandum of understanding will see the two companies exploring the potential of power generation from palm oil mill effluent (POME) for both captive power and commercial, on-grid application. The collaboration will also be looking at the development of a wastewater treatment solution and solid waste gasification-to-power application.
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Strategies for the Green Economy Joel Makower (author), Cara Pike (afterword) McGraw-Hill
Joel Makower is one of the earlier writers to publish on the green economy. In this book, he has produced an extensive but easy-toread coverage of the topic. In some 240 pages and 34 chapters, he talks about how to incorporate green into a company strategy. It is a practical treatise for the CEO on how to ensure that a company can contribute to the economy – and make a profit – without damaging the environment. He points out how there has been a dysfunction between manufacturers and consumers relating to ecological matters, with critical information required by the consumer to make informed choices either knowingly withheld from the consumer, or simply not communicated. This contention is supported by research by Cara Pike, which forms the appendix to the book. Titled “The Ecological Roadmap – Earthjustice Findings on Environmental Values”, this section offers insights on various demographic and psychographic groups in American society and how they relate to environmental issues. (Readers in other •
parts of the world, however, might find this relevant to them only in limited ways.) The reason for such dysfunction is simply that “green” is still very ill-defined, with even the managers in a company not always being able to agree on what it means, thus making it almost impossible to have the manufacturer and the consumer singing from the same song sheet. The result has been “greenwashing”, where manufacturers make vague or unsubstantiated green claims that do not stand up to scrutiny. The author also says there is a strong disconnect between what consumers think about green and the environment, and what they actually do at the point of sale. He reviews a great amount of research, in a readable way, to highlight this inconsistency. In the process, he questions the methodology used in many studies, some of which are designed to prove the points that their authors – and more particularly, their sponsors – want proven. Some chapters are given interesting titles to pique the curiosity of the reader. “The Oatbranning of Green” and “Hockey Sticks and Tipping Points” are two such. Drawing on his twenty-something years of experience in sustainable business, Makower makes his points memorably through stories and cases involving global companies and household brands such as Clorox, Coca Cola, General Motors, Patagonia, Starbucks and Wal-Mart. The book is capped with a 15-page index to help readers navigate the hefty volume in search of particularly memorable or
useful industry anecdotes and references.
A Selection of Plants for Green Roofs in Singapore Tan Puay Yok and Angelia Sia Centre for Urban Greenery and Ecology, National Parks Board
Urban landscape designers and implementers of green roofs will find this fullcolour photo-illustrated handbook a useful reference for research, planning and
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discussions on rooftop greening initiatives. The first 36 pages introduce green roofs in general and highlight Singapore’s increasing adoption of the practice and its technology in recent years. The chapter entitled “What are Green Roofs” gives a brief history of how modern green roofs originated in Europe in the 1960s to 1970s, especially in Germany and Switzerland. Photographs of various green roofs illustrate the diversity of installation styles and help the reader understand distinctions among green roof-related terms and concepts such as “eco-roofs” or “living roofs” (which support seasonal plants or mimic brown-field ecosystems) and rooftop gardens (typically designed to accommodate more human activity and structural loading). A
reading list is suggested at the end of this chapter. The “Green Roofs for Singapore” chapter makes the case for rooftop greening with research data showing how green roofs help reduce the heat island effect and cut down on other undesirable factors, such as rooftop glare and gaseous pollutants, by which one building can affect the comfort level of occupants in neighbouring structures. The next two brief chapters discuss the challenges of populating a green roof in the tropics and the suitability of plants that have high water-efficiency (ie, are drought-tolerant) but can also withstand the monsoon months, and introduce the Singapore National Parks Board (NParks) green roof plant selection programme. The bulk of this volume is dedicated to an illustrated guide of about 80 pages that walks the reader through various families of green roof-appropriate plants, detailing 76 species in all. For each, the scientific and common names are provided and the plant is described by its key features, cultivation needs, propagation methods, uses and geographical distribution. Through its Centre for Urban Greenery and Ecology, NParks has been studying plants for green roof applications since 2003. This 2008 second edition of its green roof plants guide (the first was published in 2005) features an additional 43 plants. This book was the first, and is likely to be still the only reference on plants suitable for green roofs in the tropics. Those interested in this publication may purchase it online at www.cuge.com.sg/ research/catalog.php