-81E Ţ Issue
PP17241/03/2012 (029499) 8
OPPORTUNITIES: Bright prospects for LED lighting
37
CASE STUDIES: Barefoot College mobilises rural solar power
45
PEOPLE: The man behind China’s Solar Valley
50
56
PURCHASING
EDITORIAL: Is there such a thing as a green product?
ASIA
INFO: Carbon reduction projects come under scrutiny
Renewable energy
Malaysia gets FiT for action
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Contents
PURCHASING
ASIA
From the managing editor’s desk
5
Buy into a green future
7
OPPORTUNITIES
6
Allergy-free latex taps Asian market
6
Bright prospects for LED lighting
8
Acid test for FiT in Malaysia This oil-and-gas exporting country has taken the cautious approach to FiT by capping the renewable energy that go into the energy mix to power the national grid. With the scheme set to take off this quarter, the burning question is this: Will it unlock the true potential of RE or retard it? (See pages 12–27)
Unlocking the Fifth Fuel
13
There’s a lot riding on the feedin tariff scheme, especially the economic spin-offs that will be generated in the years to come
Although LED lighting has only 3% market penetration now, it is set to see double digit growth in the next ten years
Power transmission technology creates buzz
cover
RE investors get FiT support guarantee
16
10
“We’re talking about using less land for huge pylons and power transmission lines for such a long distance.”
Primer on Malaysia’s FiT
18
What the stakeholders say
20
FiT shifts RE demand from West to East
22
Experiences of other countries
24
A quick overview of what the scheme means for investors in RE projects
Case studies of Britain, Spain, Germany, Philippines and Australia show their share of challenges with the FiT
ABB’s Frank Duggan
Malaysian Minister of Energy, Green Technology and Water Datuk Seri Peter Chin Fah Kui addresses the concerns of investors who are building their business on the FiT.
Schneider Electric in solar power play
26
TNB switches strategy on solar farm project
27
Top 5 cleantech trends
28
•
CASE STUDIES
31
Electric car on steroids
31
The EV used to be considered the transport of geeks: slow, weirdlooking and limited in range, it was underdeveloped for want of love and venture capital
Eco-preneur sees abundance amidst waste
34
Outdoor advertising goes green
35
Tata-Sunengy’s floating solar power plant
36
Barefoot College equips rural poor with solar engineering skills
37
Big Apple gets its first solar EV charging station
42
PEOPLE
43
Venture capitalist 43 Peter Grubstein: Profiting from being clean “It never ceased to amaze me that the most profitable companies were also the cleanest.”
China’s Solar King Huang Ming: Look at the basics first
•
41
47
Banning toxic trade in a changing Asian market
47
Secret to building a new market
48
Taking Taiwan’s green consumption to the private sector
49
Is there such a thing as a green product?
50
There is no such thing as an “absolute green”. There will always be shades of green, even across a product category Dr Prasad Modak
INFORMATION
51
India upbeat on renewables
51
It says it’s green, but is it legit?
54
Carbon reduction projects come under scrutiny
56
US rewards foreign businesses for sustainable design
58
Lacey drives up timber trade accountability
59
News briefs
61
Homework
63
45
“My first deal, a solar water heater that could provide hot water for 100 people, earned me 50,000 yuan.”
First Singapore campus hostel to get BCA Green Mark
EDITORIAL
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, Stephen Ng, Suvarna Beesetti, Yeap Jin Soo, V K Shashikumar, Tejas Patel, Nidhi Bhardwaj Columnists: Dr Ning Yu, Dr Prasad Modak, Khoo Hock Aun, Dr Goh Ban Lee Marketing & sales Sam Thong (Malaysia) +6012 361 0617 Lim Wan Tsau (Singapore) +65 9068 0184 Creative & design Khoo Kay Hong, Ng Jen Ling Production & advertising traffic Eddy Yap Subscription & circulation 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 © 2011: Briomedia Green Sdn Bhd Letters and articles are welcome, and should be addressed to: The Editor at Green Purchasing Asia 3-3 Jalan Solaris 3, 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 (eco-friendly); Text 80gsm Royal Express Silk PEFC/FSC
From the managing editor’s desk David Lee Boon Siew boonsiew@ greenpurchasingasia.com
Simple symbols convey so much more than words ever can. They do so because they latch on easily to the subconscious. And they never ever go away. The doodle reproduced here is one of them. It was done by my publisher Lim Siang Jin in a brainstorming session to find the tempo for this magazine. Being an artist, a fact he shares with close friends, he draws his thoughts on his Panasonic electronic whiteboard. He didn’t want a flat-liner; he wanted a seismogram, with all its gloriously unpredictable seismic wave patterns, to guide the layout plan. Being an amateur mind-mapper myself, the doodle kept popping up as we tackled the adrenaline-pumping job of putting this inaugural edition of Green Purchasing Asia to bed. We were challenged to provide the waves and peaks in every story that we wrote and every page that we designed; to always lift the flatliners. Those who had read our preview issue in April will now see grey text thankfully broken up with artistic tools that include important numbers being turned into graphics, and LED lights replacing sub-heads. We know that when you read our magazine, whether in print or on your new iPad2 or other electronic tablets, it will be a more delightful experience. The seismogram doodle is also credited for the choice of topics that we have tackled in this issue. The cover story, for instance, is an example of Malaysia’s brave new policy choice to avoid the flatliners in the economy. For sure, the feedin tariff is a political hot potato in a country that has been fed subsidised
electricity since 1997. The energygobblers will have to pay a 1% tariff increase to fund the use of renewables in power generation, and that may not sit well with them as the country heads towards a general election. But for businessmen and investors who have put their money on the FiT, the assurance by Minister of Energy, Green Technology and Water Datuk Seri Peter Chin Fah Kui that the scheme is cast in legislative guarantees should inspire confidence in the government’s ability to deliver on promises. We thank the minister for granting us the exclusive interview, as promised to us when we first unveiled plans for our magazine to him. One story that readers will probably find “unusual” in a business magazine is that on the Barefoot College. But to me, it is a wonderful tale from our writers in India of how the marginalised can be embraced by technology to bring empowerment. This is one project that governments should emulate, and companies looking for CSR projects can replicate. The green movement is a young one. A lot of growth will take place in this area, and there will be those who greenwash their products and services. To educate readers, we have decided to have constructive engagement with eco-labels, and organisations that promote sustainability. We will have a regular feature to demystify ecolabels. As we build content going forward, we invite you to ride the waves with us. Thanks to an innocuous doodle, we will continue to be inspired to be creative.
Next issue: India’s Greenomics
India’s private investment in clean energy will increase 736% over the next decade, three times that of US or China. •
opportunities
Allergy-free latex taps Asian market
to reduce protein levels in traditional NRL. The outcome is significantly lower water and energy consumption, and less harmful chemicals in wastewater. Overall, the reduced environMulti-patented process reduces allergens in latex mental impact and lower processing costs of NRL help to offset the slightly Modified NRL lowers end-product manufacturing costs higher price of Vystar’s NRL, which is priced comparably to nitrile and neoprene, two other synthetic alternatives. Innovations in clean technology are result is an ultra low-protein variant of Doyle recalls that following an helping to make East-West partnerNRL that can be used to make prodinternational latex conference in 2005, ships in Asia increasingly beneficial. ucts like surgical and exam gloves, the company was inundated with For instance, Vystar Corporation condoms, catheters, bandages, adhesample orders. In 2008, Vystar signed of Atlanta, Georgia, USA, has made sives and foam mattresses that pose a toll manufacturing agreement with strategic inroads into key markets by minimal to no risk of allergic reactions. Revertex Malaysia, the world’s largbringing to the table its unique knowlDoyle says unlike most synthetic est producer of prevulcanised rubber edge on producing natural rubber latex alternatives, his process uses “green lattices and post vulcanisable latex (NRL) minus most of the substance’s chemistry” to modify natural latex so compounds. naturally occurring antigenic proteins. that aluminum hydroxide-modified In October 2010, Vystar secured Its head honcho William R Doyle NRL remains 100% natural. an initial three-year licensing agreesays the corporation’s 2001 to 2007 “As proof, note that bacteria and ment with KA Prevulcanised Latex operations focused on the research, fungi are capable of degrading NRL,” Pvt Limited (KAPVL) of Tamil development, testing and commerciali- he says. “One experiment has demNadu, India whereby KAPVL sation of an alternative to traditional onstrated that latex balloons degrade received exclusive rights to manufacnatural rubber latex (NRL). The result equally as, if not faster than, oak ture and sell Vystar’s ultra-low protein was the Vytex® NRL, which retains the leaves. In contrast, many synthetic allatex in India, Sri Lanka, Pakistan, Bangladesh, Bhutan and Nepal. Through this arrangement, Vystar has access to a protected market where the duties for imported latex raw material hovered around 70% until recent government reductions. In November of the same year, contract manuVystar CEO Bill Doyle with rubber ducks made from Vytex NRL – an example of the wide range of everyday products made from natural rubber latex facturer Richter Rubber Technoladvantages of latex minus most of the ternatives to latex, such as PVC, vinyl, ogy Sdn Bhd of Malaysia announced allergy-causing proteins. nitrile, neoprene and polyurethane, plans to launch two new product Doyle, who also invented Vytex, which are made from petrochemical lines – condoms and ultrasound probe explains: “Out of more than 200 proderivatives, are neither biodegradable covers – made with Vystar’s modified teins contained within NRL, 13 are nor compostable.” When incinerated, NRL. known to be allergens. Fortunately, a such synthetic products typically reAs Asian manufacturers like solution to the protein content of NRL lease toxins and carcinogens into the Revertex, KAPVL and Richter exists. It involves the multi patent-pro- atmosphere, whereas the aluminum improve their green credentials tected addition of aluminum hydroxhydroxide-modified NRL has minimal and product quality through partneride, Al(OH)³, a well-known protein impact on the environment. ships with research corporations binding chemical, to latex while still in Doyle reports that manufacturers like Vystar, such alliances help liquid form.” within the latex-dipped goods industry propel foreign investment in the This process produces protein have cut down on excessive washing region and enhance the geographical complexes that can be removed. The and leaching, processes typically used reach of the innovation partners. •
PURCHASING
ASIA
Buy into a green future Green Purchasing Asia’s main purpose is to provide a well-structured avenue of immediately-useful information to buyers and sellers of green products and services in major sectors, especially in Asia, and to buttress the development of a business community around it. The magazine will cover the following sectors, which have seen the greatest technological innovations and increasing economies of scale: • Renewable energy, including solar energy, wind power, geothermal and mobile applications • Biofuels from food and non-food sources, including palm oil, sugarcane corn and jatropha • Biomass from various organic, inorganic and mixed sources like oil palm, wood, sugar cane, corn and household waste • Green buildings and eco-cities covering, among others, green building certification programmes, environmentally sound building design and materials, retrofits, and resource-saving technology • Transportation, including plugin electric vehicles (EV), hybrid electric vehicles (HEV) and automobile alternatives like rail • Smart grids, which turn consumers into producers of energy, smart meters to track consumption and manage electrical flow and new interconnect standards
• Water and waste management, focusing on desalination technology, reverse osmosis and wastewater and solid waste management • Energy efficiency, whereby technologies, processes, materials and design work together to maximise quality of life and industry output at minimal energy cost • Green finance, viz, venture capital and bank loans, grant programmes (NGOs and government) and government incentives.
To help readers navigate the magazine easily, we have divided it into five broad areas, each assigned a weightage to ensure consistent and adequate editorial space allocation. • Opportunities: These include project announcements, tenders and new eco products and services. This will be a section heavy on actionable information. Weightage: 30% • Case studies: We focus on projects that use green technolo-
gy, like eco-cities, solar farms and waste recovery projects in large plantations. In these articles, we will list out the names and contacts of developers, suppliers and contractors involved in those projects for networking. Weightage: 30% • People: This section focuses on interviews with thought leaders and captains of industry in green businesses. We will also cover small and medium enterprises involved in trailblazing projects. Weightage: 15% • Editorials: Opinion pieces, columns and feature stories on climate change, sustainable development and other relevant subject matters are the meat of this section. It is designed to provoke debate, so that by talking about issues, we think of new ways and approaches to solving problems. Weightage: 15% • Information: This includes news digest, events calendar, letters, reviews of books and reports on climate change, green technology or related topics, market entry conditions and new country regulations, policies and incentives. Weightage: 10% Target readership The government’s role is not only to set the policy environment to drive the green agenda. It is also a massive market player in the economy, accounting for up to 30% of purchases. Any decision by governments to procure green will have a major influence on the market. It is this dual role that makes governments important customers, which is why we are targeting 40% of our print and online circulation at senior government servants. The remaining 60% will be aimed at the business community, international agencies and non-government organisations. •
opportunities
LED market had hit US$250.3 million and this trend is expected to continue.
Production hub East Asia has largely become a production hub for LEDs, with China being the major producer and exporter. The country is already enjoying 53.3% of the market share. The Chinese industrial policy, which focuses on
Bright prospects for LED lighting Europe leads demand but Asia sales expected to soar China is No.1 producer while Japan dominates supply chain
By Stephen Ng
When Joe Brooks first wrote the expected to have the majority share ballad “You Light Up My Life” in in the lighting market. Increased 1977, little did he realise that the penetration will lead to a compound world would experience an evolution annual growth rate of 21.3% from in lighting technology. From the 2010 to 2017. incandescent to the fluorescent, the Last year, global revenues from excitement is now centred around this market hit US$491.1 million, up light-emitting diodes (LEDs). 26.1% compared to US$389.4 million Market research by Frost in 2009. At the moment, market growth & Sullivan shows that energyis concentrated mainly in Europe, saving LED lamps, previously used where legislation and the push for primarily in architectural and greener lighting technology to ambient lighting, have the phase out incandescent lighting potential to soon replace drive consumer demand for incandescent or compact LED lights. For that same fluorescent lights (CFLs). reason, LEDs have found the The research and highest adoption in Europe, consulting firm’s April but another report, OLED publication, World LED Lighting in Asia – 2011 by Lighting Markets, reports NanoMarkets, indicates that that although LED lighting the market opportunities for has only 3% penetration in LED lighting in Asia could be Beamer LED the field of general illumination much greater and hit as high as at present, the market is set to see US$2.1 billion by 2016, with China’s double-digit growth in the next LED lighting market alone estimated at ten years. By 2020, LED lighting is US$420 million. As of 2010, the Asian •
MASTER LEDspot AR111
developing high-tech industries to meet the domestic market, is a boon for the LED lighting markets and manufacturing in the country. Analysts at NanoMarkets predict that Japan will dominate the LED lighting business through 2014. Its sales of LED lighting are expected to hit US$1.1 billion by 2016. The advantage that Japan has is that it has been a global centre for R&D, with some leading companies headquartered there. It also supplies 41.3% of Asia’s LED demand. Japanese firms are in nearly every strategic position in the global lighting supply chain, from design and manufacture through to wholesale distribution. In Korea, sales of LEDs will reach US$230 million by 2016, although it is still early in its embrace of the technology. NanoMarkets predicts that the influence of Samsung and LG, which have both made a strong commitment to LED lighting, will be a strong driver for the LED market in Korea.
Players There are only a handful of global participants, but as the attractiveness of the market increases, it is expected that new entrants will intensify the competition. All three companies in Tier 1, namely Philips, Nichia and Cree, account for half the world production. Others like Osram, Havells-Sylvania and GE Lighting are currently in Tier 2, while Tier 3 companies comprise mainly
LED lighting market: Revenue forecasts (World), 2007 – 2017
Revenue growth rate (%)
1800
Revenue (US$ million)
30
Revenue (US$ million)
28
1600
26
1400
24
1200
22
1000
20
800
18
600
16
400
14
200
12
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Revenue growth rate (%)
2000
10
Year Source: Frost & Sullivan
regional participants like Megaman and Zumtobel from Europe, Illumisys from the United States, and various small national participants and East Asian manufacturers. In the medium and long term, it is expected that companies such as Samsung and Panasonic will also enter the LED illumination market as producers. These companies, whose backgrounds are mainly in electronics and semi-conductors, will take time to establish themselves in illumination applications globally.
Issues Advances in LED technology have to address three major issues – energy efficiency, quality of light and longer life spans that would support LED use in various applications. If there is a good reason for the success of LED illumination, it is that LEDs are a greener alternative, but the key challenge, say analysts at Frost & Sullivan, lies in providing quality assurance at a reasonable price. If the market continues progressing in this area, there is no reason why the
LED market would not continue to expand at a rapid pace, for if a 13W LED bulb emitted as much light as a 100W incandescent light bulb, who would choose to use incandescent light bulbs? In the consumer market, LED fluorescent tubes have been marketed as ECO Tubes because they last longer (up to 50,000 hours) with more than 50% energy savings. Compared to the fluorescent tube, the LED bulb is also environmentally friendly because it does not use mercury, lead or phosphorus.
US$2.1
billion
Projected Asian LED lighting market value by 2016 Current global players:
Projector LED is a compact and powerful fixture using the latest High Power LED technology
TIER 1 TIER 2 TIER 3
Philips, Nichia and Cree Osram, Havells-Sylvania and GE Lighting Megaman, Zumtobel, Illumisys
•
opportunities
Power transmission technology creates buzz
level. Seven regions, including South Asia, will report to him. Duggan has been with ABB since 1985, and has held a variety of roles including global management positions in the process automation division, and country management roles in Europe and Asia. Duggan believes there will be a growing demand for HVDC technology. He cites Malaysia as an example. If HVDC technology were used to move the national grid, all that would be needed is just one HVDC line with two conductors transporting almost one-third (or about 6 GW) of the power supply. In the North Sea, HVDC has been used for oil production platforms. The power is transported from shore to the platform several kilometres away. The longest submarine cable project undertaken by ABB is the 580km NorNed
ABB lands US$900m power transmission project in India using ultrahigh voltage direct current technology Malaysia can contribute significantly in biofuel production
By Stephen Ng
•
Frank Duggan, tells Green Purchasing Asia during his recent visit to Malaysia that HVDC technology’s advantage is the huge cost savings – the fact that power can be transmitted using only two conductors per line for a DC system compared to three conductors per line for an AC system.
“Besides sourcing for green energy, the world has to be more energy efficient.”
High voltage direct current (HVDC) technology, developed 50 years ago in Sweden by power and automation technology company ABB, is generating interest as the world looks for more efficient ways to transfer electricity over long distances. The technology created a buzz at the World Future Energy Summit in Abu Dhabi last year, and in March this year, the company won a US$900 million turnkey power project in India using an updated technology called ultrahigh voltage direct current (UHVDC). When ready, the link will transmit power from Biswanath Chariyali (Assam) in north-east India to the central region in and around Agra (Uttar Pradesh), a distance of 1,728 kilometres. This project is of great interest because it will be the group’s second multi-terminal HVDC link. (The first was constructed in North America from 1990 to 92.) It will be a jointproject with Bharat Heavy Electricals Limited (BHEL), a 100% governmentowned power company that will deliver the remainder of the project, worth more than US$1.1 billion in total. The system will be the world’s first UHVDC link with three converter stations. Two “sending” stations will convert power from AC to DC for transmission over a single power line that will pass through the narrow Siliguri Corridor and deliver electricity to the third, “receiving” station in Agra, where it will be converted back into AC for distribution to end users. Such a multi-terminal solution should reduce costs compared to the alternative of running separate power links from multiple hydropower plants to Agra. Newly-appointed head of global markets and group executive committee member of ABB Ltd, Switzerland,
Frank Duggan sees untapped potential in hydroelectricity generation
“Using UHVDC technology minimises transmission losses and improves efficiency. We are also talking about less land for huge pylons and power transmission lines for such a long distance,” he says. The UHVDC link, operating at 800 kV, will have a converter capacity of 8,000MW. As an upgrade from the HVDC technology, Duggan says, it “represents the biggest capacity and efficiency leap in over two decades.” The Agra link will supply electricity to 90 million people. Dubai-based Duggan, 51, has been a manager of ABB’s India, Middle East and Africa region since 2008. With his new appointment since March 1, Duggan represents the company’s market and regional organisations at its top management
link, which connects the power grids of Norway and the Netherlands. Duggan also cites the example of wind farms in Germany, where the critical success factor of the project was to be able to transport power from the point of production to the users. “Wind as a source of energy is unreliable and low at times. Therefore, efficiency can be improved through ABB’s HVDC Light technology. It is more cost-effective to transport renewable energy from one place to another, since transmission loss is very low,” he says. “The drop in voltage in the transmission service is only around 1 to 2% using HVDC.” HVDC Light is also useful for transporting energy from offshore wind farms to users, as is done in Europe. Increasingly, Duggan says, there have been efforts in power sharing between neighbouring countries. ABB has many examples of projects in Europe where this technology has enabled power to be imported and exported between countries. Duggan also shares his views on other matters:
high-rises will have their own solar panels on roof tops. “Before this can happen, the world may have to look at supporting the industry to reach a critical mass to a point that it is able to support itself. We have seen a similar trend in wind technology. This won’t take more than 20 years, if support is given now.” • Biomass: Malaysia will see significant contribution from this sector. • Biofuels: Again, Malaysia has the potential to reap huge rewards from the production of biofuels amidst a shortage in global supply.
• Hydroelectricity: With the recent tsunami which hit Japan, many countries around the world are now starting to rethink nuclear plants. “There are still a lot of opportunities with the generation of hydroelectricity. If harnessed, the Inga River, which cuts across the African tropical belt, can generate as much as 100 GW of power.” • Malaysia’s feed-in-tariff mechanism: The solar power sector will surge, and this will bring down the cost of producing electricity. Before long, most corporate offices and
A UHVDC valve hall: The thyristor valves of the Jinping -Sunan +/- 800 kV UHVDC link to be constructed in China will resemble the one in this picture. The image shows an ultrahigh voltage valve hall of the Xiangjiaba-Shanghai +/- 800 UHVDC link in China, delivered by ABB to State Grid Corporation of China (SGCC)
• Wave power: This can be harnessed to complement wind power. “After two days of high winds, the tidal waves will usually follow thereafter for another three days. We have to find better ways to generate electricity using wave power too.” • Energy efficiency: Besides sourcing for green energy, the world has to be more energy efficient. Apart from electric cars, perhaps one day in the future, large buildings such as data centres could use DC instead of AC. • Solar power: Malaysia’s focus will mainly be on concentrated solar cells. ABB, which has a stake in Novatech Solar that boasts an innovative concentrated solar power (CSP) technology, recently participated in a pre-qualification exercise for a solar farm project in Putrajaya, Malaysia. Novatech Solar has been a leading provider of Linear Fresnel CSP technology using flat mirrors to concentrate the sun’s energy onto a receiver to produce steam. This technology was used in a 1.4MW plant connected to the Spanish electricity grid. The company is now building the world’s first commercial 30MW Linear Fresnel power plant, also in Spain, and recently won an order to retrofit a solar field to a 2,000MW coal-fired power plant in Australia.
ABB wins US$385m power transmission order in China ABB has won an order worth a total of US$385 million to engineer and supply key equipment for the Jinping-Sunan 800 kV ultra high voltage direct current (UHVDC) power transmission project of the State Grid Corporation of China (SGCC). This involves a US$120 million order to design the system and key equipment in cooperation with SGCC and local Chinese partners, and the supply of key components for the converter stations, including converter valves, the control and protection system and DC yard equipment. Another order worth US$165 million was for the supply of the 800kV UHVDC transformers for the converter stations. The 2,090km power link will transport clean hydropower from Sichuan province in central-western China to the industrialised coastal area in the eastern province of Jiangsu. The UHVDC link will
The Jinping-Sunan project will transmit power over a distance of 2,000km. It will be ready in 2013
have a rated capacity of 7,200MW, and is expected to be energised in 2013. “The Jinping-Sunan project reflects the continued confidence of SGCC in ABB’s technologies and globally proven domain
expertise in HVDC,” said Peter Leupp, head of ABB’s Power Systems division. UHVDC is the biggest leap in transmission capacity and efficiency in more than two decades. Power transmission at ultrahigh voltage levels enables more efficient use of renewable energy sources and reduces dependence on fossil fuels. It also minimises power losses and requires a smaller transmission corridor than conventional technologies. It is particularly suitable for large countries like China and India, where centres of high power consumption are often located far from the energy sources. SGCC is the country’s leading power utility responsible for the construction and operation of a vast power network that covers 26 provinces, autonomous regions and municipalities across a service area that represents 88% of the national territory.
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Acid test for FiT in Malaysia Malaysia is all set to join the countries which pay for renewable energy-generated electricity that is fed into the national grid. It has however adopted a cautious approach by imposing quotas on how much the feed-in tariff scheme will take in every year. This is to avoid the pitfall of the free-for-all approach that had led to some European nations making premature cuts in promised tariff rates, and raising the ire of investors. Is Malaysia’s FiT designed well enough to avoid those mistakes? More importantly, will it unlock the vast potential of renewables and the economic spin-offs that come with it? • The government thinks it has got the strategy right The stakeholders say the conditions must be • right for investors to buy in • And some early birds have flown in for the worm.
Stories from pages 12 to 27 •
Unlocking the Fifth Fuel FiT’s unused quota to be carried forward to 2012 Degression for next year likely to be deferred
By Ann Teoh
LATEST At press time, Minister of Energy, Green Technology and Water Datuk Seri Peter Chin announced an average 8.35% increase in electricity tariff for both industrial and commercial consumers from June 1st 2011. This is partly due to a decision by the government to gradually withdraw gas subsidy from now until December 2015. On top of this tariff increase, come September 1st, they will also have to pay an extra 1% on their electricity bill to fund the feed-in tariff. These are the tariff increases for the various categories of users: • Commercial: from an average of 37.85 sen per kWh to 41.01 sen per kWh, or an increase of 3.1 sen. • Industrial: from 28.56 sen per kWh to 30.94 sen per kWh or an increase 2.38 sen. • Domestic: from 27.39 sen per kWh to 28.63 sen per kWh or an average increase of 4.52% or 1.21 sen per kWh. Those who use less than 300kWh per month will be exempted from the tariff increase. The increase is largely contributed by an increase in the natural gas price to the power sector from RM10.70/ mmBtu to RM13.70/mmBtu with effect from June 1. Electricity price may be increased every six months due to the fuel cost pass-through mechanism that the government has adopted.
It’s a billion dollar question whether Malaysia’s newly-minted feed-in tariff (FiT) mechanism is designed well enough to fully unlock the renewable energy (RE) potential of the oil-andgas exporting country that has long subsidised natural gas for electricity generation. Certainly, the political will has been demonstrated. The two laws that will enable the FiT – the Renewable Energy Act 2011 and the Sustainable Energy Development Authority (SEDA) Act 2011 – were passed by Parliament end April, and are being gazetted. Certain processes will take their course now before the FiT is finally implemented, probably by next month. Even funds to support the first-year targets – at RM189 million (US$62.3 million) – have been set aside. On top of that, it is interesting to note that the government’s economic transformation programme has lately churned out entry-point projects (EPP10) that include solar power plants of higher capacities than those originally planned under the Renewable Energy Policy. These have been injected into the RE targets for the FiT, significantly raising them (see table on page 15). There’s a lot riding on this scheme. By 2020, RE is touted to create a host of spin-off benefits, including: • Savings of RM2.1 billion in external costs to mitigate CO² emissions • At least RM19 billion in loan values for RE projects (at 80% debt financing) • RM70 billion of revenue from RE power • RM1.75 billion in tax income to the government and • 52,000 jobs to construct, operate and maintain RE power plants (at 15 to 30 jobs per MW). These were the projections that Ahmad Hadri Idris, the chief technical advisor to the National RE/Malaysian
Building Integrated Photo Voltaic (MBIPV) project team, presented to the industry in recent months. The success of the national green policy will be measured by the RE quotas uptake, and the realisation of the projections. Many businesspeople are placing expectations on the FiT: power producers, photovoltaic manufacturers, distributors and installers, palm oil plantations set to make money from their empty fruit branches, logistics providers, bankers and insurers, training institutions and trainers, consultants and even colleges and universities who are heavily into research.
Countdown to implementation The bees are buzzing around the honey pot, and from what Green Purchasing Asia has learnt, the frenzy of economic activities will start as early as next month. Industry circles and even the lawmakers themselves, however, think the effects will only be felt in a year or so. People need to be trained to set up electrical systems and to handle machinery. Bankers need to be engaged to fund the RE projects as they still see RE as risky projects. Hadri calls for patience, saying those interested will need to be familiarised with the application process and do their math and some may want to see how others do it before wading in. As usual, there are some early birds who want to catch the action early and have long been prepared. Based on enquiries received so far, Hadri expects 20 to 25 applicants for biomass, biogas and small hydropower. But the biggest attraction is solar, where there will be about 50 corporate players and hundreds of individuals. More than 40 solar photovoltaic installers were listed on the MBIPV website (www.mbipv.net. my) as approved installers. They will now have to seek relisting in the SEDA website after June 30th. “There is this over-excitement in •
the market, and some people are going to be frustrated, but that’s the beauty of it because you have competition, and competition means better costs. At the end of the day, it’s an open market, and the market will balance itself,” he says. The roadmap is simple. SEDA will be set up, probably by next month, after the chairman and CEO and board members have been appointed. The Renewable Energy Fund details would also have been sorted out by then. Next comes the information mechanism – the website – that the public will refer to for guidance on the FiT. Enough time will be given for them to become familiar with it.
Quota system Malaysia’s FiT is based on the German model (and has reportedly received accolades from the German pioneers) but with a big difference: there is a quota system which will effectively limit the growth of each RE source. The quota system means interested energy producers will have to vie for limited megawatts yearly when they apply to be feed-in approval holders. The good thing is once the quota is allocated to a company or individual, it is licensed to make money for the next 20 years, backed by a fixed payment scheme that does not depend on subsidies or economic vagaries. The direct licensee (the main power generator and distributor), which is Tenaga Nasional, is obligated by law to buy the RE from these producers. That said, 219MW was originally up for grabs this year when FiT was anticipated to start in April 2011 but because the FiT has been delayed, the quota for this year will probably be reduced, and the unused portion car •
Ahmad Hadri… likens the FiT to a honey pot
ried forward to next year. The figure is Malaysian Photovoltaic Industry likely to be just over half of the original Association president Shamsudin Khatarget depending on when FiT actually lid is concerned about the degression, starts. This has to be shared among saying the FiT and degression have to four sectors: biogas, biomass, minibe business-friendly to encourage takehydro and solar PV (see table on page up. “If they (the investors) don’t bite, 15 for the quotas). we cannot achieve our target of 5.5% There is market fear that the quofor RE by 2020,” says Shamsudin, who tas will hinder the development of RE is also marketing manager for Sharp and the creation of related economic Solar at Sharp Roxy Sales and Service opportunities. Detractors accuse those Company. behind the quotas of paying lip service Degression principle to RE to protect fossil fuels in the power mix. However, if one studies the The degression principle is based on the expectation that RE technology experience of countries that successcosts will go down over time, as in the fully carried out the FiT and also those case of solar PV. That is why there is that failed, the quota system seems a no degression for mini hydro which sensible way for controlled developis a mature technology. However, ment of RE. This is more so when the Fukushima nuclear plant crisis in the Malaysian experiment of renewJapan may alter the scenario, as some able energy, via the Small Renewable countries have put on hold plans to Energy Project (SREP) that started in pursue nuclear and are opting for solar 2001 has been at best a good experienergy, at least for now. This brings ment and learning opportunity, and at up demand for solar PV, which may worst, a dismal failure. increase prices. The target set by the 9th Malaysia These concerns were expressed Plan in 2005 targeted 350MW of RE during an industry dialogue conducted connected to the grid (or 1.8% of the by the Ministry of Energy, Green power generation mix) by 2010. What Technology and Water for some 300 it got was one-sixth of that, 62.3MW, or a mere 0.4% of the energy mix. Giv- stakeholders in April, and echoed by en this poor record, setting a quota will give the planner a chance to prepare a Shamsudin strong foundation in the initial years. Khalid… the sky is It is learnt that the government is dark, but the rain hasn’t fallen yet considering passing on the “unused” quotas for 2011, to 2012, since it is already mid-year. It is also considering not imposing the degression for 2012. (Read interview with Energy, Green Technology and Water Minister on page 16.) This will please investors, especially those in the solar PV sector which faces the highest degression rate.
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Industry dialogue: The ballroom was still packed with participants after lunch during the Ministry of Energy, Green Technology and Water briefing on the secondary legislations related to the Renewable Energy Act and Sustainable Energy Development Act. Some 300 stakeholders were at that briefing held at a Putrajaya hotel in late April
Annual RE capacity target (quota, MW/year)
What it takes to tap RE for electricity
Year
As with any other country in the world, renewable energy will only supplement the base load of power in Malaysia. Of course, from an almost zero base, it will take a lot of doing and a lot of time to turn RE into a fifth fuel for electricity generation. The country’s current base demand is 10,000MW, with peak demand at 15,000MW. This is being satisfied by power plants that use mainly gas and coal. These are the reasons why RE can only play a limited role, according to Malaysia’s power generator Tenaga Nasional Berhad:
1 2
3
4
Though inexhaustible and nonpolluting, solar and wind power are subject to intermittency. Solar power is capital intensive, and needs vast land areas to produce a reasonable amount of electricity. Studies in several regions in Peninsular Malaysia showed low potential for wind. Because there is not always enough wind, electrical compensation and storage are needed. Biomass, solid waste and biogas have strong potential in Malaysia. Of the 88MW projects under Small and Renewable Energy Programme, nearly half or 40.35MW comes from biomass and biogas plants. These plants, like other fuel-based plants, can be activated at will to meet changing demands. However, there may be competing needs for the fuel. Burning is involved, so the energy is not completely clean.
A comparison of what is needed to produce 1,000MW of electricity Energy source
Fuel for 1,000MWe for 1 Year
Solar
100 sq km of land
Wind
3,000 wind turbines of 1MW
Biogas
800 million chickens
Biomass
30,000 sq km of plantation area Source: Tenaga Nasional
Biogas
Biogassewage
Biomass
Biomasswaste
Small hydro
Solar PV ≤1MWp
5 20 20 25 25 25 30 30 30 25 25 25 20 20 20 20 20 20
5 10 10 10 10 10 10 10 10 10 – – 4 3
55 60 70 60 70 80 90 100 100 100 90 90 80 70 60 50 50 50
10 20 30 40 50 35 30 20 20 10 6 5
20 60 80 60 60 60 50 40 30 20
6 12 14 16 17 19 21 24 28 33 37 41 47 60 80 105 135 175 220 280
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Solar PP Quota (EPP10) MW/year >1MWp 10 35 50 80 110 130 150 160 165 170 30 80 130 250 250 250 250 250 250 300
111 217 274 291 342 359 381 384 383 368 188 241 281 403 410 425 455 495 470 580
Cum. MW 111 328 602 893 1,235 1,594 1,975 2,359 2,742 3,110 3,298 3,539 3,820 4,223 4,633 5,058 5,513 6,008 6,478 7,058
Source: Ministry of Energy, Green Technology and Water, Malaysia Note: These targets assume that the SEDA website goes live in June 2011 and the FiT starts in September 2011.
Examples of potential income from feed-in tariff (FiT) Renewable energy (RE)
Biogas
Biomass
Small hydro
Solar PV
RE installed capacity
4MW
10MW
10MW
6kW
RE generation/month [a]
2,044MWh
5,110MWh
4,166.67MWh
600MWh
FiT rate [b]
RM0.34/kWh
RM0.33/kWh
RM0.24/kWh
RM1.46/kWh
FiT duration
16 years
16 years
21 years
21 years
FiT payment per month = [a x b]
RM694,960
RM1,686,300
RM1,000,000
RM876
Simple payback period
4.8 years
4.5 years
7.5 years
8.6 years
Source: Ministry of Energy, Green Technology and Water, Malaysia
a potential major player privately to Green Purchasing Asia. However, these legitimate fears may be short-term. If there is a shortage of solar panels, prices may not drop that quickly, but in the medium term, economies of scale will even things out. Hadri is optimistic the FiT will deliver. “There’s a difference today. When we did the SREP, they just provided the targets without the means. It’s like providing the food without the tools to eat. Now we provide not only the food, but also the cutlery to enjoy the food,” he says. He credits the willingness and openness of the industry players, especially those who started with the SREP, in sharing their views and even confidential business information with the authorities when the latter developed the laws and the FiT. Engaging Tenaga Nasional took
two full years and industry discussions were sometimes heated. The end results, however, seemed pleasing to Hadri. “Hans-Josef Fell and the late Dr Hermann Scheer, both pioneers of FiT, came to Malaysia to understand what we were doing and they said we were on the right track. That gives us confidence. Of course, there are limitations, like the quotas, but Hans-Josef said that’s fine. You are starting from a zero base, or even negative base. It’s okay to start slowly.” If the people want renewable energy badly enough, they will be willing to pay more, the RE fund will be expanded and then the sector will truly soar. For now, the target is 1.2GW by 2015, and 3.1GW by 2020. These alone will mean RM70 billion in revenue from RE power for companies and individuals by 2020. •
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RE investors get FiT support guarantee
Stakeholders in the renewable energy sector who view Malaysia’s feed-in tariff mechanism as a honey pot, are concerned over certain aspects of the scheme, like the quota system and degression timetable. In an hour-long interview with David Lee Boon Siew, Malaysian Minister for Energy, Green Technology and Water Datuk Seri Peter Chin Fah Kui addresses their grouses, and shares the government’s thinking on growing renewable energy.
•
Investors looking at Malaysia’s feedin tariff (FiT) mechanism as a business opportunity should find comfort in the initiatives the government has taken to ensure the potential problem areas are adequately addressed. The government may be cautious in approach, but it is not short on ambition. To ensure the fund is kick started without a hitch, the government has agreed to inject RM189 million into the Renewable Energy Fund to fund the RE targets for a year, Datuk Seri Peter Chin says. The advance was given via the Performance Management & Delivery Unit (Pemandu), a unit under the Prime Minister’s Department whose role is to oversee implementation of the country’s Economic Transformation Programme and Government Transformation Programme. In the long-run, however, the RE Fund will be fed by a 1% electricity tariff increase. (At press time, Chin held a press conference to say that the 1% increase will take effect from Sept 1st. He also announced an average 7.12% increase in electricity tariff beginning June 1st, partly because of a gas subsidy reduction exercise. However, domestic users who use less than 300kWh per month will be exempted from these increases). Chin says that because there has been a delay in the onset of the FiT, the amount in the RE Fund that is not used for this year will likely be carried forward to 2012. He indicates the FiT will start in July with the set up of the Sustainable Energy “If we renege on our Development AuthorFiT obligations, any ity (SEDA) at an office of the players can use in Putrajaya. the law to sue the As for requests from government. It is as stakeholders that the simple as that.” degression of 8% for 2012 be postponed for the same reason, Chin
says: “This seems to be the case; that we have to adjust.” This indication from the minister will please industry players as whatever tariff that has been agreed on will last for the duration of the agreement – 21 years in the case of solar photovoltaics. The minister touched on a number of other issues in the interview.
be disbursed. We don’t want to keep the money.
On whether RE levy will be increased 2% or 3% to boost the RE sector If we want a larger role for RE, we have to promote it. We can increase the RE levy to boost the pool fund. However, there are other mechanisms we can use to promote RE, like double deduction for investments or (reducing or abolishing) import and excise duties. Don’t forget that electricity consumption grows over time and the 1% levy will translate into a larger amount. It all boils down to the size of the RE fund. For the first year, I am getting RM189 million from Pemandu as advance. As I collect more, and if the pool is big enough to sustain higher quotas, I will do it. After all, the money is earmarked for this purpose. If it is growing the green economy, why not? If we invest a small amount and get big returns from it, why can’t we do it? If you invest a certain amount to grow the economy and it is successful, why can’t we do some more? Those funds can be from other sources, not just from the 1% tariff hike. If the government feels it is a good deal, it can invest. However, if it falls flat, I can’t justify asking for more. The existing quotas are to prevent overheating of the RE industry, but they are not carved in stone. They will be revised accordingly, depending on the funds available.
“We don’t want to fall into the trap that some countries found themselves in because they went overboard.”
Assurance for players in Malaysia’s FiT scheme, given the flip-flop in some countries The law is explicit. We are applying a law passed by parliament. If we renege on it, any of the players can use the law to sue the government. It is as simple as that. The agreements that we sign is part and parcel of the regulations that will come. I am using the law to guarantee you. Which government wants to be sued? This is the inbuilt system. Everything depends on the total amount we can collect, and it will
On the rationale for quotas in the FiT I met investors at the Malaysia-European Union Forum in Vienna, and among other things, they want Malaysia to remove the cap on annual capacity targets. They want a free-for-all as is be-
“If we invest a small amount and get big returns from it, why can’t we do it?”
For the amount of money we have (in the fund), I think locals can take up the quotas. I have many people writing to me. I say you have to bid; I can’t promise you. I think foreign participation will be in providing technology. You have one or two Chinese companies keen to do solar farming here. In the solar sector, Malaysia has the best opportunity to position itself and become a global leader in solar PV manufacturing. Four leading multinational PV companies – First Solar, Q-Cells, Sunpower and Tokuyama – have either set up operations here or have announced their FDIs equivalent to RM14 billion. They provide business opportunities for local players to understand, build capacities, enter the PV business and benefit along the supply chain. On financing of RE projects As of now, there is a lack of awareness among financial institutions because RE projects are still being considered high-risk investments, which makes it difficult for RE developers to source for funding. SEDA and the ministry will look at this issue thoroughly so that action is taken to ensure support from financial institutions in RE development.
On the importance of a transparent online FiT application process Because the process is transparent, it will avoid all sorts of talk on whether so-and-so was selected because of his connections. You can see the quotas online and can see who has been selected at any point of time.
ing done in some European countries. We know however that some have failed when the funds ran out because there were too many players. We can’t be too bullish from the beginning. I would like to see SEDA taking a cautious approach. We start small. This is something new. We don’t want to fall into the trap that some countries found themselves in because they went overboard. On whether foreign participation is crucial to the success of the FiT
On withdrawal of gas subsidy for electricity generation within four years Yes, this is the plan. The government has only this pool of money. You can use it to subsidise fuel (to prevent inflation) but it is non-productive and doesn’t grow the economy. Or you can use it to invest in many productive areas, to build incomes and eventually to build a bigger pool of funds. This is a policy choice. And the choice is that we need to transform our economy. We will increase the electricity tariff. But we will all learn to be more energy efficient. •
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Primer on Malaysia’s FiT Transparent first-come, first-served system Guaranteed access, guaranteed payment once approved
By Ann Teoh
The feed-in tariff (FiT) is an incentive to encourage the private sector to go into green power generation. Renewables make up only 0.5% of Malaysia’s fuel mix. It is hoped that with the FiT, renewal energy (RE) will make up 5.5% of the mix by 2015. Malaysia uses Germany’s FiT as its model, but imposes annual quotas based on the rationale that they will promote orderly development of RE, and will prevent overheating of the market. The quotas also ensure there is enough money to honour power purchases. The government is also cautious about raising electricity tariff too much to fund the growth of RE. (FiT will be paid from consumer electricity tariff.) Malaysia’s FiT are fixed tariffs paid for RE-generated electricity that
is fed into the national grid. How much is paid depends on the type of technology, the year the plant starts operating and the size of the plant. In Malaysia, four types of RE are eligible: biomass, biogas, small hydropower and solar photovoltaic (PV). • Solar PV enjoys the highest tariff, as high RM1.78 (US$0.59) if one includes bonuses for using local products, if it is used as a building material, and if the capacity is up to 4kW. However, an annual degression of 8% is built into the solar FiT. The tariff is fixed for 21 years. • Hydropower enjoys the lowest rate of only 23 to 24 sen, also for 21 years, but there is no annual degression. This is because the technology is mature and will not see drastic price changes.
• Biomass’s basic tariff is between 27 and 29 sen, excluding bonuses for efficiency, use of local products or the use of municipal waste (10 sen, or more than a third of the biomass basic tariff). • Basic biogas tariff is between 28 and 32 sen. The FiT for biomass and biogas are for 16 years. Other aspects of the Malaysian FiT:
Eligibility Almost anyone can be a power generator if they have the capital. However, foreigners and grid system operators, technically referred to as direct licencees, can only own up to 49% of any plans. Entities like cooperatives, municipal councils and management bodies of common properties like
Feed-in tariff rates
Tariff: RM0.23–RM0.24
Tariff: RM0.85–RM1.23
Annual degression: Nil
Annual degression: 8%
Term: 21 years
Term: 21 years
Biomass
Solar PV
Small hydro
Biogas
Annual degression: 0.5%
Annual degression: 0.5%
Term: 16 years
Term: 16 years
•
Tariff: RM0.28–RM0.32
GGS
Tariff: RM0.27–RM0.31
Note: Except for small hydro, bonus payments are given under certain conditions. The above are basic tariff s. See the Renewable Energy Act for full tariff s.
condominiums may also apply. Participants of the Small Renewable Energy Programme (SREP) launched ten years ago and other government-subsidised programmes have to go through the same application process. Those who have renewable power purchase agreements with direct licencees have to terminate them first. Application is only available online. Once approval is given, also online, the quota is immediately allocated.
Bonus Bonus tariff is given for a host of things like solar PV installations on buildings or as building structures (26 sen for every kWH; a generous sum when the tariff for small hydropower is only 23 sen), and locally manufactured PV panels and inverters. There are also incentives for efficiency, like an extra 1 sen for steam-based systems (biomass) with efficiency above 14%. Degression Annual degression refers to the annual lowering of tariff for new power plants. The operative word is “new”. For instance, with a 10% annual degression, Company A which is commissioned
this year may enjoy RM1/kWh tariff for the next 21 years, but Company B which is commissioned next year will only get 90 sen (RM1 minus 10%) for the next 21 years. The degression takes into account market conditions, and the maturity and cost of technology. For instance, the cost of PV systems dropped from RM31,000/kW in 2007 to RM26,000/ kW in 2009. Today, the cost is only RM18,000/kW. The law provides for revisions at least once every three years.
Guaranteed access to the grid The Renewable Energy Act guarantees access to the grid on a first-comefirst served basis, based on a predetermined quota. If you get approval, access duration to the grid is fixed: 16 years for biomass and biogas, and 21 years for small hydro and solar photovoltaics. Quotas Every year, quotas are available for application. For instance, a total of 111MW capacity is up for grabs this year (if the FiT starts in September 2011), to be shared among biogas, biomass, small hydro and solar. The quotas will be reviewed every six months via a computerised system. Unused
Potential impact of Malaysia’s RE policy on energy mix 200,000 Natural gas Hydro Coal Nuclear Combined RE electricity
2015
2025
2030
2040
2045
29,358 (15%)
2035
23,522
14,679
11,229 (9%) 2020
19,865
2011
17,762
0
5,374 (5%)
50,000
16,592 (11%)
100,000
1,228 (1%)
Electricity consumption (GWh)
150,000
2050
Source: Ministry of Energy, Green Technology and Water, Malaysia
balance will be offered to sectors with higher demand.
Funding for FiT Malaysia uses the shared burden principle. This means the cost of REgenerated electricity is shared by all electricity consumers (except those who use less than 300kWh per month). As electricity from RE is more expensive than that from fossil fuels (at least for now), consumer electricity tariff will be increased to fund the FiT via the Renewable Energy Fund. Sustainable Energy Development Authority (SEDA) SEDA will be the statutory body that administers the RE Fund and manages the FiT. It will review the FiT at least once every three years. Targets for renewable energy Malaysia has had a Renewable Energy Policy since 2001, launching it with the Small Renewable Energy Power Programme (SREP) that covered power generation plants of up to 10MW. However, SREP failed due to the lack of a support system. The targets set by the 8th and 9th Malaysia Plans were not met and even revised downwards in the latter. The 8th Malaysia Plan (2001–2005) envisioned 5% renewable energy in the energy mix by 2005. The target was revised downwards to 1.8% in the 9th Malaysia Plan (2006–2010). But as of December 31st 2010, the RE connected to the grid was only 0.4% or 62.3MW. With the FiT, the target has been revised upwards again to 5.5% (1.27GW) by 2015 and 3.14GW by 2020. By 2030, it should more than double to 7GW. Regulations Aside from the Renewable Energy Act 2011 and the Sustainable Energy Corporation Act (SEDA) 2011, there will be seven subsidiary laws which have been discussed with the industry. These will be uploaded on www.seda.gov.my once SEDA is set up. For now see www.mbipv.net.my for details on tariff and other information. The Energy Commission is the authority that licenses power generation. Laws that affect electricity supply generation must be complied with. Approval by SEDA is only for the FiT. •
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What the stakeholders say In a nutshell:
Getting enough skilled workers will be a challenge
2
Need to get banks to understand renewable energy business
3
SREP players waiting to migrate to FiT
Ahmad Shadzli Abdul Wahab,
managing director of Intelligent Power System Technology (IPS) Sdn Bhd (approved solar PV installer), Malaysian Photovoltaic Industry Association (MPIA) committee member in charge of training. Has been in power generation for more than 25 years and was involved in the first solar project in 1982 and the wind turbine project at Pulau Layang-Layang in 1995
Shared risks and profits The immediate impact of the laws is to democratise energy generation and reduce the monopoly by Tenaga Nasional. The financial risks of power generation is also shared by the citizens. Tenaga Nasional now plays the role of providing the path to the grid.
Solar vs nuclear Solar can be a viable option to nuclear, or at least delay the use of nuclear. Looking at the world energy situation and the nuclear disaster in Japan, solar is the way. Germany is the most successful. Solar is democratic because no one can control the sun.
Thomas Brandt,
general manager of Malaysian-German Chamber of Commerce and Industry •
Challenges ahead The main challenges ahead will be skilled workers. I am facing that even now. People needs to be retrained. We need people who know how to install PV panels, lay cables, lay PV panels on roofs. What MPIA is doing We are taking initiatives with regards to training, collaborating with Universiti Kuala Lumpur for skilled workers to provide solar energy courses, and we are talking to the government for electrical competency certificates to also incorporate solar.
Just do it What’s important is to get the FiT politically through first. And this has been done. There is political goodwill and support at the highest levels. Yes, the quotas may be small but green tech is still new in Malaysia and we need to build capacity over time. Personally, I feel there is so much potential for RE in Malaysia. For instance, you have five times more biomass than Germany. The plantation owners can be the Petronases of the future.
4
Investors want higher FiT to increase ROI and interest bankers
Enis Arnaut, general manager for renewable energy for Perak Hi-Tech Park; Technical adviser to Ministry of Energy, Green Technology and Water on hydropower
1
Sufficiency Small hydropower is the best form of renewable energy investment that Malaysia can get into without having to invest and depend on technology from Europe. Financing Banks do not understand renewable energy. I suggest that SEDA organise some seminars for banks to help them understand it. Potential for small hydro The authorities should look at two things: optimise the location of dams and maximise their potential. Small hydros should utilise their full potential instead of tapping a fraction of it. By not fully maximising the potential, the operators deny others the opportunity, and deny the country the renewable energy it is supposed to be enjoying.
Andrew Feng, managing director Kina BioPower Sdn Bhd and Seguntor Bioenergy Sdn Bhd. They own two 10MW biomass power plants in Sabah connected to the grid. Kina has been operating for 28 months and Seguntor 25 months Good rates The FiT is something that all who hope to be renewable energy power generators have been looking for. The SREP failed because the rates were too low. The government now realises that the tariff affects the feasibility of projects, and it’s now at 31 sen (for plants up to 10MW). Money maker When SEDA is set up, we will terminate our renewable energy power
purchase agreement and apply for FiT instead. With FiT, we will have extra revenue of RM600,000 a month per plant. Of course, this is assuming the fuel costs and plant operations costs remain constant. The price of empty fruit branches may go up. Unlike a combined cycle plant, where the fuel is stable, here, every single batch of fuel is different in structure and moisture. It affects the performance of the boilers.
Two new 20MW plants We are planning two bigger plants, 20MW each, in Kinabatangan and Lahad Datu, both in Sabah. Tougher than it looks I don’t foresee the FiT turning palm oil millers into power generators. If it were so easy, it would have happened a long time ago. Many of the palm oil mills are located far from the main road. Transmission lines are expensive. Palm oil millers’ expertise and interest are in palm oil, not power generation. Investing in biomass power plants is expensive. Our 10MW plant costs RM120 million each, and even if you
have 80% financing, you still need RM20 million cash. We got our financing because one of our shareholders is Chubu Electric, the third largest utility company in Japan. So, the bankers have confidence in us. From the banker’s perspective, what do you do if you get an application for financing from a plant that has only two competent persons, and the two leave? What is their security? It takes three to four years to learn how to run a biomass plant properly. Although our Sabah plants are just over two years old, we have a plant in Surat Thani, Thailand, which we have run for more than four years. So, we have gone through our learning curve.
Sabah different from Peninsular Malaysia In Sabah, we can get some 120 mills in a 200km radius for the fuel stock. The mills are mainly owned by individuals unlike in peninsula. In the peninsula, the plantations are mainly owned by FELDA and Sime Darby. They may come on board as power generators to support the project, but not the smaller players.
Degression may lead to regression Lower production of silicon ingots causes price spike Players want degression put on hold
Putting on hold the 8% annual degression for solar PV next year may be the best way to manage the expected surge in demand for solar panels in the next few months, with the feed-in tariff now in place. Bruce Umemoto, chairman of Solarah, the exclusive distributor for SunPower solar PV, said the tsunami-triggered nuclear crisis in Fukushima, Japan had resulted in reduced output of high technology products, including silicon ingots (the basic building block of the solar wafers). This, in turn, has caused a price spike throughout the world. Umemoto says due to the degression, many companies will scramble to get their system implemented this year. This is because
the earlier one gets connected to the grid, the higher the tariff one will enjoy for the next 21 years. The rates are based on the calendar year. This means someone who gets connected next year gets 8% less than someone who gets connected this year. “A degression of 8% is significant in any financial model and decision makers need to be quick to place their orders as a large system of 5MW to 10MW may take some manufacturers three months or more to fulfil the order,” he says. “Two problems will arise from this year-end rush. First, the panels and other equipment may not be ready in time, and second, there may not be enough qualified
installers to complete the system in time. The straight-line degression rate probably should not apply for a few years until the supply chain has recovered, otherwise the FiT will become too low, and companies that have ramped up for the PV solar industry will be indiscriminately hurt through the rejected financing models and a lack of project funding.” The 8% annual degression set by the Ministry of Energy, Green Technology and Water is tied to load, tariff price and funding. Logically, any change in degression will affect the quota, tariff, or generation capacity allocated to solar and other renewable energy sources. The ministry is looking at these issues.
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perseverance for the renewable energy bill. This is quite a feat for anyone in the world.
Bruce Umemoto, founder and chairman of Solarah Sdn Bhd, a solar distributor and consulting company established to help solar manufacturers open product plants in Malaysia. Umemoto played a key role in attracting SunPower Corp to set up its 1.4GW solar PV plant in Malaysia. Solarah is the exclusive distributor of SunPower products in Malaysia Tailor-made fit I believe the FiT will be better implemented here than in western countries because of the time and effort the ministry has taken to review other FiT programmes and understand the Malaysian culture and way of doing business. I take my hat off to Ahmad Hadri Idris, chief technical advisor of the RE/ MBIPV National Project Team for his
Do more I would like to see higher FiT rates to increase the return on investment and to make the package more attractive to bankers. To increase the subsidy will reduce the risk to the players willing to venture into the RE industry in Malaysia. The FiT is based on a very small increase in the electricity bills. The government should think about increasing the tariff and the quotas. More than just kWh cost People interested in installing PV should look into the Levelised Cost of Electricity (LCOE) to compare the cost of energy across different and competing technologies because it takes into account the installed system price and associated costs such as financing, land, insurance, transmission, operation and maintenance, depreciation and other expenses. Too many people look at the cost per watt and not the total installed price against the full
FiT subsidy over 21 years. They may find some products, like ours, produce more energy than an identically-rated mono- or poly-crystalline or thin-film product. Clouds and higher temperatures in Malaysia do not impact some types of panels, and therefore energy yields are higher. Care must be taken to include long term calculations such as degradation of the panel output (generally from -.5 to -1.2% per year), energy yield based on field studies, lifetime energy yields, product warranty and performance warranty (to cover at least 21 years).
Subsidy for electricity With SunPower, First Solar and QCell right in our backyard, one would think the installed base would be much higher than it is currently. The electricity subsidy is a wonderful gift the government gives to its people but it is also the bane of solar PV here. The question is how long can the government sustain this subsidy.
FiT shifts RE demand from West to East Malaysia has potential to be a leading producer of RE in SE Asia Subsidy revisions in some EU countries will reduce demand in that region
Globally, western European countries such as Germany, Spain, Italy and France and the United States have made a strong head start in developing their renewable energy (RE) markets, mainly because of strong government support, especially in generous feed-in tariffs (FiT) for different types of RE sources. Setting up realistic targets, and a good combination of feed-in tariff schemes and predictable long-term subsidies have sustained investors’ interest and have enabled RE, especially wind and solar photovoltaics (PV), to gain critical scale in these markets. FiTs are considered to be a game changer in stimulating market demand as RE is still the most expensive source of power generation in terms •
of installed cost per kilowatt. When compared to Europe and the US, the Asia Pacific region – with the exception of Japan – is a late bloomer in adopting RE technologies. Despite huge potential, market penetration has been very low due to persistent delays in introducing regulatory framework and the lack of long-term commitment from the government to the RE market. Ongoing subsidy revisions in several European countries are likely to reduce demand in that region whereas introduction of subsidies and FiT in the Asia Pacific countries will significantly shift market demand for RE from the West to the East. As RE is an expensive technology for power generation in Asian markets where grid electricity is sold at highly subsidised rates, govern-
42 mil tonnes of CO² This is what Malaysia intends to eliminate by 2020
ment’s push in the form of FiT policy will be the key to promote significant uptake of this carbon reducing technology in the near future. As a result, RE will take a longer time in the Asia Pacific region to achieve grid parity. To make RE attractive and competitive, it
is critical for governments to introduce robust and predictable FiT schemes to sustain investors’ confidence in the market. Besides Japan, Australia, South Korea and Thailand are the major RE markets in the region as they introduced favourable industry policies in 2007–2008 to promote RE growth. Japan’s RE policy is tilted more in favour of developing their domestic solar PV market; Australia promotes RE through its several state specific FiT programmes; South Korea has fallen below expectations in developing their RE market despite a policy; and Thailand has a net-metering policy to promote RE. In 2009, Taiwan introduced its FiT law. Following Taiwan, Malaysia and the Philippines were the major countries in the Asia-Pacific region that
Incentives for renewable energy in Asia-Pacific
showed promise to develop their RE sources. As the Philippines continue to lag behind in launching the FiT programme, Malaysia has made a strong headway by replicating Germany’s FiT model. In April, the Malaysian parliament approved a system of “Advanced Renewable Tariffs” and RE targets by technology, which are likely to come into effect by the second half of the year. The country has planned to install more than 3,000MW of new RE capacity by 2020 out of which 1,250MW will be based on solar PV and 1,065MW from biomass technology. This target has the potential to help Malaysia eliminate nearly 42 million tonnes of carbon dioxide by 2020. Solar PV and biomass, the two major untapped indigenous sources, will be the main RE technologies that will benefit from the FiT programme. These measures have
the potential to catapult Malaysia into being one of the leading producers of RE in South-east Asia. Increasing oil and gas prices is expected to directly impact the retail price of electricity in several countries. As a result, it might be very difficult for governments in the Asia-Pacific region to supply electricity at a subsidised rate to consumers. Growing electricity demand, mounting pressure to remove subsidies on conventional power generating sources, combined with continuous decline in RE system prices will definitely strengthen the business case for large-scale deployment of RE technologies in the AsiaPacific region. This article was authored by Suchitra Sriram, programme manager, Asia-Pacific Energy & Power Systems Practice, Frost & Sullivan.
Renewable energy incentive type
Incentive provided
Countries applied in Asia-Pacific
Feed-in tariffs
Utilities agree to pay customers for RE power generated based on kWh produced, at a rate generally guaranteed for a period of time
Japan, South Korea, Australia (South Australia, Australian Capital Territory, Western Australia), Taiwan, Malaysia
Net metering
Power generated by the RE system in excess of a consumer’s power consumption will spin the existing home or business electricity meter backwards by such excess amount, effectively reducing the consumer’s electricity bill
Thailand, Australia, (Victoria, Queensland)
Source: Frost & Sullivan
Renewable energy market attractiveness by country in Asia-Pacific, 2011-2017
Trend Decreasing
Source
Solar power
Biomass
Wind power
Geothermal
Small hydropower
Australia
Indonesia
Japan
—
Malaysia
—
New Zealand
Singapore
—
—
South Korea
—
—
Taiwan
—
Thailand
—
Stable
Philippines
Increasing
Vietnam
—
Note: Market attractiveness is based on the existing incentive policies, availability of resource, untapped market potential, and private sector participation.
Source: Frost & Sullivan
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Minister, says: “I want to make sure that we capture the benefits of fast falling costs in solar technology to allow even more homes to benefit from FiT, rather than see that money go in bumper profits to a small number of big investors.” Consulting group on climate change, energy and environment, AEA, reports on UK’s first nine months of the FiT scheme: solar PV makes up 67% of the total of 72MW installed capacity, followed by wind at 20%, hydro at 12% and AD at 1%.
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Tussle between the big and small Britain launched its feed-in tariff (FiT) in April last year, but within 10 months, its Department of Energy and Climate Change (DECC) embarked on a fast track review of the rates for fear that large PV installations would gobble up the FiT funds. It proposed to drastically slash the FiT for solar photovoltaic (PV) projects of 50kW and above, causing one industry player to describe it as “strangling at birth”. For those who have invested heavily in such projects, flip-flops in rates affect their ability to pay the financiers. The players have given their feedback and are waiting for a decision. Subject to the outcome of parliamentary scrutiny, the revised tariffs would be introduced from August 1. The DECC review says the FiT scheme was mainly meant for householders, communities and small businesses, not big businesses. About 27,000 had registered for the FiT. An average household PV installation is expected to be only 2.5kW, while 50kW is the threshold for what is considered as microgeneration. Ultimately, however, it is about cost. Extra cost would scuttle the government’s commitment to 10% cost savings by 2014/2015 via the FiT. The review also aims to investigate the low uptake of anaerobic digestion (AD) projects and higher than expected uptake of large-scale PV. The proposed new FiTs are: • 19p/kWh (US$0.31) for 50kW to 150kW, a cut of 38% to 42% on current 2011/12 tariffs • 15p/kWh for 150kW to 250kW, a cut of 51% • 8.5p/kWh for 250kW up to 5MW, and standalone installations, a cut of 71%. The rationale for the cuts given by DECC is that solar PV technology is now 30% cheaper than original projections. Greg Barker, Climate Change
Minimal power price hike from new FiT The Philippines National Renewable Energy Board (NREB) has allayed fears that electricity prices will spike with the new feed-in tariff (FiT) rates, saying the added cost will be about US$0.0025/kWh or 12.57 centavos/ kWh. Malaya Business Insight reports that the proposed feed-in tariff (FiT) rates submitted to the Energy Regulatory Commission were US$0.14 or P6.15 per kWh for hydro, P7 for biomass, P10.37 for wind, P17.65 for ocean energy, and P17.95 for solar. Biomass is projected to make up 43% share of the renewable energy contribution. NREB chairman Pete H Maniego Jr says since only 800MW of renewable energy will be tapped in the next three years – about 10% of total energy consumption – the average increase in the power charge would be 12.57 centavos/kWh.
Subsidies stopped due to fraud Spain’s Energy Commission (CNE) recently suspended solar subsidies for 350 PV installations after discovering they were not producing the electricity they claimed they had. The facilities are believed to not even have been established yet then. PV Magazine quoted a spokesperson from the Spanish PV Association APPA as saying the CNE suspected that more than 15% of the power generators, or 9,000 of the 55,000 had lied about when they were generating electricity. Last July, the authorities announced that around 800MW of installed outdoor PV plants were suspected of having cheated the authorities with fraudulent claims. Spain’s FiT has been riddled with problems, from fraud to lack of funds. Last December, a royal decree was issued to limit the number of hours PV installations can receive the FiT, depending on the amount of solar irradiation and the climatic zone. This way, the government expects to save 740 million euros (US$1.05 billion) from 2011 to 2013. The decree is one of the measures to manage the deficit that came about from the cost of electricity and regulated electricity prices, and has caused much unhappiness in the industry. Last November, Spain issued a decree to reduce its FiT: 5% for rooftop installations of up to 20kW, 25% for those above 20kW and 45% for ground mounted installations. The installations that were approved in 2007 and 2008 that did not have a limitations would now only receive the FiT for 25 years. Despite all these problems, 2.7% of Spain’s electricity came from solar energy in 2010. Spain overtook the United States as the owner of the largest solar power station, with its 432MW solar thermal plant at La Florida.
Contribution of RE sources to electricity generation in Germany
RE makes up 17% of power supply Germany, the pioneer of FiT, is undoubtedly the leader in using renewable energy (RE) to produce electricity. RE made up 17% of the country’s energy mix last year. Wind power takes the lead, according to figures released by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), yielding 36.5 billion kWh last year or about 6% of Germany’s total electricity supply last year while solar nearly doubled its share, contributing 2%. The ministry says RE can cover 40% of Germany’s electricity supply by 2020. Germany’s Renewable Energy Resources Act (Erneuerbare-EnergienGesetz or EEG) and its attendant feedin tariff are generally credited for the successful use of RE. The number of workers in this green sector rose to nearly 370,000 in 2010, or more than 8% from the previous year. It is twice the number of such jobs in 2004 (160,500).
Key success points: • RE reduced wholesale price of electricity by 5 billion euros, and 3.4 billion euros of the subsequent costs for climate change arising from fossil fuel sources (2007) • Ratio of RE sources to final energy consumption doubled from 1.9% (1990) to 3.8% (2000), then tripled to 11% (2010) • Installed capacity for RE more than
Hydropower
Windenergy
Biomass
Biogenic share of waste
Photovoltaics
Geothermal
Total Share of power gross generated electricity used
[GWh]
[GWh]
[GWh]
[GWh]
[GWh]
[GWh]
[GWh]
[%]
1990
15,580
71
222
1,213
1
0
17,086
3.1
1992
18,091
275
296
1,262
3
0
19,927
3.7
1994
19,501
909
569
1,306
8
0
22,293
4.2
1996
18,340
2,032
759
1,343
16
0
22,490
4.1
1998
18,452
4,489
1,642
1,618
32
0
26,233
4.7
2000
24,867
7,550
2,893
1,844
64
0
37,218
6.4
2001
23,241
10,509
3,348
1,859
76
0
39,033
6.7
2002
23,662
15,786
4,089
1,949
162
0
45,648
7.8
2003
17,722
18,713
6,086
2,161
313
0
44,995
7.5
2004
19,910
25,509
7,960
2,117
556
0.2
56,052
9.2
2005
19,576
27,229
10,978
3,047
1,282
0.2
62,112
10.1
2006
20,042
30,710
14,841
3,675
2,220
0.4
71,488
11.6 14.2
2007
21,249
39,713
19,760
4,130
3,075
0.4
87,927
2008
20,446
40,574
22,872
4,659
4,420
17.6
92,989
15.1
2009
19,059
38,639
25,989
4,352
6,578
18.8
94,636
16.3
2010
19,694
36,500
28,710
4,750
12,000
27.2
101,681
16.8
1) In the case of pump storage power plants, electricity generated from natural inflow only 2) Solid and liquid biomass, biogas, landfill and sewage gas; until 1998 only feed-in the general supply grid 3) Share of biogenic waste in incineration plants estimated at 50% Source: BMU-KI III 1 according to the Working Group on Renewable Energy Sources – Statistics (AGEE-Stat); as at: 23rd March 2011, provisional data
doubled from 5,043MW (1990) to 11,937MW (2000), then shot up five times more to 55,702MW (2010) • Its Renewable Energy Resources Act (EEG in German acronym) is cited as the model of best practices the world over • EEG through its three basic elements of guaranteed grid access, fixed fees, no capping, led to investment autonomy through operators who are independent of power supply industry. Germany invested 26.57 billion euros in renewable energy sources installations in 2010, of which 73.4% was in PV • Employment in RE sector rose from 339,500 in 2009 to 367,400 in 2010.
367,400 jobs This is the number of jobs in Germany’s RE sector in 2010, up from 160,500 in 2004.
Solar bonus tariff cuts draw heat The Australian New South Wales government’s decision to cut its Solar Bonus Scheme tariff from 60 cents/ kWh to 40 cents/kWh (US$0.64/kWh to US$0.43/kWh), affecting some 100,000 customers, has generated a lot of heat, says www.energymatters. com.au. Those who signed up under the 20 cents/kWh scheme will see no change. The solar power solutions provider also cited John Grimes, CEO of the Australian Solar Energy Society as saying: “The government set a cap, legislated for the scheme, promoted the scheme heavily. People took up contracts on that basis. The government is now reneging on a binding contract. It is bad form to tear up existing commercial contracts, and sets a dangerous precedent for the government when issuing other contracts.”
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How policy helped grow RE market China’s renewable energy success story shows how a strong policy can create jobs, income and revenue streams for the nascent low carbon industries. According to a United Nations Environment Programme (UNEP) report in 2009, China’s energy sector generated output worth US$17 billion and employed 1.5 million people of whom 600,000 were in the solar thermal industry, 266,000 in biomass generation, 55,000 in solar photovoltaic and 22,200 in wind power. That year alone, some 300,000 jobs were created in renewable energy.
Solar: China, the world’s largest solar PV maker, produced 45% of the global solar PV in 2009. However, it is also set to be a huge consumer of solar PV, with more than 12GW of projects in the pipeline. In 2009, it had about 160MW solar PV installed and connected to
grid. The government has indicated that the target for installed PV capacity in 2020 could be increased more than 10-fold from 1.8 GW to 20 GW. China is also the world’s largest market for solar water heaters, with nearly two-thirds of global capacity. More than 10% of Chinese households rely on the sun to heat their water, accounting for more than 160 million sq m in total collector area. The rapid development of this sector is said to be due to its basic profitability, for both manufacturers of the units and households that install them. How policy helped: China adopted an Implementation Plan on Promoting Solar Thermal Utilisation in China in 2007, under which the installation of solar water heaters was prioritised for big consumers like hospitals and schools.
Wind: The UN report said wind power showed an annual growth rate of more than 100% from 2005 to 2009. With new installations of 13.8GW in 2009, China led the world in added capacity, and is second in terms of installed capacity after the United States. According to the Clean Tech 2010 Report, with 16GW new installations in 2010, China has surpassed US as
the leader in cumulative wind power. China now has a capacity of 42GW. It surpassed its 2020 target of 30GW of installed capacity 10 years early. Its new target for 2020 is 100GW. Domestic wind turbine makers, such as Sinovel Wind, Goldwind Science and Technology, and Dongfang Electric, contributed to an increasing share of total new installations, accounting for at least half of a market dominated by foreign firms until 2008. How policy helped: China implemented policies to encourage jointventures and technology transfers in large wind turbine technology. It also mandated the use of China-made turbines. Its Ministry of Science and Technology subsidised wind energy research and development expenditures, beginning in 1996. The National Development and Reform Commission issued administrative measures and laws to encourage a cut in the price of wind power by stipulating that a competitive pricing bidding model be used for the majority of wind power development in China. See http://www.unep.org/greeneconomy/SuccessStories/RenewableEnergyinChina/tabid/29865/Default.aspx
Energy management giant Schneider Electric is set to bring new verve to the local power sector. The French multinational recently introduced its solar photovoltaic (PV) system to target both domestic and industrial users in Malaysia. At a recent media briefing, the company also announced the appointment of the company’s system integrators – Maxim Energy, Kemuning Structures and Trnco – each lending local expertise to provide a complete integrated solar PV solution for customers. “With all eyes on the recently passed Renewable Energy Act, discussions are quickly turning to how solar PV projects can be implemented in Malaysia. It’s the perfect time to demonstrate the importance of renewable energy sources to not only reduce the burden of energy costs on the economy, but also impact our carbon footprint and prevent an ‘energy dilemma’,” says Peter Cave, Malaysia country president of Schneider Electric. With regional and global success
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Schneider Electric in solar power play
From left: Schneider Electric’s energy efficiency manager, services & project division, Mok Kam Meng; Trnco managing director Terence Lim; Maxim Energy Resources CEO Ungku Abdul Rahman Ungku Abdul Hamid; Kemuning Structures managing director Max Tham and Schneider Electric Malaysia country president Peter Cave
in providing solar PV systems, Schneider Electric claims to be the only solar PV inverter manufacturer with a direct presence in Malaysia and a strong history of helping Malaysian clients “make the most of their energy.” This new solution integrates the specialties of Schneider Electric’s three system integrators in roofing, PV panels and off-grid projects to provide a complete turnkey solution. Quoting Tenaga Nasional statistics,
Cave says the power demand in Malaysia is expected to rise 5% annually from 2011 to 2015, and without strong renewable energy policies in place, Malaysia will soon be confronted with an “energy dilemma”. “We understand that switching to solar PV power is not an overnight process,” he says. “However, waiting longer to implement solutions that are now available in the market will only lead to larger problems in the future.”
TNB switches strategy on solar farm project 5MW project now to be done in three phases New tender to be called this month
Malaysia’s power utility company Tenaga Nasional Berhad (TNB) has decided to switch strategy in developing its showcase 5MW gridconnected solar photovoltaic (PV) solar farm. Instead of implementing the 12-hectare project in one go as originally planned, TNB Energy Services Sdn Bhd (TNB-ES), a whollyowned subsidiary of TNB, will now do it in three phases over 18 months – 2MW-2MW-1MW in that order. The solar farm, which will be the biggest in Malaysia when completed, will be located at TNB’s open cycle 625MW power plant in the administrative capital of Putrajaya. The project is expected to cost between RM60 million and RM70 million. Malaysian company Berjaya Solar Sdn Bhd had last year announced plans for a 10MW solar farm at its Bukit Tagar landfill, as a precursor to a 50MW plant. If this materialises, it will be the leader. However, it is learnt that the company has decided to start instead with a 100kW pilot project. It is still seeking official support for its 10MW plant. Berjaya Solar’s aim is to profit from the feed-in tariff (FiT) which is at 95 sen/kWh for power from solar installations with a capacity of 1MW up to 10MW. To put this in context, Malaysian household consumers pay about 20–30sen/kWh for their electricity.
Keeping options open TNB-ES managing director Shahrir Abdul Latiff tells Green Purchasing Asia that his company will keep its options open regarding the FiT. It will not be an easy decision. The new Renewable Energy Act states that direct licencees (in this case, TNB) can own no more than 49% of the renewable energy plant to be eligible for the FiT. The law is aimed at preventing the main power producer from becoming the major
By Ann Teoh
TNB Energy Services managing director Shahrir Abdul Latiff: Keeping options open on ownership of solar power plant
beneficiary of the scheme. “For this project, TNB is using internal funds, but later we may decide to sell off part of the stake to interested parties if we decide to tap into the FiT,” he says.
“We may decide to sell off part of the stake to interested parties if we decide to tap into the FiT.” There’s a reason for spacing out the project over 18 months. TNB-ES may benefit from lower costs should PV prices drop with higher demand. This is, however, not a given, as prices may change with shifting demand patterns. However, TNB’s focus for now is to set up the solar farm properly. “We want to be a pioneer. This will be the first grid-connected solar farm and our contribution towards realising the government’s initiative to develop more green energy plants.” Because of the change in game plan, TNB-ES has scrapped its first pre-qualification tender that attracted, according to Shahrir, 21 participants, including the big boys like Sharp, Solar World and SunPower. It is expected to call for fresh tenders for
Phase 1 around June. The company has appointed, after an open tender, Angkasa Consultancy Services to prepare the development order while it (at press time) draws up the tender specifications. While it initially planned to use only monocrystalline PV, the revamp now includes the use of polycrystalline for the second 2MW phase, and thin-film, for the final 1MW.
Turnkey approach Shahrir says he expects those who took part in the first tender to also bid for this coming round. PV type and plant size aside, TNB-ES is now looking for a turnkey contractor for Phase 1 instead of acting as systems integrator as originally intended. The earthworks tender will however be for the full 12 hectares. “The second two tenders will depend on how the first pans out,” he says. TNB-ES is not new to solar. The company has set up more than 40 solar hybrid systems – combining solar panels with batteries and diesel generators – around Malaysia (including Sabah) with a total capacity of 3MW, providing electricity to houses and schools in rural areas. Solar hybrids are used when access to the grid is costly. This includes a hybrid system combining two wind turbines of 100kW each, a solar installation producing 200kW, batteries and a generator for the villagers at Pulau Perhentian Kecil, a diving and snorkelling spot in the South China Sea. With knowledge gained from the 5MW project, TNB has ambitions to tap into regional markets like Thailand, Vietnam and Indonesia. So is the 5MW plant the start of bigger things? “We are keeping our options open,” Shahrir says. •
opportunities
Top 5 cleantech trends in Asia This list was compiled by Research Whitepaper based on interviews with 100 cleantech firms, executives and analysts, and government officials in the Asia-Pacific markets, who highlighted these five sectors as emerging opportunities.
Trend 1: Water management is a very broad area, and the demand is spread across the Asia-Pacific markets. In Australia, this is more to do with irrigation and protection of its rivers. In China, this involves controlling water pollution, while in most parts of Western Asia, this relates to the provision of potable water. In India, this relates to the protection of key agricultural industries. Trend 2: Waste-to-energy conversion technologies have been used for many decades, led by Japan and the US, to manage the growing piles of garbage. Some governments are even prepared to help waste management experts set up infrastructure in their countries.
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Japanese prefectures, both east and southern Taiwan, the Philippines, southern Australia and Indonesia.
China, Taiwan, India and Korea are all looking for good waste-to-energy conversion solutions, including recyclable waste processing
Trend 3: Tidal energy has been widely discussed, especially since the Indian Ocean tsunami, and many scientists in Asia are now looking at how to convert wave power into usable energy. Trend 4: Wind energy has been tapped for many years, but the demand remains very strong. There are large-scale wind farms being built and planned in southern Chinese provinces, northern
Trend 5: Cleantech finance is a fast growing segment in the non-technical “green industry”. Many firms are setting up presence in the Asia-Pacific region (popular headquarters are Hong Kong, Singapore and Australia), setting up green financial products trading desks and products, new investment funds that trade carbon credits, energy contracts and renewable energy certificates, creating new job prospects for financial professionals.
Researchwhitepaper.com provides research reports relating to, among other things, capital raising, venture capital, cleantech & environmental industries and biotechnology.
case studies
Electric car on steroids
• The Inizio is custom designed and hand-made by master engineers and fabricators • It runs on a 290kW AC induction motor fueled by a high quality lithium-ion battery and battery management system • Li-ion markets the Inizio in three packages: fast (R), faster (RT) and fastest (RTX)
Li-ion offers three variants of the Inizio: the US$139,000 R, the US$189,000 RT and the US$249,000 RTX, or Rally Touring Extreme (picture courtesy of Li-ion)
This is the Inizio RTX, touted as the fastest car on battery (at least until another contender comes along). It’s good for 170mph and gets from 0 to 60 in three seconds or so. It is a showcase of what can be achieved by mainstream companies if they employ the technology of Li-ion, Inizio’s maker. Latching to exciting developments in the green transportation sector, venture capitalists recently invested heavily in several car makers.
Big ventures, big numbers in the fast green lane Source: cleanenergypipeline.com
• Investments total US$429 million across 25 transactions in first quarter 2011 • This is nearly a five-fold increase over the prior quarter • US-based Fisker Automotive secured US$190 million from undisclosed investors • Coda Automotive got US$76 million from consortium of Harbinger Capital Partners, Riverstone Holdings LLC, Aeris Capital and Angeleno Group
•
case studies
Say halo to battery-powered supercars To sell electric vehicles, first make them sexy Next, make them affordable and fast
By Jason Tan
The battery management system takes the guesswork out of every day driving •
- -
The 81kWh lithium-ion battery pack can yield up to 320km per charge
-
The Li-ion Inizio rotational doors raise on a 90-degree angle, and the custom hydraulic lift system raises the car 3 inches to allow for easy access
Just what is the electric car meant to be a solution to? Pollution? Global warming? Heaving highways? Congested cities? The yearning for travel and freedom? On all counts, the electric car, or EV – in post-SUV parlance – solves the exact same problems as the fossilfuelled one, just in a different package. Explanations in another article. For now, the EV is the big story for the car industry in 2011. The success of the Toyota Prius, especially among the early-adopting Hollywood stars, has rehabilitated the image of the electric car (even if the Prius is only a half-electric car) enough to make the consumer want one, and pitched the likes of Renault-Nissan and BMW into the fray. To explain, the EV used to be considered the transport of geeks: slow, weird-looking and limited in range (such as the G-Wiz and Think), it was
underdeveloped for want of love and venture capital. Unlike the hybrid car, the EV is powered entirely by an electric motor and a great big whacking bank of heavy batteries. Battery technology and its attendant power-management tech is still barely out of the Jurassic era, and the best batteries typically need to be charged overnight for the next day’s commute of between 150 and 300 kilometres (take the otherwise bold and fine Nissan Leaf, for instance). The lack of charging outlets in the parking bays of the average Asian apartment block means EVs have a ways to go before achieving mainstream acceptance. And here lies the rub: the EV may be a true zero-emissions vehicle – but only if the electricity that charges your EV is generated from a renewable source of energy. There is also the issue of those finite resources classified as rare earths, the processing
• The BMW ActiveE comes with four seats, leather upholstery, 200 litres of luggage space, automatic climate control and seat heating • It runs on lithium-ion batteries that fully recharge in four or five hours to give a range of 160km under real conditions • The synchronous electric motor, located on the rear axle, accelerates the car to 100km/h in 9 seconds • Three blocks of high-voltage lithiumion batteries take the place of the engine compartment, the transmission tunnel in the centre and the fuel tank
The Porsche 918 isn’t quite an EV, being a hybrid instead. But it does have two electric motors, one for each axle for around 215bhp in total, to augment what is projected to be a 4.6-litre V8 engine producing around 500bhp. Projected top speed is 199mph, with a 0 to 60mph time of around 3 seconds. Fuel consumption? Around 90mpg. Expect to pay 645,000 euros (over US$935,000) for one of a limited run of 918 specimens. And oh yes, it laps Nurbugring in seven and a half minutes, which is not the fastest ever time around the iconic German test track that is worth its marketing weight in YouTube views, but which those who have ridden shotgun will know is not slow. Production commences September 2013 and you can take delivery by November the same year. Speaking of Nurbugring, Peugeot recently set up stall there, on April 27th, with its own halo car, the scintillatingly named EX1. It already has its own YouTube video, allowing not just a glimpse of this cross between a roller skate and baby moray eel, but a listen of its near-silent progress apart from a firm, crisp, electric whine. Peugeot is claiming the track record for an EV, of around nine minutes. More than the Porsche, the Peugeot is an attempt
• According to Peugeot, the EX1 has broken six records at the legendary Linas-Montlhéry circuit • The Peugeot’s cutting-edge design includes a passenger cell that is sized to reduce loads when cornering • Polished aluminium components on the door of the Peugeot EX1 recall the design of the RCZ and BB1
of which generates radioactive waste, and which are crucial elements in the manufacture of the lithium-ion batteries of your EV, which for now cannot be recycled. Even so, the upside of switching to EVs is not insignificant, given that oil prices are forecast to stay above US$100 a barrel as reserves are depleted and new exploration becomes inefficient, and that ever-stricter emissions laws will continue to be tied with road tax and perhaps even fuel economy standards, such as the US CAFE, in the years to come. Entire fleets of fossil-fuel cars will have to be replaced. The Renault-Nissan group has invested some four billion euros to introduce a four-model line-up of EVs, which it expects to comprise 10% of its sales, or 300,000 cars, by 2020. BMW has launched a new sub-brand of EVs, and also a Mini EV and BMW 1-series EV. But clearly, what is needed is to re-ignite the imagination of the car buyer: in marketing-speak, the EV needs its halo cars that will cast a potent yet pure glow over their more earth-bound brethren. Enter the Porsche 918, and now the Li-ion Inizio and Peugeot EX1.
to convey a new idea of “car” with a new design language that takes into account the packaging possibilities allowed by the new technology used. Which then brings us to the Inizio, which, like the Porsche, has been designed not to shock the natives with the new, but instead comforts those rich baby boomers by looking like a typical sports car with a big fossil-fuel internal combustion engine. It’s good for 170mph and gets to 60 in three seconds or so. But the Inizio is less a contender than a showcase of what can be achieved by mainstream companies if they employ the technology of Li-ion, Inizio’s maker. And it is really to these companies that one hopes the centre of the car world’s gravity has shifted; the fastmoving skunkworks of Vegas-based Li-ion and its counterparts in California such as Fisker, AC Propulsion and Tesla (now part-owned by Toyota) are anathema to the grinding need of global carmakers to utilise their plants to full capacity and their quarterly sales projections. The EV – or the hybrid, or rangeextender or whatever else they call cars nowadays – will only save the world if it is made and sold in a different way, perhaps in the way of coachbuilders of a golden age of cars before industry consolidation killed invention and personal service. BMW already has a new sales model, the ActiveE, for its EV sub-brand. That story remains to be written. •
case studies
Eco-preneur sees abundance amidst waste Malaysian company produces export-quality biomass products Technology sharing provides boost for industry newcomers
By Eleanor Chen
Waste not, want not: 19 million metric tonnes of empty fruit bunch (EFB) are discarded annually by the palm oil industry. Joseph Lim believes his company can help Malaysia’s 421 palm oil mills turn their biomass waste into profitable products
What would you do with 19 million metric tonnes (MT) of empty fruit bunch (EFB) every year that is left to rot, end up in landfills and result in CO² emissions which contribute to climate change? Global Green Synergy Sdn Bhd (GGS) sees this as an opportunity to create value and turn waste into wealth. GGS managing director Joseph Lim, considers it the company’s responsibility to help resolve the problem of palm biomass from Malaysia’s 421 palm oil mills by turning it into something useful and profitable. To this end, GGS has invested in research and development to turn palm residue into value-added products in support of other industries. It turns EFB into dried long fibre (DLF) for China’s mattress and car seat cushion industries. It has also expanded into palm biofuel products and exports palm kernel shell (PKS) to Taiwan and Poland for electricity generation. Its approach is to manufacture at site to manage rising transportation and energy costs; its full capacity is 1,500MT of palm fibre per month. •
But even waste has gone up in price. EFB in Malaysia has seen a 400% price increase from RM5 (US$1.70) per metric tonne two to three years ago to anywhere between RM10 and RM20 today. For something that you used to have to pay people to remove half a decade ago, EFB can cost as much as RM45 to RM50 per metric tonne at current market rates depending on the business model quality, location and whether it is delivered on site. By comparison, China is converting sawdust and wood chips, priced at about RM250 per metric tonne, into wood pellets that are then sold for about 1300RMB or RM601 per metric tonne for power generation. This wide price variance between the two raw materials presents opportunities and room for growth for the biomass industry. Research and development are critical in this industry as biomass energy conversion technology in Malaysia is not mature. “We lack local supply of specialised machinery with higher efficiency, so GGS converts existing
technology from the sawdust, wood chips or rice husk industry to process EFB biomass,” Lim adds. GGS works with local experts on biomass to run higher efficiency systems and a certain percentage of revenue is reinvested into innovation and new technology such as developing composite material to help address the shortage of wood. GGS believes in learning from more mature industries and broader outlooks. Lim visits Europe every year to attend conferences, learn about new technology and ideas and to better understand the European mindset. “We are able to stay 10 to 15 years ahead of our local competition. We need to improve our Asian specifications and standards to meet the EU’s criteria if we want to sell to that market.” The team at GGS is not overly focused on how much they spend and how quickly they must recoup their costs. Instead, Lim practices the law of attraction. “If you squeeze someone, you may be squeezed also. By giving my raw materials supplier a good price, I also attract the kind of buyers who will pay me a good price,” he says. Even with the rising cost of diesel, logistical and infrastructural challenges, and issues with the security of raw materials supply, GGS has been able to retain its customers. Despite being just three years old, the company is working towards their Roundtable on Sustainable Palm Oil (RSPO) certification. Meanwhile, this young company is already giving back to society by sponsoring fertiliser for Orang Asli settlements, teaching the Orang Asli to make compost, and reaching out to the young through school recycling programmes. Lim believes in the need to create and encourages his team to think out of the box. He is convinced that it is only a matter of time and developing the necessary expertise before they achieve their objectives. The team at GGS also believes in sharing whatever they create with the industry and investors. For instance, GGS is running trials on new products – bio-briquettes and pellets as coal substitutes for power generation – via transfer-of-technology options. Furthermore, the company’s openness to sharing their tech-
nology is backed up by their being the first in the market to provide a “Buy Back Guarantee” so that those who invest in the shared technology will immediately have a market for their products. Lim is confident that GGS is doing things right by innovating the business creatively. “The world is full of abundance, there’s no shortage. When you believe in abundance, things will come,” he says.
Made from oil palm waste, palm bio-briquettes (left) can be used as a replacement or complement to fossil fuels such as coal while EFB, made from dried long fibre (DLF) is used in China’s mattress and car seat cushion industries
Number and capacities of palm oil sectors March 2011 (tonnes/year) Peninsular Malaysia Sector FFB mills
Sabah
Sarawak
Malaysia
No
Capacity in operation
No
Capacity in operation
No
Capacity in operation
No
Capacity in operation
248
55,493,200
122
30,939,200
51
11,524,000
421
97,956,400
PK crushers
26
3,952,800
14
2,329,200
4
583,200
44
6,865,200
Refineries
35
13,866,400
13
7,094,300
5
2,242,000
53
23,202,700
Oleochemicals
17
2,598,971
17
2,598,971
Source: http://econ.mpob.gov.my/economy/EID_web.htm
Outdoor advertising goes green Solar-powered LED media advertises sustainably
Built-in four-way bins encourage separation of recyclables
Recent visitors to Gurney Drive, Penang, may have noticed an innovative addition to the popular Malaysian seafront promenade. Fifty solarpowered billboards-cum-recycling bins, dubbed “3R Boxes”, were installed at this and five other locations around the island in late April. The 3R Box is the brainchild of Johnson Yoon, Ho Wei Wah and Wong Hoe Seak, who developed a prototype together and then finetuned it with the help of the community and public and private sector feedback. This most recent project is a collaboration by the trio with ICI Paints (M) Sdn Bhd and the Penang state government. It aims to promote the boxes as collection points to gather leftover paint for safe disposal as part of an ICI Dulux community service campaign (10 out of the 50 units are customised for paint cans Each unit comes collection). Within ten days with four eye-level of the project launch, 4kg of poster-sized panels cans, 7kg of plastic drink botfor advertising or community service tles and some paint cans had messages above four been collected for recycling separate recyclable items receptacles via the 3R Boxes.
After dark, the poster panels come to life, illuminated by LEDs running on solar energy generated by the unit’s rooftop PV panels during the day. More information on this media is available at www.3rboxmedia.com
•
case studies
Tata-Sunengy’s floating solar power plant Aussie technology turns dam into large battery Low-cost, cyclone-proof and less tedious to install
By Tejas Patel
Tata Power recently announced that it will be building India’s first highefficiency floating solar power plant in partnership with Sunengy, an Australian solar power company. Construction of the pilot plant will begin in August. Sunengy chairman and executive director of business development Peter Wakeman says Tata Power, a flagship company of Tata Group, has partnered with Sunengy for its interest in its patented Liquid Solar Array (LSA) technology. Wakeman says the deal allows Sunengy to demonstrate the practicality of its technology in one of the world’s most promising solar power markets.
that track the sun throughout the day, like a sunflower. Rather than mounting the cells on a frame, however, it is made to float on water, making it lowcost, cyclone-proof and less tedious to install as it does not involve any land acquisition. “This nascent technology will be demonstrated in the natural environment; it utilises the water surface for mounting and does not compete for land that can be used for other purposes,” Agrawala says. The LSA was invented by Phil Connor, Sunengy executive director and chief technology officer and a passionate advocate of solar power for 45 years. According to Connor, LSA can be located on and combined with hydroelectric dams to provide breakthrough cost reductions and “on demand” 24/7 supply availability that are necessary for solar power to become widely used. He says hydropower supplies 87% of the world’s renewable energy and 16% of the world’s power, but is limited by its water resource. “An LSA installation could Simulation of LSA technology by Sunengy based on Shasta Dam in match the power northern California output of a typical Tata Power executive director hydro dam using less than 10% of its Banmali Agrawala says this deal is part surface area and supply an additional of the company’s investments in clean six to eight hours of power per day,” and eco-friendly technologies. he says. The LSA uses traditional concenAccording to Sunengy, their modtrated photovoltaic (CPV) technology eling has shown that a 240MW LSA – a lens and a small area of solar cells system could increase annual energy •
How LSA technology works Solar energy from direct sunlight is focused by a thin acrylic lens down through a glass lid into a sealed, partially submerged metal well containing photovoltaic cells. Collectors rotate, tracking the movements of the sun using a light sensor. A wind sensor is connected to the sun tracking software to submerge each unit in the water should winds rise above a predetermined force and to return the lens to its tracking position once the winds have abated. The lens is water-sealed and cleaned automatically. An inverter converts liquid solar array (LSA) power from direct current to alternating current, which is then connected to the power supply system or grid. Source: Sunengy
generation at the Portuguese hydro plant, Alqueva, by 230%. LSA will therefore effectively turn a dam into a large battery, offering free storage for solar-generated energy. Connor says that if India used just 1% of its 30,000 sq km of captured water with Sunengy’s system, it could generate power equivalent to 15 large coal-fired power stations. Sunengy holds the patent for this technology in Australia, Canada, Singapore, South Africa, Russia, Israel, USA, Malaysia, Japan and China, with patent pending in another 12 countries. Tata Power has also recently signed an agreement with the state electricity company in Gujarat to develop a 25MW solar photovoltaic project at Mithapur. The proposed plant is likely to be one of the largest of its kind in India, a company release said. According to Dr Farooq Abdullah, Minister of New and Renewable Energy, India is among the top five countries in the world in terms of renewable energy capacity. Around 9% of the total power generation capacity in the country comes from renewable sources. The Indian government is implementing policies to develop renewable energy sources. It approved the Jawaharlal Nehru National Solar Mission in November 2009. It is an ambitious scheme to establish India as a global leader in solar energy by creating policy conditions for its diffusion across the country, as quickly as possible.
Barefoot College equips rural poor with solar engineering skills Grads transform local village economies in 25 countries Clean energy use cuts air pollution and fuel expenses
Even as many nations in the world swear by nuclear energy as the quickest solution to the global energy crisis, challenging the notion upfront is the success story of Tilonia, a remote village in the Ajmer district of Rajasthan in north-western India. Tilonia is making its mark on the world map for being electrified by solar panels designed and manufactured by illiterate villagers who hail from across the world and received their technical training at the local Barefoot College. An NGO established in 1972, the Barefoot College has been spearheading solar electrification in remote, rural, non-electrified villages since 1989. Its residential campus in Tilonia covers over 7,400 square metres and includes residences, a guest house, a library, meeting halls, an open air theatre, a
By Nidhi Bhardwaj
A classroom of students receiving general training in solar engineering
What a Barefoot College graduate gets to start her new career When a woman finishes her six-monthlong training course at Barefoot College and returns to her village, she is provided with an “electronic workshop” that includes the following key components: 1. 2. 3. 4. 5.
Four modules One inverter Four batteries One pool kit Wires
6. Assembling jig 7. One power supply tester (voltagereading equipment)
The provision of these electronic workshops, worth INR 2 lakh (US$4,400) each, is facilitated by the Barefoot College and mainly sponsored by the UNDP, the government of India, Norvision Church Aid, and the governments of the native countries of the college participants.
pathology lab, a teacher’s training unit, a water testing laboratory, a post office, a craft shop and development centre, an internet cafe, a puppet workshop, a screen printing press and a 700,000litre rainwater harvesting tank. The biggest attraction at the Barefoot College, however, is the solar electrification workshop, where women from villages across India, Bhutan, Rwanda, Africa, Bhutan, Tanzania and Gambia are trained in solar engineering. The training is supported by the Indian Technical and Economic Cooperation (ITEC), a bilateral programme started in 1964 by the government of India and from which 156 countries in Asia, Africa, East Europe, Central and Latin America and Pacific nations continue to benefit. To give an impetus to this training programme, the air travel and training costs for the foreign women being trained in Tilonia is borne by the government of India.
“I handpicked all the candidates during my visits to the remotest parts of Africa, from places which have remained untouched by development so far,” says Sujit Roy, also known as Bunker Roy, founder of the Barefoot College. Noting that these women are usually mothers or grandmothers, we asked Roy if there was any particular reason behind the preference for these women folk, and he was happy to explain. “Illiterate mothers and grandmothers are humble and easy to teach,” he replies, “They have a vested interest in the village and have no desire to leave. Give a youth a piece of paper and he is off to the city to find a better job.” Roy elaborates that the Barefoot ideology compels them to choose people who are deeply rooted in a home village and will continue to work for its development rather than migrating to cities. •
In the near future, these engineers-in-training will build solar cookers that would help reduce pollution from wood and kerosene stoves
“Illiterate mothers and grandmothers are humble and easy to teach… They have a vested interest in the village and have no desire to leave.”
The women at Barefoot College are trained for six months in Tilonia and in this time they master the skills of fabricating, installing and maintaining solar-powered household lighting systems, which qualify them to become solar engineers. Urub Ismail, an Ethiopian woman, was rearing goats in the remote Somali village of Chichiga before she found herself in Tilonia, tinkering with capacitors, choke coil and six-pin connectors as part of a hands-on learning process. Like her collegemates, Urub is provided food, shelter and other basic amenities by the college and a monthly stipend for carrying out solar repair and maintenance duties. Today, she is the picture of confidence. “I will go back and help my community,” says this widow and mother of
– Bunker Roy Founder, Barefoot College
Skills acquired at the Barefoot College made possible this solar greenhouse in the north Indian region of Ladakh •
six. Urub’s village in Somalia has only a few houses with electricity connections. Solar panels are therefore expected to help light up many lives there in the future. The Barefoot College is a great centre for cross cultural exchange and diversity as it is home to people of so many nationalities. At the same time, this has often posed major challenges for the trainers who are not multilingual and for womenfolk who could only understand their local language. To find a language that is understood by all, a unique lingua franca of gestures, signs and broken English has been adopted. “Learning by doing” has long been the philosophy adopted by the college for training. Practical demonstrations, “hands-on” experience and regular repetition help trainees get familiar with terms, tools, equipment and components used in solar technology. With each passing day their level of
hesitancy decreases while confidence and technical dexterity increase. The programme thus breaks a critical myth associated with solar technology and learning: its many international graduates are proof that “paper qualifications” are not necessary for one to become a solar engineer. In accordance with prior agreements, upon completing their sixmonth-long training programme, these graduates return to their respective villages, solar electrify them and shoulder the responsibility of repair and maintenance for a minimum of five years. By requiring members of a trainee’s home village to commit to supporting her work in the long term, the college also develops the rural community’s sense of ownership and joint responsibility for the successful local outcome of the programme. To date, the Barefoot approach has reached poor remote rural villages in 25 countries in Africa, Asia and Latin America. More than 140 rural mothers and grandmothers who had never before left their villages prior to Tilonia have now gone home and solar electrified 9,118 remote rural houses in 21 African countries, becoming role models for their community in the process. As a result of solar electrifying their communities, these women have also managed to save 30,000 litres of kerosene per month from polluting the atmosphere. Closer to home, the Barefoot College has provided solar lighting solutions to 500 village clusters not only in India but also Bhutan, Afghanistan and Kazakhstan.
Some companies that have supplied equipment used in Barefoot College solar workshops: • Batteries: (maintenance-free tubular gel batteries) • Inverters: - • Assembling jig: 1 • Pool kits: • Miscellaneous other electronic components:
Best Green Developer 2010
The Edge Property Excellence Awards 2010
case studies
First Singapore campus hostel to get BCA Green Mark Mixed-use building integrates sustainable learning and living Smart design optimises energy use in sunny clime
MDIS Residences, the new administration and hostel block within the Management Development Institute of Singapore’s unicampus at Stirling Road, is the first hostel in the country to receive the BCA Green Mark award. The 14-storey block not only provides an inspiring learning environment but also ensures a comfortable living space for over 1,600 students. The overall spaces within this development are designed to integrate the new building with the existing campus. While careful to retain this sense of continuity, however, the architecture is resolutely forward-looking with sustainability features that incorporate natural ventilation and lighting, water conservation systems and an abundance of greenery to produce an environmentally friendly and energyefficient building. The floor plans of MDIS Resi-
dences are designed within a modular structural grid system for flexibility in planning. This enables different sizes and layouts of bedrooms and communal facilities to fit within the grid system, which helps to reduce overall construction cost and increase building efficiency. Various features work together to form a comfortable and sustainable learning and living environment for students. The building’s north-south orientation capitalises on natural ventilation while the four-storey high atrium lobby is designed so that open communal spaces receive ample cross ventilation. Air-conditioned spaces such as the offices, classrooms and 500-seat auditorium are recessed from the building outline to minimise exposure to direct sunlight and reduce heat gain. The elongated facade is lined
Project details
• Owner: • Architect: • Team director: • Quantity surveyor: • Civil & structural engineer: • Mechanical & electrical engineer: • Interior designer: • Landscape designer: • Acoustic and AV consultant: • Completion: • Awards: ,
The building design incorporates open spaces and ample natural ventilation
By Suvarna Beesetti
The energy-efficient MDIS Residences hostel, built at a cost of SGD80 million (US$64 million), is scheduled for completion this year
with landscaped terraces to cool the ambient atmosphere and also to serve as green relief for the students and staff. Hostel rooms are housed under two separated wings, each shading the other from direct sunlight. Low-emissivity double glazed windows are used for all hostel rooms and offices to allow a high transmission of light without excessive heat gain. Non-habitable spaces, such as staircases and M&E shafts, are positioned strategically at the east- and west-facing facades to act as buffer spaces that reduce heat gain in the rooms. The external walls are clad in aluminum panels, which are 100% recyclable and have high reflectivity of radiant energy with low emissivity, acting as a radiant thermal shield for the building. To improve the indoor air quality, partitions are built from eco-friendly drywall, low-VOC paint is applied for all walls and solvent-free polyurethane •
Big Apple gets its first solar EV charging station Modular charging station can be set up in a day Over US$200,000 in fuel savings over 25 years
by 24 photovoltaic panels on the roof, the 5.6kW station stores solar energy captured during the day in battery packs for 24/7, on-demand use. BE has two 19MW photovoltaic electricity generating plants in southern California that will supply electricity to more than 8,000 homes in the area. The company is also investing extensively in EV charging stations and various clean tech projects and services throughout the US and Asia.
Project details • Photovoltaic panels: , • Racking system: , • Batteries (97% recyclable): , • Inverters: , • Solar array frame: .. .
Brooklyn-based renewable energy company Beautiful Earth Group (BE) gave New York City its first solarpowered electric vehicle charging station in March. Designed and built by BE, the station is located in Brooklyn Bridge Park, a 34-hectare premiere sustainably-built and operated waterfront public park with spectacular views of the Manhattan skyline. The station will be used to charge the park’s electric service vehicles, leading to estimated savings of over US$200,000 in gasoline costs, and tens of thousands of dollars in electricity costs over the 25-year lifetime of the project. Traditional fossil-fuel park service vehicles would have emitted 530 tons of CO² over the same period. The solar-powered charging station is built from two upcycled, decommissioned steel shipping containers stacked on top of each other. Off-grid and powered entirely
epoxy flooring is used in the corridors. The building is installed with highly efficient air-conditioning equipment. Instead of ducted fan coil units, the 796 hostel rooms are served by chilled water wall-mounted fan coil units that ensure low-energy consumption by the air distribution equipment. The carpark and office areas are installed with T8 light fittings using high-frequency electronic ballasts. The mechanical ventilation fans and lighting in the communal toilets, on the other hand, are interlocked and controlled by strategically-placed motion sensors using microwave technology. Rainwater collected from the rooftop and fifth-storey landscape deck is stored in tanks to be used for watering landscaping vegetation. The roof trellis is also covered with 130m² of vacuum tube solar collectors that harness solar energy and high ambient temperature to generate 411kWh of hot water every day. Four sets of heat pumps are also installed as a secondary source to the solar vacuum tubes, forming a hybrid system. A centralised tank distributes the 64,000 litres of heated water to hostel showers each day, contributing to an estimated 612,000kWh in electrical energy saved every year.
The roof trellis incorporates vacuum tube solar collectors that generate 411kWh of hot water daily •
Built from two upcycled shipping containers, the station is modular and can be deconstructed, moved and reassembled in less than a day
people
Profiting from being clean Convinced that resource scarcity and energy efficiency would drive technological innovation in the 21st Century, Peter Grubstein founded an investment company in 2001 to build portfolio companies that address the environmental challenges of our time. NGEN Partners, LLC today manages a three-fund family with over US$500 million under management. He talks to Siaw Mei Li in an email interview on why the cleantech sector makes such great investments.
What led you to pioneer cleantech investment by founding NGEN Partners in 2001? What were some notable challenges you faced entering into what was then unchartered territory? On the other hand, did being a pioneer allow you to influence the growth of the industry in definitive and lasting ways? I am a value investor, with an operational/manufacturing background.
• Over 30 years experience as entrepreneur, venture and financial investor • Founder of NGEN Partners, LLC, which manages US$500 million • Member of the Board of Directors of Renewable Funding, eIQ Energy and Hycrete. • Brought Nobel Prize winner Alan J Heeger as venture partner to NGEN. • Avid outdoorsman
“It never ceased to amaze me that the most profitable companies were also the cleanest.”
,
GPA: Tell us what is generally understood as the “cleantech sector.” What are some distinctive characteristics of this sector in the Asia-Pacific region, specifically? Grubstein: The cleantech sector is inclusive of at least a dozen industries. They are: green building, efficient manufacturing, waste minimisation, recycling and materials reuse, environmental remediation, consumer applications, alternative energy, energy efficiency, energy storage, resource efficiency, pollution prevention, alternative materials and green IT. Successful implementation of each or some of these helps a company reduce overall operating expenses, potentially broadening its core revenues and thereby expanding profitability. Asia-Pacific is a high growth area. By instituting clean technologies into their respective processes, a manufacturing company will likely become more efficient and therefore more profitable. I view cleantech as an extension of lean manufacturing, which became popular with Toyota’s lean production principles and kanban. Kanban and cleantech are all about increasing yield, making a process more efficient. Increasing yield saves money by reducing waste and energy. The lean production process also incorporated the concept of local manufacturing geared around a central assembly point.
When I was working in the field, it never ceased to amaze me that the most profitable companies were also the cleanest – they utilised all their required resources better than their competitors. In the late 1990s, I strongly believed that the best way to reduce energy costs was to actually reduce consumption: improving yield and increasing productivity. In other words, true alternative energy is the energy that is not consumed to produce a product. That led to our work in pollution abatement, alternative energy, energy IT and green building: at a time of capital constraint and very little competition. We were one of a handful of investors concerned with cleantech. Capital constraints at both the Limited Partnership level and General Partner-
ship level made it very difficult for a good company to get proper financing, and we therefore spent a good bit of time interesting investors in the sector. At the same time, there was a dearth of experienced managers, which required a huge amount of board time building and coaching teams to maturity. The
“True alternative energy is the energy that is not consumed to produce a product.” upside of being a pioneer is that we built a strong investor base and a coterie of managers that we can now draw upon for future deals. Cleantech has evolved somewhat analogous to the Web. We are now in •
either the 2.0 or 3.0 stages of evolution, whereby those that have survived are prospering. When we started, there were about 10 firms investing in the sector; in the boom, it expanded to over 130 venture firms, and now we are back to a small group. What are some key factors that have contributed to NGEN’s industry leadership? One word: team. We have built an excellent group of investment managers with more than 25 years of experience in the industry, and for most of us, almost 10 years of working together successfully. We have had very little turnover in 10 years. How much money has NGEN invested in cleantech to date, and in which sectors, mainly? We have about US$500 million under management in three funds. Our most successful areas of investing are and have been in energy finance (enabling alternative energy and energy efficiency projects); and energy IT (including the software to enable recycling and reuse of materials); and alternative energy (various parts of the solar value chain as well as mobile efficiency). Your website indicates that NGEN is now focusing on working with partners based in North America, albeit with a regional or global reach. Do you foresee significant changes to this focus in the near future? We continue to be interested in North America, as it is still a largely untapped market. Nevertheless, we are opportunistic, and just closed a transaction that was largely European focused with only a small presence in the US. I am excited about the prospects of broadening the market for our portfolio companies’ products, and we have worked extensively and successfully in Asia on expanding their manufacturing and consumption footprints. Which areas of cleantech in Asia would you say are the ones to watch, and why? Asia has the same needs as North America. We would be very actively looking at the entire alternative energy area, including solar, wind, hydrokinet •
ics and efficiency. In addition, working on energy finance would also be a large market. Which governments in Asia have you identified as being progressive in creating a green economy? And are these the countries you would do business in? The obvious answer is China, where there are large incentives for US companies to manufacture and distribute for the Chinese market. I am afraid I am not as knowledgeable as I should be on the various jurisdictions, and which are most progressive. To us at NGEN, the most important thing is having laws that support the validity of a contract and do not restrict trade and cash flow. We are fearful of investing because of regulatory support, as it can change. An example of that is the FiT (feed-in tariffs) in Spain and Germany. The FiTs supported enormous growth which also contracted once the FiTs were reduced.
“Cleantech has evolved somewhat analogous to the Web. We are now in either the 2.0 or 3.0 evolution, whereby those that have survived are prospering.” How do cleantech investors typically size up a region or sector and read the future of the fields they might invest in? We are research focused. The most important thing for us is to identify an area. Internally, we regularly review all 13 areas (as listed in the first question), and look for what we call inflection points: we look at what we think the market will look like in 18 months. This is usually a deep vertical dive. Once we have an idea for a vertical, we then take a broad horizontal perspective: looking at all the various ways to maximise and sustain gross margin. Once we have found an attractive horizontal, we then search for the best of breed companies utilising the depth of research that we have created. Once we have looked at companies in depth, we have a good
feel for the size and potential of a market and sector. How can companies in this region better position themselves to attract investors? Not sure. I would say the most important attribute will be for companies to choose sectors that are relatively capital light, i.e. that they can be operated with an efficient use of working capital and capital equipment. You work closely with the Materials Science Department at UC Santa Barbara. In your view, why is it important to invest in academics and research, and how might this be translated into best practices applicable to Asia’s institutions of research and higher learning? Investing in research is the key to longterm success. However, this investment is not coming from venture capital or private equity companies; rather, research should come from corporations or government entities that support specific projects that are geared to providing a long-term commercial product. The US government labs have been extraordinarily helpful in the development of good research. What are some of the things you’re passionate about outside of your work? I am an avid environmentalist. I started NGEN thinking that we had a unique opportunity to make money working on the environment. When not working at NGEN, I support efforts for habitat conservation, education and research of waterfowl. From a sports perspective, I love doing anything outdoors. I am a skier, hiker and outdoorsman. I travel to underdeveloped parts of the world. Historically, I have spent a great deal of time looking at the interface between man and his environment. I greatly enjoy anthropology and understanding how man has adapted to nature. Peter Grubstein will deliver the opening address at the Clean Technology Investment World Asia 2011 in Singapore next month. Green Purchasing Asia is an official media partner for the conference and exhibition organised by Terrapinn.
people
China’s solar king: Look at the basics first Huang Ming, nicknamed “The Solar King” for his personal crusade against the use of fossil fuel in China, helped framed the country’s renewable energy law five years ago that paved the way for RE’s meteoric rise. He was in Malaysia recently to sign an agreement for his solar products to be marketed here. Stephen Ng caught up with him to see what makes him tick.
• Petroleum engineer • Known in China as “The Solar King” because of his crusade against use of fossil fuel • Pioneer of China’s clean energy industry • In May 2006, Huang was the first Chinese entrepreneur to be invited to speak at the 14th UN Conference on Sustainable Development • In March 2007, Huang received an award from the World Wide Fund for Nature for his contribution towards the renewable energy industry in China • His stake is worth around £200m, according to the Forbes 2008 China rich list
It was a well-founded fear over what the future holds for his two-year-old daughter that drove a young researcher at a petroleum institute in China to explore cleaner sources of energy. In 1987, he read a book about solar energy and using the processes outlined in it, he built a solar water heater and gave it to a relative as a wedding gift. The idea caught on and soon, more and more people wanted one. Soon, Huang Ming became so good at it that he built it into a business. Himin Solar Corporation Limited is today China’s largest solar enterprise, and Huang is now one of China’s wealthiest entrepreneurs. The company is reputedly the largest solar water heaters and vacuum tubes manufacturer in the world. Founder and chairman Huang says that when he first started his company in 1995, 99% of the Chinese people were not even aware of solar energy. “Today, China is the world’s largest producer and user of solar collectors with an output of 1.45 billion square metres.” Himin Solar Corp alone has an output of three million square metres annually. “This is equivalent to saving over 46 million tons of coal, thereby lowering a corresponding amount of 40 million tons of emission,” he says. Huang is popularly known as the pioneer of China’s clean energy industry, and was involved in the drafting of China’s Law on Renewable Energy in 2006 when he was a deputy with the 10th National People’s Congress (NPC). “The bill laid a legal foundation for China’s strategy to tackle the energy crisis,” he says. Himin Solar Corp was also involved in conceptualising and developing the Solar Valley, an area of 260 square kilometres located in Dezhou City, in the province of Shandong. It
Huang Ming
“My first deal, a solar water heater that could provide hot water for 100 people, earned me 50,000 yuan.” is an ongoing project that integrates commerce, industry, academia, residences and a research and development centre on solar energy, and is in itself a tourist destination. GPA: Can you tell us about the Solar Valley, which has once been described as the “cleantech version of Silicon Valley” in the US? Huang: The Solar Valley is a model that showcases the successful adoption of our micro-emission strategy. With this success, Himin Solar has started turning the wheels of revolution in promoting its micro-emission strategy to the industrial, agricultural, housing and transportation sectors. For instance, we have built the
world’s largest solar office known as the Solar Bird Nest. There is also the Utopia Garden, which is the world’s most energy-efficient community. We also have the world’s first low-carbon centre solar shells which are a model for future city construction and operation. The concept of micro-emission is to enable the replication of the future city template which has been perfected by Himin Solar throughout the world to solve the environment and energy crisis we are facing now. Himin Solar has invested heavily in turning this city into the world’s largest industrial centre for academia and research. Each year, more than 500 new technologies in solar energy are created in the Solar Valley. It has also been picked as the site for the International Solar Technology Academy of Science. As this is the only national solar thermal utilisation centre, it has attracted the attention of global media and politicians, including US President Barack Obama, who, during his recent State of the Union •
Himin Solar Corp recently appointed Malaysian company TS Solar Energy Sdn Bhd to exclusively market and distribute its products in Malaysia. Huang is seen here exchanging agreement with TS Solar Energy executive director Sam Oh. Looking on are (from left) Oh Chiew Ho (chairman of Ann Yak Siong Group), Tan Kai Hee (secretary general of the Malaysian-China Friendship Association), Somasundram Ramasamy (Senior Under Secretary, Energy Sector of the Ministry of Energy, Green Technology and Water) and Datuk David Kong.
address to the Congress, said China has the world’s largest private solar energy research institution located in the Solar Valley. The city is attracting an average of 10,000 visitors and tourists every day from all over the world. Over one hundred city mayors from both China and other parts of the world have visited this “future” city. Only 1% of the energy consumed in the entire city is from conventional energy sources. The rest is mainly from solar energy, which powers: • 65% of the energy used for cooling or heating • 99% of auto-lighting • 20% of indoor lighting How big has clean technology grown in China since 2006 when the Law on Renewable Energy came into effect? Today, China is the world’s largest user of solar energy – even bigger than the United States at this juncture. There are no figures per se, but a rough estimate is that it could be as high as 6% of China’s entire gross domestic product (GDP). This was a result of the Law on Renewable Energy which was passed by the National People’s Congress. In Malaysia, the Renewable Energy Act which was passed recently will undoubtedly pave the way for a bigger market for green technology. •
99% The percentage of energy consumed in Solar Valley generated by renewables
What inspired you to draft the Renewable Energy Bill? It goes back to 1984 when my daughter was only two years old. As a researcher at a petroleum institute in Dezhou City, I knew that fossil fuel supply was depleting and if nothing was done, my daughter’s generation would suffer a deep energy crisis. I also saw a “black” future for her, because of the black energy (petroleum and coal) that was being used. In 1987, I read a book about solar energy and made my first solar water heater by copying the process outlined in the book and gave it to a relative as a wedding gift. It was successful, and soon, relatives and friends placed orders with me. One day, the director of a stateowned factory heard about my solar water heater. He placed an order for a unit that could enable 100 people to shower using solar-heated water. This was my first deal, which earned me 50,000 yuan.
In 1995, I quit my job as a petroleum engineer and started a company called Xinxing, which became Himin Solar a year later. Himin became the domestic leader (in solar water heaters) in less than three years. In 2003, we stopped producing cheap, low capacity heaters, and turned to high-quality units, which fetched as high as 20,000 yuan for a luxury home. Within ten years, I turned this obscure factory into the largest solar water heater manufacturer in the world. Although I was successful as a businessman, I felt it was not good enough to make a significant impact. I wanted to do more for China and the rest of the world. Therefore, I decided to work on the bill which was passed by the National People’s Congress and became law on January 1st, 2006. What are your latest green initiatives in China? Last year, Himin Solar constructed Asia’s first large-megawatt solar thermal power plant in Beijing. We are now building the world’s largest Fresnel solar thermal power plant in Dezhou City. “G (green) Energy Substitute” is our strategy to promote the use of renewable energy in industry, agriculture, building development, and everyday living. During the last NPC plenary session, I introduced a motion to develop solar-powered baths in rural areas as it had been reported that some 100 million farmers do not have direct access to proper bathing facilities. Recently, we won a bid to build China’s first solar thermal power plant in Ordos of Inner Mongolia. This will be a 50MW parabolic trough power plant using our own innovations as two key components of the thermal plant – the parabolic trough evacuated tube and the coated steel tubes. Finally, what is your personal philosophy on renewable energy? Technology aside, the first priority is for city planners to look at ways to build cities that are greener. Trees, for example, play a very significant role in bringing down the temperatures of cities. Only after the basics are looked into should we then look at new solutions for energy.
editorial
Banning toxic trade in a changing Asian market Asia becoming toxic electronic waste dumpsite for the West
Urban mining recovers valuable waste metals for industrial reuse
The minerals and precious metals found in our waste stream, ranging from copper and gold, to iron, nickel and zinc, can and should be ethically extracted and reused
As the urbanisation of emerging Asian countries continues to reach new heights in the 21st century, the demand for finite materials also skyrockets. Everything from precious metals used in electronics to simple building materials such as wood and concrete are needed – and disposed of – at an alarming rate. Increased sanctions and better awareness are necessary so that proper disposal of e-waste and the toxins within these products can be achieved. A new push for urban mining – the process of reclaiming compounds and elements from products, buildings and waste – is spreading fast around the world. With mineral prices at an all-time high, now is a better time than ever to get mining. China’s demand for copper will grow 8 to 10% just this year alone. India, a country with one-third of its residents living in urban areas, continues its rapid industrialised
growth at an unprecedented pace. In Japan, urban mining is booming following China’s decision to limit exports of rare earth minerals. Yet, if we are not careful, waste streams from these and other nations can have potentially devastating worldwide results. As a result of careless tossing of electronics in the US, toxic trading has become a rampant issue throughout Asia. Potentially toxic e-waste from the United States is often plucked from landfills and discreetly shipped overseas, ending up in Chinese fields and streams or Indian recycling yards. These unconscionable actions must be stopped, and that is where the Basel Action Network (BAN) comes in. BAN is the world’s foremost international toxic trade policy advocacy group, and its experience in researching and investigating toxic trade is second to none. In particular,
John Shegerian is chairman and CEO of Electronic Recyclers International® (ERI), one of the largest e-waste recyclers in North America.
BAN’s E-Waste Stewardship Project aims to change the tide of toxic trade in developing Asian nations and beyond. The programme works to ensure that exported hazardous electronic waste is exposed and eliminated by BAN, and replaced with producer responsibility and green design programmes and legislation. Electronic Recyclers International (ERI) stands by BAN’s mission to end toxic trade, and the company is in the certification process to become an e-Steward, extending the company’s commitment to ending worldwide toxic trade. We have the technology at ERI to recycle electronics responsibly, efficiently and effectively. We have the opportunity to set an example for others to follow. We cannot wait for laws to be enacted to make appropriate changes in e-waste disposal. Companies like ERI must step up to the plate and act now. Urban mining is not only a rising trend in e-waste, it is also a necessity for healthy prosperity in the future. Already, South Korea’s LS-Nikko, one of the largest copper smelters in the world, has invested in ERI’s urban mining programme. In turn, LS-Nikko gets enormous amounts of copper harvested from ERI’s recycling facilities. Likewise, the world’s leading aluminum producer, Alcoa, recently invested in ERI, enhancing the role aluminum plays in making electronics more sustainable. Alcoa recently became an enterprise member of the e-Stewards Certification Programme. As we look to the future of leading nations in Asia, we must exercise environmental caution in our commitment to growth around the globe. Only then can we realise a resourceefficient global market that ends the waste pile-up. •
editorial
Secret to building a new market Work with the public’s evolving needs, perceptions and expectations Customise communications – aim for where target markets gather
By Shel Horowitz
If you’ve been struggling to build a green business, or to offer green products or services through an existing business, this column might just make your day. I am going to share how you can determine whether you will have a viable market for your offering. Let’s see how this works out with a case study. Problem/desire Thousands of gallons of water are wasted flushing small amounts of urine. An entrepreneur would like to help people save this water. Possible solutions There are several ways to fix this, such as composting toilets, greywater recycling (water used for flushing has already been used once in a sink, dishwasher, shower, bath, or washing machine), and European-style two-way toilet switches that allow you to select a large flow for solids or a smaller flow for liquids. But this entrepreneur chose a different route: Go Flushless, an enzyme compound that eliminates the odour and stain, allowing the urine to remain in the bowl with no ill effects. Advantages Most of the other solutions involve extensive hardware modifications, and that’s expensive. Go Flushless, by comparison, is cheap and easy to implement (a couple of squirts from a standard hand spray pump such as you’d use for window cleaning detergent). Possible markets Green consumers who care about saving water are an obvious market– and because of the low entry price point, the product appeals not only to •
homeowners but also to renters. But there are several other markets too. Large consumers of water like sports stadiums, concert halls, schools, and transport hubs have big reasons to save. However, to reach this market, additional equipment is needed to control the flush schedule remotely, so this would be a backburner market to pursue once technology and social expectations around flushing have shifted more significantly.
Ask yourself five simple questions: • What problem can you solve, or what desire can you satisfy? • How is your method different from (or better) than existing solutions? • Who needs this problem solved badly enough that they’re willing to pay • How do you reach those people? • How do you convince them to buy? There’s another huge market that’s much easier to reach: homeowners who live with septic systems and private water supplies (their own or a neighbourhood well). Unlike the owners of large public bathrooms, this group has no technological or sociological barriers in choosing Go Flushless and has a strong interest in conserving water so as to extend the lifespan and reduce the maintainance for septic tank systems. Finally, there is another large market: people who live in drought prone areas and where the culture has
Shel Horowitz is the primary author of Guerilla Marketing Goes Green. He can be reached at shel@ greenandprofitable.com
shifted in favour of flushing less–as it has in California, for example. Those folks are already letting the yellow stuff sit, and they would welcome a simple solution to the problem of odours and stains. How to reach these markets These four different markets congregate at different places. For green consumers, exhibiting at a green festival makes sense. In fact, I met Go Flushless company owners Bill and Jane Monetti at a green festival where I was speaking and they were exhibiting–and selling quite a bit of their products. Articles in trade magazines would effectively reach industrial users. Homeowners with septic systems might best be reached through direct mail or even in-person sales calls. And people in drought areas can be reached simply enough by massmarket media such as radio, TV, and print newspapers. Although the message points would be different, it’s important to note that the marketing techniques can reach each target group. With different audience-specific messages, the Monettis can use the social media, blogs, traditional media publicity, public speaking, product demonstrations, and their own website. Getting the sale For green homeowners and tenants, saving water is enough of a reason. For the industrial bathroom owners and the “well and septic” crowd, a purely economic argument will work. And for those already not flushing because of drought, an appeal based on a clean, germ-free house and a toilet that is once-again easy to clean should close the sale.
Taking Taiwan’s green consumption to the private sector Government support for Green Mark businesses is showing results Stronger incentives needed to increase green popular buy-in
Dr Ning Yu is president of the Environment and Development Foundation and chairman of Taiwan Green Purchasing Alliance.
By Ning Yu In my previous column, I described how the Taiwanese government had achieved extremely encouraging results in raising the public sector green procurement rate since the Green Mark ecolabelling programme was initiated in late 1993. Now, after 18 years of promotion, the Green Mark has grown to become a reputable ecolabelling programme both in Taiwan and internationally, with 112 product categories and over 6,000 Green Mark-certified products at the end of 2010. In addition to the Green Mark Programme, the government also launched ecolabelling programmes for energy saving, water conservation and green construction products to encourage the production of environmentally-friendly products and services. Having met and exceeded its goals for greening the public sector, the obvious next step for the Taiwanese government was to build on that foundation and target private sector participation. In recent years, the following initiatives were implemented through joint efforts among government, businesses and civil societies: 1. Encouraging retailer marketing of Green Mark products A recent market survey indicated that about 48% of fast-circulating consumer products are distributed through modern distribution/retailing channels. In order to encourage consumers to buy Green Mark and other green products, the Taiwan Environmental Protection Administration (TEPA) initiated the Green Store Scheme in 2007. Participating retail stores are required to offer for sale a designated amount of green products and to conduct environmental awareness education and training activities
for their employees. A total of 10,377 Green Stores have participated in this scheme since it was launched four years ago and TEPA presents the annual Green Marketing Award to participating stores with outstanding performance. 2. Voluntary green purchasing commitments from companies With the assistance of local governments, TEPA encourages companies and organisations to implement green procurement by signing voluntary green procurement agreements with
10,377 Green Stores Stores required to sell green products and conduct green awareness activities
TEPA and reporting the amount of such purchases to an online database administered by TEPA. In 2009, nearly 600 private enterprises participated in this scheme and declared a total amount of NT$2.05 billion (US$71 million) in green procurement. 3. Online marketing of eco-friendly products In order to expand distribution and marketing channels for Green Mark products, TEPA established an online store for green products (www. buygreentw.net). Through this site, companies and individual consumers can buy Green Mark products anytime and anywhere. 4. Publicity campaign in the media Through the production of several short promotional films and the estab-
lishment of the Green Living Information Website (www.greenliving.epa. gov.tw), TEPA has harnessed multichannel communications to promote green consumption among consumers as well as corporations. 5. Green hotels The Green Mark hotel category has been introduced under the Green Mark system. Qualified hotels have to meet all requirements on existing environmental and energy conservation measures, and to adopt new initiatives such as reducing the supply of disposable products. 6. Subsidies for energy- and watersaving products The Ministry of Economic Affairs in Taiwan provides financial incentives, such as a subsidy of about US$60 for purchases of products bearing energy-saving or water-saving labels. This kind of subsidy is considered the most effective as it directly reduces consumers’ costs in green products. However, it is only offered for a fixed period due to limited funds. Based on Taiwan’s experience, the lack of green purchasing by the private sector is mostly due to inadequate incentives. In addition to improving education and awareness among individual consumers and private enterprises, current government rules and regulations could be revised to provide stronger incentives in support of corporate green procurement. While previous achievements testify to the potential of government green procurement, we now need to act on our understanding of consumer price sensitivity and explore strategies that may differ from those that worked for the public sector. •
editorial
Is there such a thing as a green product? “Greenness” should cover a product’s entire life cycle Implementing green criteria innovatively benefits the bottom line
The green product is today’s buzzword. Albeit generally limited to a boutique market, the interest in and consumption and affordability of green products are growing, especially in urban regions where awareness is high. Unfortunately, there is no universal definition of a green product. Sometimes the term “green” is selfdefined by the producer but in most cases, ecolabels are used as a basis. In either case, guiding principles such as “do no harm”, “compliance”, or “leanness in use of resources” are applied to accomplish “green” ways of making, packaging, distributing and using the product. Greening involves not only the production stage, but extends
across the life cycle of a product. This consideration makes the overall definition of “green” very difficult. For instance, a product may be greener in the making and “not so green” when it comes to its usage and disposal. Scoping of the life cycle or the “product impact zone” determines the overall “greenness” of the product. Is a plastic bag greener than a paper bag? When a product is made from recycled materials, does it necessarily mean it is better for the environment than a product made from virgin material? These are difficult questions to answer. Sometimes, greenness is defined upon a single criterion. For example, a product carrying the Energy Star label is more energy-efficient compared to one that does not. More energy
Core criteria for greenness of a product
•
Dr Prasad Modak is chairman of the Green Purchasing Network of India. He can be reached at pmodak@vsnl.com
efficiency can mean less emissions. But “greenness” cannot be judged on a single criterion. One must look at multiple criteria or attributes such as biodegradability, toxicity, energy, water, wastes/emissions, and consumer and worker safety, etc. Today, with regard to wastes/emissions criteria, many manufacturers are reporting greenhouse gas (GHG) emissions, leading to the recognition of carbonsensitive, low carbon footprint (CF) products. Then again, a low CF product may not be green, as it could still pose concerns in terms of biodegradability or toxicity. Multi-attribute based green product certification requires a life cycle assessment (LCA). LCAs are difficult to perform and even more difficult to communicate. That makes the operational definition of green an arduous task. Ecolabels are therefore often used to assess the greenness of the product. A 2009 survey by the World Resources Institute, Duke University and the green analyst Big Room Inc, pegged a mindboggling 340 ecolabels worldwide – each with its own nuances in devising criteria. In fact, one could be forgiven for asking if this is too much of a good thing. So is there a better way to devise criteria for green product? Something that can be commonly understood? Something that can serve as a core and could be customised/ deepened for a specific product? Having analysed the
structures of several ecolabels used to identify green products, I developed a common framework for “greenness” based on five core criteria (see illustration on previous page). These core criteria are structured in the form of a “graduation”, with forms of compliance ranging from the minimum to the most desirable elements of responsible behaviour. Entrenching leanness and competitiveness in the criteria is very important. In my experience, I’ve found that “greening” a product can actually benefit the
information
bottom line of the business if phaseouts, substitution and process/material changes, and product design/packaging are done innovatively. In fact, efforts towards greening provide opportunities for optimisation and ultimately make the product more competitive. Criteria based on continual improvement is important in that it underscores consistency, management commitment, surveillance and record keeping, indicating implicitly that green products should be manufactured under environmental, health and
safety management systems. These initiatives should not just be ad hoc or one-off interventions. Finally, there is no such thing as an “absolute green”. There will always be shades of green, even across a product category. The idea of greenness is relative, mainly to give an opportunity for the consumer to compare products and make wiser choices. The better the understanding and preferences of the consumer in this direction, the greater the push and pressure on manufacturers to go greener.
India upbeat on renewables Wind potential in Orissa, biomass potential in Madhya Pradesh largely undeveloped
A new World Bank report says developing indigenous renewable energy sources which have low marginal costs of generation are more economically viable in the long run. Renewables can play an important role in increasing India’s energy security by diversifying supply, reducing import dependence and mitigating fuel price volatility. The report Unleashing the Potential of Renewable Energy in India is a diagnosis, assessing the feasibility of developing Renewable Energy (RE) in India. The report is based on data from nearly 180 wind, biomass, and small hydropower projects in 20 states, as well as information from the Ministry of New and Renewable Energy (MNRE) and the Central Electricity Regulatory Commission (CERC). India’s electricity demand is expected to grow at an average annual rate of 7.4% in the next 25 years. Generation capacity will have to increase fivefold to keep pace with demand growth. The Integrated Energy Policy Report, 2006, also estimates that nearly three-fourths of the installed capacity will be thermal-based (with
Bank to work with government towards reaching 40GW target by 2022
Businesses such as this rice hulling outfit now have reliable biomass-fuelled electricity via Saran Renewable Energy
coal and gas as feedstock). The gap between supply and demand is likely to increase unless adequate measures are taken to bring in new generation capacity and improve operational efficiency in the distribution and management of power utilities. Today, more than three-fourths of India’s electricity production depends on coal and natural gas. At current usage levels, India’s coal reserves are projected to run out in 45 years. India already imports 10% of its coal for electricity generation, and the figure is projected to increase to 16% by 2011. With about 150GW of known
resource potential – of which only about 10% has been developed – renewable energy can be an important part of the solution to India’s energy shortage, says the report. “Renewable energy is seen as the next big technology industry, with the potential to transform the trillion dollar energy industry across the world. China has seized this initiative as it strives to become a world leader in manufacturing renewable energy equipment. Investing in renewable energy would enable India to develop globally competitive industries and technologies that can provide new •
Economic and financial potential of renewable Renewable energy development can also be an important tool for regional economic development within India, the report suggests. Himachal Pradesh, Jammu and Kashmir and Uttarakhand have 65% of India’s small hydropower resources. Much of the economically attractive wind potential in Orissa or the biomass potential in Madhya Pradesh also lies largely undeveloped. Developing renewable energy in these states can provide secure electricity supply to foster domestic industrial development, attract new investments, create employment, and generate additional state income by allowing the states to sell renewable energy trading certificates to other states. The report suggests that about 3GW of renewable energy – all from small hydropower is economically feasible, when the avoided cost of coalbased generation of Rs 3.08/kWh is considered. About 59GW of renewable energy in wind, biomass, and small hydropower is available at less than Rs 5/kWh. The entire cumulative capacity of 68GW in these three technologies can be harnessed at less than Rs 6/kWh. About 62GW – 90% of cumulative renewable capacity in wind, biomass, and small hydropower – is economically feasible when the environmental premiums on coal are brought into consideration. Like coal, gas and oil have witnessed considerable price volatility in recent years. Renewables are the only free hedging mechanism against price volatility of fossil fuels. The riskadjusted cost of renewable energy is lower than that of fossil based fuels, and their use enhances the price certainty of the portfolio and increases energy security, it says. Small hydropower – one of the least expensive and most attractive forms of renewable energy – lies largely untapped. It is the most economically viable form of renewable technology, with an average economic cost of Rs 3.56/kWh followed by biomass-based generation at Rs 4.6/ •
opportunities for growth,” said Inger Andersen, vice-president, Sustainable Development Network, World Bank.
In Bihar, India, businesses plagued by frequent blackouts turn to electricity generated from biomass at a local gasifier plant
kWh and Rs 4.9/kWh for wind-based generation. In fact, the generation costs of small hydropower are comparable with thermal generation sources, and the generation costs of biomass are comparable to those of wind. This resource is the most attractive in Andhra Pradesh, Haryana, Himachal Pradesh, Punjab, and Uttaranchal. “India needs to apply multipronged solutions to achieve the massive additions in generation capacity to meet the demands of its fast-growing economy. Renewable energy is one such solution,
To add 40GW by 2022, India has to double its wind capacity, quadruple its small hydropower, fully realise cogeneration capacity, and increase biomass realisation by a factor of five to six. particularly in light of its economic feasibility. The entire renewable potential including solar is less expensive than diesel, where the existing 20GW of diesel based installed capacity points to innovative possibilities of scaling up renewables in a big way,” said N. Roberto Zagha, World Bank country director in India. Looking forward Realising the need to bridge this gap, the government has set an ambitious
target of installing at least 40GW of additional capacity of renewables in the next 10 years. To add 40GW by 2022, India will not only have to meet ambitious targets of National Solar Mission, double its wind capacity, quadruple its small hydropower power capacity, fully realise co-generation capacity, and increase biomass realisation by a factor of five to six. These ambitious targets have made creation of an enabling environment for renewable energy development particularly urgent and topical, the report adds. “India has, no doubt, made tremendous strides in establishing overarching policy framework and institutions to bring renewable in the mainstream of energy mix. The World Bank is looking forward to partner the government to achieve its ambitious target of 40GW of renewable energy development,” said John Henry Stein, sector director, Sustainable Development Network. However, significant financial and regulatory barriers to renewable energy development remain, the report says. Projects are held back by the large number of clearances required during the development cycle. The biomass sector is paralysed by spiraling fuel costs. The report suggests single window clearance for all renewable projects, promoting innovative approaches, a competitive bidding process, and providing long-term funding options for producers. This report summary is sourced from the World Bank. More information on the bank’s work in India is available at www.worldbank.org.in
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It says it’s green, but is it legit? Unbacked green claims could be perceived as greenwashing Green certification through trusted organisations a must
By Siaw Mei Li
As environmental awareness grows among consumers, more brands are seeking the benefits of jumping onto the ecolabelling bandwagon. Ecolabels, also known as green labels, are official symbols of a brand’s commitment to business practices that minimise negative impact on the environment. From the familiar Dolphin-safe labels on tuna cans or the Energy Star on our computer screens at boot-up to the official floral-shaped EU Ecolabel and the USDA’s Organic certification mark, ecolabels are not only myriad in purpose but also proliferating rapidly as an increasingly educated public demands greater levels of corporate accountability from the brands they patronise. One estimate places the current number of ecolabels in the industry at over 300. In the midst of this trend towards sustainable living, however, there has also been a rise in
“greenwashing”, whereby marketers make unsupported or poorly verified claims of environmental responsibility to enhance a product or service’s appeal to eco-conscious consumers. In some cases, companies create their own ecolabels proclaiming environmental virtues that are not backed by third-party verification. As a result, consumers seeking to make genuinely responsible purchases often lack confidence that a product lives up to the claims on its packaging. Today’s shopper is increasingly overwhelmed by the range of environmental claims to be found on store shelves. In 2010, a survey of 1,022 Americans by EnviroMedia Social Marketing found that 65% of respondents believed having just one environmental label would increase their confidence about buying green. Meanwhile, the company works with the University of Oregon’s School of Journalism and
The first ecolabel Germany’s Blue Angel is the world’s first and oldest environment-related label for products and services. Created in 1978, it is awarded by an independent jury to companies as a form of recognition for environmentally responsible business practice. These companies are then free to use the label to distinguish and market their products to customers. Amidst the introduction of so many new green labels, the Blue Angel remains trusted and authoritative because of the high standards and specificity of its endorsement. This is reflected in the three main elements of every Blue Angel ecolabel: 1. The United Nations is symbolised by a blue ring with a laurel wreath and a blue figure with outstretched arms in the middle. 2. Surrounding text on the blue ring specifies the main environmental properties of the product bearing the label, e.g. energy-saving or lownoise. 3. The bottom portion of the logo indicates one of the four different Blue Angel protection goals applicable to the product: protects environment and health; protects climate; protects water; or protects resources. (This sample, the organisation’s general logo, states the overall goal of protecting humans and the environment.)
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Single-attribute labels vs multiattribute labels Ecolabels generally fall into one of two categories. The first, singleattribute labels, address just one key aspect of a product that is of high concern to most buyers, such as responsible forest management, packaging recyclability or sustainable fishing practices. The second, multi-attribute labels, tend to be more comprehensive and considers a product’s environmental impact at various points in its life cycle. Read more on this in topic in Prasad Modak’s editorial “Is there such a thing as a green product?” on page 50
Communication to run the Greenwashing Index, a website designed to help consumers navigate and assess ecomarketing claims more shrewdly and to hold businesses accountable for their green marketing claims. While most people are familiar with “consumer-facing” ecolabels such as those identifying fair trade coffee, organic produce and sustainable seafood, there are also marks of certification generally not seen in the retail market, which are used chiefly in the business-to-business market to help manufacturers maintain environmental accountability in their supply chain. In the UK, Continental Clothing, CEMEX and Capita are some companies bearing the Carbon Reduction Label who help not only consumers but also other companies to reduce their carbon footprint by supplying sustainably produced raw materials and business solutions. Business owners face tremendous pressure to make informed and accurate green procurement decisions so that they stay accountable not only to shareholders and customers, but also to an increasingly vigilant community of consumer watchdogs and activists. Aware that ecolabel overload can be as daunting for business buyers as for individual consumers, chemical company BASF recently launched the SELECT ™ Eco-Label Manager application to help its customers and stakeholders make environmentally preferable product selections.
As environmental watchdogs and other NGOs play their part to blow the whistle on companies that use ecolabels irresponsibly, more and more corporations have proactively opted to work with the relevant authorities to conduct audits, improve their processes, and earn their green credentials legitimately. Under the Responsible Asia Forestry and Trade (RAFT) programme funded by the US Agency for International Development (USAID), timber concessionaires in Indonesia cooperate with leading international conservationists from The Nature Conservancy to enhance forest inventory efforts, safeguard the local ecological environment and negotiate fair partnerships with local communities. This in turn helps the concessionaires to get forests and products properly certified according to well-regarded international standards such as those of the Forest Stewardship Council (FSC). UK-based Carbon Trust is another organisation that has successfully helped companies to provide more ecologically conscionable purchase options to end-users. If a consumer wants to support brands working with the Carbon Trust to reduce carbon emissions, save energy and promote lowcarbon technologies, she just needs to look for packaging with the footprintshaped logo and the words: “Reducing/working with the Carbon Trust.” According to an October 2010 report by the Centre for Retail Research, UK consumer spending on products bearing the Carbon Reduction label has reached an estimated milestone figure of £2 billion (US$3.27 billion) a year. At a time when ecolabels have become de rigueur, sometimes to the point of being merely fashionable, the long-term advantage lies with business owners who pursue lasting gains by seeking out reliable ecolabelling certification partners and going the distance to genuinely green the supply chain and the entire life cycle of their products. This is the first in a series of monthly articles on various kinds of ecolabels, the issues and challenges of ecolabelling, and how doing so correctly can be good for business.
Examples of multi-attribute ecolables
Cradle to Cradle® certification is a multi-attribute ecolabel that evaluates “a product’s safety to humans and the environment and design for future life cycles.” The materials and manufacturing practices of every product are assessed in five categories: material health, material reutilisation, renewable energy use, water stewardship and social responsibility.
The Eco Mark programme is undertaken by the Japan Environment Association. Certification criteria for every product category include the environmental impact of the product throughout its life stages, i.e. resource extraction, manufacture, distribution, use, disposal and recycling.
Taiwan’s Green Mark certification process takes life cycle considerations into account when evaluating a product for environmental impact. It is awarded in three tiers – primary, secondary and tertiary, with certification requirements being most stringent for the primary tier.
The Singapore Green Labelling Scheme (SGLS) endorses consumer products and services that “have less undesirable effects” on the environment. Certification criteria are specified by product category and generally multi-attribute in scope, but do not necessarily cover the product’s entire life cycle.
The Carbon Reduction Label indicates cooperation with The Carbon Trust to reduce, over two years, a product’s impact on the environment. The target is expressed as the reduced volume of greenhouse gases (symbolised by CO) emitted over the improved product’s life cycle and this is related to consumption units such as a serving, a pack or a wash.
More on ecolabelling and green marketing in this issue: “Taking Taiwan’s green consumption to the private sector” by Ning Yu on page 49
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Carbon reduction projects come under scrutiny
How CDM fits into carbon trading In 2008, the world carbon credit market was reported to be worth US$280 billion and is predicted to grow by US$170 billion in 2010. Carbon markets are a component of national and international attempts to mitigate greenhouse gases (GHGs) emissions through emission caps, the trading of carbon credits, or a combination of the two. The largest of the market-based mechanisms to promote the reduction of emissions at the lowest cost is the United Nations’ Clean Development Mechanism (CDM), one of three mechanisms under the Kyoto Protocol through which developed nations are allowed to offset their carbon emissions by purchasing carbon credits from developing countries. The CDM scheme recently reached a major milestone with the registration of its 3,000th project, a wind farm in Inner Mongolia, China.
All eyes on processes in top CDM markets like China, India Transparency a must for credible, viable carbon markets
By Eleanor Chen At the Biomass Conference 2011 organised by Asia Executive Programs Sdn Bhd in March, Tang said there have been cases of fraud in the amount of HCFC submissions that China-based projects were declaring, wherein some CDM projects generated the waste gas and then destroyed them as part of emission removal to accumulate carbon credits.
Criticism and uncertainty have clouded the success of the Clean Development Mechanism (CDM) market in recent years, with controversy arising over technologies used and processes employed to approve and start projects. China and India are particularly in the limelight because they top the list of countries with the most number of global CDM projects, according to the United Nations Framework Convention on Climate Change (UNFCCC). A recent article in Bloomberg reported that a confidential document – attributed to the United Nations – included findings which suggest that some participating firms in China are seeking to maximise carbon credits over and above normal production demands. Meanwhile, a 2008 BBC World Service report revealed that a smallish chemical plant in rural India, SRF Ltd, is likely to receive US$500 million worth of carbon credits over ten years to destroy hydroclorofluorocarbon (HCFCs) in a project it would have carried out anyway. The SRF project was just renewed at the end of 2010. Infrastructure builder Aecom director of corporate sustainability (Asia) Dr Thomas Tang says an estimated 20% of the projects submitted to the CDM registry are fraudulent.
Thomas Tang: Despite concerns that some are overexploiting the CDM, China is growing its green credentials fast
“There’s a real scepticism that people are abusing the market,” Tang says, emphasising the need to do the science in order to properly gauge the value and impact of CDM projects. “The whole premise was that [the CDM market] helps set the price for carbon and allows the flow of capital towards financing climate mitigation projects,” he explains, adding,
“Money from the CDM market should go towards more impoverished nations which can’t afford things like registration costs or the analysis that goes into it but have the resources essential for restoring the carbon balance.” The CDM’s additionality clause – that emission reductions must be new, over and above business as usual – is meant to help make unattractive carbon reduction projects viable and not be mere money-making mechanisms, says Soon Hun Yang, CEO of environmental consultancy Eco Ideal Consulting Sdn Bhd. Calls have also been made for China and India to switch to developed nation status with a mandatory cap on their emissions where they would have to buy offsets to meet their compliance targets rather than sell them. Of the ten countries with the highest carbon
Asian countries with the most registered CDM projects as of May 2011 CHINA
1386
INDIA
660
MALAYSIA
INDONESIA
SOUTH KOREA
345,847,042*
94,010,246*
799,858*
1,349,887*
68,832,406*
93
66
56
* Certified Emission Reductions (CERs) – a type of emissions unit (or carbon credits) issued by the CDM executive board for emission reductions achieved by CDM projects and verified by a DOE under the rules of the Kyoto Protocol. One allowance or CER is considered equivalent to one metric ton of CO² emissions.
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Malaysia’s potential in CDM
Countries with good institutional arrangements, a stable investment climate and a high awareness of the potential of Clean Development Mechanism (CDM) ventures would benefit the most from them and Malaysia fits all three criteria, according to Aecom director of corporate sustainability (Asia) Dr Thomas Tang. It is also cheaper to do CDM projects in Malaysia compared to other countries, according to Mohamad Adan Yusof of Malaysia-based Mensilin Holdings Sdn Bhd. “It costs US$0.20 to do a project in Sri Lanka. That’s RM0.60, whereas in Malaysia, we hardly go beyond RM0.25 per project,” he says. As of May, Malaysia had 93 CDM projects, the highest number in South-east Asia. The second largest palm oil producer in the world, Malaysia’s CDM potential lies in biomass and biogas, while municipal solid waste, energy efficiency in power plants and power co-generation are other potential sectors. “Since Malaysian banks have yet to value carbon credits, carbon buyers have an advantage in Malaysia’s carbon market,” says Adan.
Mohamad Adan Yusof says the maturity of India’s carbon market facilitates financial backing for CDM projects
dioxide emissions, China tops the list with 6,534 million metric tonnes while India comes in fourth with 1,495 million metric tonnes. Interestingly, China also leads the way with 1,386 (about 45%) of all current global registered CDM projects in May while India came in second with 660 (about 20%). Carbon credit buyers are now looking at other projects in South-east Asia that include forestry in Indonesia, hydropower in Vietnam and biomass across the region, according to Hannah Logan, climate change and energy senior associate at the Singapore office of international law firm Norton Rose. Tang notes, however, that China has aggressive targets of achieving 15% energy from renewable sources by 2020 with heavy investments in megascale hydro projects and wind power plants. China is also the world’s leading investor in low-carbon energy technology with investments totalling US$54.4 billion in 2010, according to a study by the US Pew Environment Group. In 2009, it overtook the US as the nation with the most installed clean energy capacity. Meanwhile, India is spending about 2% of its GDP on renewable energy and expects to achieve 200GW of
capacity from solar power by 2050. India’s investments in low-carbon energy technology total only US$4 billion by comparison and yet, it is a mature CDM market and where carbon credits are bankable, according to Mohamad Adan Yusof of Malaysia-based Mensilin Holdings Sdn Bhd, which provides energy solutions. “In India, consultants who develop the documentation understand the technology and mechanics involved to realise the carbon credit potential while bankers understand the risk and will fund CDM projects. Anyone with an energy emission reduction purchase agreement (ERPA) can go to an Indian bank and get funding,” says Adan. The
He notes that there are, however, also challenges. Registration costs are high – about US$250,000 to US$300,000. The long registration turnaround time is another challenge. The underdelivery of Certified Emission Reductions (CERs) at less than 10% for the 93 registered projects also suggests a lack of knowledge in monitoring, verification and management. Adan says there is a need to innovate in order to develop the CDM in Malaysia. “No one is interested in projects that generate 10,000 metric tonnes (MT)/ year but if 10 projects of this size were aggregated, that’s 100,000 MT/year and is significant enough for carbon credit projects to be developed,” he states. He points to the CDM allowing a single point aggregator to collect all the registered carbon credits and redistribute the income derived, citing several projects in India and the Philippines where even small, scattered projects have benefited from carbon credits. Malaysia, too, could establish carbon credit aggregators with a coordinating body to pool credits from small projects.
maturity of India’s CDM market is reflected in its 94,010,246 tonnes of Certified Emission Reductions (CERs) issued. Khoo Hock Aun of the Cosmo Biofuels Group says businesses want the carbon credit process to be simplified but think that consultants might instead be complicating it. He says projects need to be transparent and measurable every step of the way. “All aspects need to be precisely documented, verification has to be done and continuous monitoring is necessary,” says Khoo. “If you compensate for your emissions by buying carbon credits from whichever areas that reduce your carbon, does that actually reduce the carbon emissions?”
VIETNAM
PHILIPPINES
THAILAND
ISRAEL
PAKISTAN
6,646,339*
164,660*
829,947*
846,721*
2,982,626*
56
52
49
21
11
Source: United Nations Framework Convention for Climate Change website
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information
US rewards foreign businesses for sustainable design Savings on tax for green premises and renewable energy investment Careful compliance with rules essential to getting full tax benefits
By Matt Becker Green incentives are one of the most significant groups of tax credits and deductions available for foreign-based businesses investing in the United States. In addition to the utility cost savings and the positive perceptions associated with sustainable behaviour, businesses that take steps to “go green” can be eligible for tax savings from three general sources: (1) federal, (2) state, and (3) local governments. The most common federal tax incentives for sustainable behaviour by foreign investors relate to accelerated depreciation, tax credits for the production of energy from renewable and sustainable sources, and tax credits for capital investment to produce energy from renewable and sustainable sources.
Accelerated depreciation A foreign business that builds or remodels a facility using efficient lighting, heating/cooling systems (HVAC) or building envelope may be eligible for accelerated tax depreciation of the investment using the Energy Efficient Commercial Building Deduction as prescribed by Internal Revenue Code Section 179D. Eligibility requires that the business invest in efficient systems such that the energy required to operate the systems is 50% lower than a reference facility using minimum requirements. An accelerated tax deduction of as much as US$1.80 per square foot of facility space is available. Facilities that do not meet the full requirements may be eligible for a smaller accelerated deduction. The maximum US$1.80 per square foot breaks down into segments of 60 cents per square foot for each of the three components – energy efficient lighting, heating/ cooling systems (HVAC) or building envelope. If the business facility meets the requirements of only one or two of •
Businesses using energy from renewable sources may qualify for federal tax credits
these areas, it will still be eligible for a portion of the deduction.
RE production tax credit Compliments of Internal Revenue Code Section 45, a foreign business that produces energy from renewable sources may be eligible for tax credit of between 1.1 and 2.1 cents per kilowatt hour of energy produced. Energy produced from wind, geothermal, closedloop biomass, hydro, hydrokinetic, marine, solar, or solid waste sources may be eligible. Certainly utility companies which produce renewable energy can benefit from this credit, but businesses producing electricity from these sources primarily for their own use but also for sale back to “the grid” during offpeak usage periods are eligible as well. Energy investment tax credit For businesses that produce energy from sustainable and renewable sources but find selling energy to the grid overly onerous or impractical, the Business Energy Tax Credit is an im-
portant opportunity. Section 48 of the Internal Revenue Code provides a tax credit for between 10% and 30% of the amount initially invested in equipment used to produce energy from sustainable and renewable sources. Investments in equipment to produce energy from qualified fuel cells, qualified small wind turbines, or electricity from solar technology used to heat or cool a structure can obtain a 30% federal tax credit. Investments in solar technology to produce electricity for other purposes, combined heat and power technology, or geothermal energy production or distribution equipment can qualify for a 10% federal tax credit.
State and local incentives There are many state and local incentives available to foreign businesses with US-based ventures that are energy efficient. These include tax credits, abatements or exemptions, cash grants or rebates, accelerated depreciation, and below-market financing. In addition, many utilities offer incentives for operating in an energy-efficient manner, such as reduced rates or rebates. Many of the benefits available at the state and local level must be negotiated, making it imperative to consider the incentives before any facility investment is made. Consideration of the tax and other related incentives associated with green facilities can dramatically change the net investment cost of such facilities. Thus, having someone with a working knowledge of the available incentives involved in the facility design process will almost certainly add value. Taking advantage of the incentives requires strict compliance with reporting rules, and a failure to do so can result in loss of the underlying benefits. For these reasons it is becoming necessary for companies hoping to successfully design and build a “green facility” to work with competent advisors who can help identify cost segregation, research and development tax credits and other opportunities associated with facility investments. The writer heads the Green Energy Tax Practice at BDO – the fifth largest accounting and consulting organisation in the world.
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Lacey drives up timber trade accountability
hardwood from South-east Asia makes its way to China and Vietnam where it is generally crafted into cheap furniture that is then sold to the US and European Union countries. Malaysia also imports raw wood materials from other countries, particularly Indonesia, Thailand, and Myanmar, which may subsequently find their way to the US. Now that US companies could be prosecuted using laws in the countries from where they source plant and wildlife products – for instance
Failure to ensure supply chain integrity could prove costly Companies can be charged using laws of the country where timber was grown
By Eleanor Chen
Malaysia is one of the largest producers and suppliers of tropical hardwood and related products to the US.
Mere possession of legal documents from the authorities is not sufficient defence against prosecution
It has been three years since the 2008 amendment to the Lacey Act (Lacey) allowed the United States to prosecute traffickers of illegally harvested wood products from other parts of the world. While enforcement has been phased in, exporters of wood products to the US are grappling with additional paperwork while awaiting clarification on some details from the US authorities. Before 2008, the Act protected animals from being illegally hunted and trafficked. Extended in June 2008 to protect plants for the first time, Lacey allows the US to support efforts
at home and abroad to combat illegal logging.
Implications for Malaysian Malaysia is one of the largest producers and suppliers of tropical hardwood and related products to the US. In 2009, Malaysia exported 1.28 million cubic metres of round wood equivalent (RWE) totalling US$688 million in value to the US. Larger volumes of Malaysian wood are exported to countries like China and Vietnam for processing before being imported into the US. Legally and illegally obtained
Malaysian legislation – a growing number of US companies will look for timber whereby its supply chain doesn’t break any laws in the country where the tree was grown, even if it was processed in another country. Lacey gives US authorities the right to penalise individuals and companies, in and outside of the US, regardless of whether they realise that their wood is tainted. Lacey and its latest import declaration requirements issued on 1st April 2010 affect all companies and individuals who ship timber products (paper, furniture, lumber, flooring, plywood, even picture frames) to the US. According to a statement by the Malaysian Timber Council (MTC), Lacey has increased the administrative burden for Malaysian producers, manufacturers and exporters by way of more paperwork. Given the rich and wide species diversity in the tropical forests, wood products are normally traded by their common or commercial name such as keruing, which could contain close to 20 species. For particleboards or medium-density fibreboards (MDF) that can contain a mix of 70 species, the paperwork can be daunting. It therefore comes as a relief that full list of possible species names is no longer needed. For other timber products, however, exporters still have to list all pos •
The Lacey Act gave a boost to antiillegal logging efforts in other countries in 2009 when federal agents from the US Fish and Wildlife Service – citing Lacey – raided Gibson Guitar’s factory in Nashville due to concerns that the company had been using illegally sourced wood from Madagascar.
Stronger bite to the Act The Lacey Act has a provision called “due care” (“due diligence” is used elsewhere) to show that everything possible was done to ensure the timber products were not illegally sourced. Due care does not prevent forfeiture of goods if the US prosecutor can prove illegality, but could keep the defendant out of jail. Certification of the sustainability of the timber is a good start to show legality. In a US court however, so long as the prosecutor produces a witness and/or evidence of illegality, bribery, etc, and the jury believes the evidence, the court can confiscate, fine and even jail the convicted person. Companies will be fined and their goods confiscated. Consequences under this Act include administrative penalties of up to US$10,000, forfeiture of the trafficked goods, criminal fines of up to US$250,000 (US$500,000 for companies) and possible jail time of up to five years. Violations of the Lacey Act may also trigger further charges of smuggling or money laundering. The Lacey Act provisions still apply even if the timber species is not
Timber from Deramakot Forest Reserve, Sabah – the first natural tropical rainforest in South-east Asia managed in accordance with sustainable forestry principles
sible species, even if it is difficult to identify down to species level. While this has not had any effect on pricing as the manufacturer or exporter is absorbing the added administrative costs, MTC has requested that the US authorities look into a more practical requirement, such as listing the genus of the trees instead of the species. MTC added that while Malaysia has yet to see the full impact of the Act, the local industry is already at a disadvantage as there is no burden of corresponding requirements for alternative or substitute products such as plastics or plastic composites which are obviously less “green” than wood.
Integrity throughout supply chain The first law of its kind in the world to prohibit the import, sale or trade of illegally-harvested wood and wood products according to the laws of the source country, Lacey is rooted in the concept of reducing demand for illegally sourced wood and differs from the EU or other countries’ national or voluntary schemes to combat illegal logging. Malaysian round wood export to the US Year
2000
2001
2002
2003
2004
2005
2006
2007
2008 2009
Volume (million cubic metres)
1.78
1.74
1.98
1.96
2.39
2.50
2.33
1.76
1.32
1.28
Export value (US$)
633
534
650
647
831
908
960
854
786
688
Source: TRAFFIC
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on the list. Not all plants have been listed as implementation is being phased in. The US Department of Agriculture website at http://www. aphis.usda.gov/plant_health/lacey_act/ index.shtml has the latest list.
Pact to stop tainted timber export to Europe Indonesia and the European Union (EU) signed a landmark agreement on May 4 aimed at preventing illegallylogged timber from reaching Europe. Licencing procedures will start in 2013 to ensure all timber exported from Indonesia to Europe are certified as sustainably logged. The Forest Law Enforcement Governance and Trade Voluntary Partnership Agreement (VPA) will be backed by Indonesia’s new system to verify the legality of its timber exports. The Commission and EU member states have said they will provide support to help implement the system. Indonesia is the first Asian nation and the largest timber exporter to enter into a VPA. Negotiations started in 2007 and the agreement will take nine months to be ratified. The EU has signed similar accords with Ghana, Cameroon and the Central African Republic. VPA negotiations are ongoing with several other countries, including Malaysia and Vietnam. The Indonesian-EU pact is significant because illegal harvests are said to represent about 50% of timber exported from Indonesia and 20% of timber products imported into the EU, although Indonesia has stepped up efforts to combat illegal logging. Agence France-Presse reported Indonesian Minister of Forestry Zulkifli Hasan as saying: “Illegal logging is stimulated by high demand for illegal timber and timber products. Therefore, efforts to combat illegal logging will not be effective if we only address the supply side, ignoring the demand side.” The report also says the EU imported US$1.2 billion worth of timber and paper from Indonesia last year, about 15% of the country’s total exports in the forestry sector. Businessgreen.com reported Indonesian civil society group, Telapak, which has been involved in the VPA process, as saying that success would depend on the quality and transparency of the auditing system, and whether penalties are punitive enough.
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Micro-finance for green entrepreneurs Kiva.org, the world’s largest personal microlending website, has launched a new loan category: Kiva Green Loans. This scheme enables the Kiva community to lend (and borrow) as little as US$25, helping businesses and individuals around the world to move to cleaner and more efficient energy use. Kiva Green Loans will contribute towards reducing energy expenditure, minimising waste and pollution, recycling or reusing materials. Founded in 2005 and headquartered in San Francisco, Kiva was the first personal microlending website to connect people and alleviate poverty through loans. Over 570,000 people have since lent more than US$200 million to 537,000 entrepreneurs in 59 countries through the site. Go to Kiva.org to learn more or browse some success stories.
Record green buildings in Singapore ..
The Singapore Building and Construction Authority (BCA) gave out a record 164 BCA Green Mark awards this year, up from 102 last year. There are now more than 750 Green Mark building projects in Singapore, covering up to 11% of the total gross floor area. The government aims to green at least 80% of the island’s buildings by 2030. The BCA Green Mark was introduced in 2005 to recognise energy- and waterefficient buildings. City Developments Limited (CDL), which has more than 50 Green Mark Gold awards or better, including 16 Platinums, received the inaugural BCA Green Mark Platinum Champion Award. It was also the inaugural BCA Green Mark Champion in 2008. This year’s BCA Green Mark Champion Award went to the Housing and Development Board for 14 projects that attained at least Green Mark Gold status; five were rated Platinum. It is the first public sector agency to
Eco-and-lumbar friendly Spina Imagine sitting on a lumbar support office chair that is made from 100% recycled materials. The ergonomic Spina supports the user’s back, regardless of whether he is sitting back or leaning forward. Parts such as the mechanism cover and levers are made out of 100% recycled polypropylene from recovered battery cases. Less urethane is used in the seat while most plastic parts are labelled to facilitate separation and recycling during disposal. This product by Itoki Corporation won the Gold Prize of the Good Design Award in 2007. For more information go to http://www.itoki.jp/spina/
receive the award. BCA also gave out individual awards this year: Green Architect of the Year 2011 to Vivien Heng of RSP Architects Planners & Engineers Pte Ltd; Green Engineer of the Year 2011 to Tan Kiat Leong of Beca Carter Hollings & Ferner (Sea) Pte Ltd; Green Advocate of the Year 2011 to Allen Ang Aik Leng of City Developments Ltd; and Green Innovator of the Year 2011 to Ho Nyok Yong of Samwoh Corporation Pte Ltd. Source: Today, BCA website
Recycled carpets cut CO emissions A carpet recycling facility in La Mirada, California has recycled more than 45 million kg of used carpet since it started operations in 2009. By doing so, Carpet Recyclers has prevented some 95,000 metric tons (carbon equivalent) of greenhouse gases from being emitted into the atmosphere. It is on track to recycle more than an additional 25 million kg this year. The company has also created 60 green jobs and is set to create another 90 by the end of the year. Starting July 1, the California Carpet Stewardship Law will impose a 5-cent carpet stewardship assessment for every square yard of carpet sold in California. The money
may be used for new technologies and products. Over 180 million to 590 million kg of carpet (3 to 4% of all waste disposed) are discarded annually in California landfills.
Indonesia to stop forest cutting for two years Indonesia will not cut down any peatland and primary forests for the next two years in a financial deal with Norway that could protect half of Indonesia’s remaining forests, reports the Associated Press. Norway will pay a fixed sum per ton of CO2 emissions that Indonesia reduces through its forest preservation. A world supplier of pulp, paper and palm oil, Indonesia is said to be the world’s third largest emitter of greenhouse gases after the US and China. Through this deal, Indonesia could earn up to US$1billion to help finance an independent system of monitoring and quantifying CO2 emissions. The plan, which was signed last year, took effect this May. It will protect 64 million hectares of trees from logging and conversion into plantations. Last year, developed nations pledged more than US$4 billion to finance a new United Nations-backed programme called Reducing Emissions from Deforestation and Degradation. •
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LEED for Healthcare
No heat-related downtime with EnviroCube
In April, the US Green Building Council developed LEED for Healthcare to guide the design and construction of new healthcare facilities and the renovations of existing ones. Healthcare facilities here refer to inpatient, outpatient and licensed longterm care facilities, medical offices, assisted living facilities and medical education and research centres. The rating tool aims at meeting the needs of 24-hour operational facilities, including process water use related to medical equipment, rural facility locations, patient populations with compromised immune systems who are sensitive to chemicals and pollutants, patient and staff health and other issues unique to this building type. It is the result of six years of work by the Green Guide for Healthcare (GGHC), a project of the Centre for Maximum Potential Building Systems and Health Care Without Harm, and the US Green Building Council (USGBC). A green healthcare facility – one that has a healthy indoor environmental quality and connects patients to the outdoors – is said to promote healing, leading to shorter hospital stays and fewer return visits.
Data centre smart grid leader TrendPoint Systems has unveiled the EnviroCube, the first data centre cooling management appliance. Announced in May, the EnviroCube prevents heatrelated data centre downtime while improving energy efficiency – goals previously thought to be mutually exclusive. It monitors a full spectrum of electrical and environmental metrics that indicate cooling inefficiencies before they lead to heat-related downtime, which can happen in seconds if a cooling unit fails. The appliance also allows cooling units to be tuned for optimal performance, cutting cooling costs by up to 30%. To view the demonstration, see http://www.trendpoint.com/envirocube
EV sharing at Arizona campus The University of Arizona staff and students have gone green, not only by sharing cars, but by being part of an electric vehicle (EV) carsharing scheme. Connect by Hertz, a global car sharing club, delivered ten Nissan LEAF to the campus on Earth Day in April. Connect by Hertz is the first car share company to bring production EVs to a university campus. Members pay an hourly rate for the vehicle use and must be at least 18 years old and have a valid driver’s license with at least a year’s good driving record prior to joining. They can also use their privileges in other cities where Connect by Hertz operates, including New York, London, Berlin, Madrid, Melbourne, and Paris. Chairman and •
chief executive officer of Hertz Corporation Mark P Frissora says students understand the importance of environmental sustainability while adapting to the latest in technology and sharing EVs allow students to bridge these concepts.
Hyflux to build, run new Singapore desalination plant Asian markets will be the key revenue drivers for water solutions company Hyflux, with China making up 40% of its revenue and Singapore another 21% in the first quarter of 2011. It secured S$850 million (US$688 million) worth of projects in Singapore and China in the first three months of its current financial year. In April, Hyflux, through its wholly-owned subsidiary, Tuaspring Pte Ltd, sealed a 25-year Water Purchase Agreement with PUB, Singapore’s national water agency, to supply desalinated water from Singapore’s second and largest seawater reverse osmosis (SWRO) desalination plant that Hyflux will be developing on a Design, Build, Own and Operate model. Hyflux will also operate and maintain the 318,500 m3
per day desalination plant upon its completion in 2013. It will feature the world’s second largest ultrafiltration membrane pre-treatment installation for an SWRO plant. Algeria will have the biggest, also being built by Hyflux.
Multilateral banks back renewable energy Multilateral development banks (MDBs) are increasing their support for renewable energy (RE) investment even as commercial lending for RE drops. While MDB support (US$21.1 billion) still accounts for only oneeighth of the global sustainable energy investment in 2009 (US$162 billion), the support of MDBs is critical for developing nations because MDBs provide technical assistance, concessional loans and guarantees that mitigate perceived risks associated with RE technologies. According to a November 2010 study from Bloomberg New Energy Finance, from 2008 to 2009 such loans increased more than threefold to US$21.1 billion. Institutions which are the most supportive are the European Investment Bank, the Inter-American Development Bank, the Asian Development Bank, and the International Finance Cooperation.
Guide to green colleges
Calendar of events
On Earth Day (April 22) this year, the Princeton Review, working with the US Green Building Council, released its second annual guidebook profiling the 311 most environmentally responsible colleges in the United States and Canada. Of the number, 308 are in the US. Colleges profiled must have shown commitment to sustainability in their academic offerings, campus infrastructure, activities and career preparation. The Princeton Review created this guide in 2010 in collaboration with USGBC, which is best known for developing the LEED green building certification programme. The free and annually updated 220-page guide can be downloaded at www. princetonreview.com/green-guide. aspx and www.centerforgreenschools. org/greenguide.
Jun
The 4th Annual China Green Transport Summit and Exhibition (CGTS) 24th–25th June Pullman Sanya Yalong Bay Resort & Spa Hainan China www.hnzmedia.com/events/cgtsev2011/en The International Renewable Energy & Environment Conference 24th–26th June Kuala Lumpur, Malaysia http://warponline.org/conferences.htm Clean Power Asia Conference & Expo 2011 28th–30th June InterContinental Bangkok Bangkok, Thailand www.cleanpower-asia.com
Jul
Green priority in ICT buys Over three-quarters of Asia-Pacific government chief information officers and IT managers realise the need for a dedicated office to plan and execute an Information and Communications Technology (ICT) sustainability strategy. In a poll by APC by Schneider Electric of 118 professionals at a FutureGov event in Kota Kinabalu, Malaysia, 76% of respondents say they include sustainability criteria in the evaluation and selection of ICT purchases. Positive News Media reported that of the 32% of respondents who said cost and/or availability of electricity will have a significant impact on their data centre’s operations over the next three years, more than 70% were from developing countries, i.e., India, Bangladesh, Sri Lanka, Indonesia, Thailand, Vietnam, Philippines and Malaysia. Respondents from the more developed countries such as China, Taiwan, Hong Kong, Japan, Korea, New Zealand, Australia and Singapore were less concerned with the supply of energy, noting that it may only have minimal impact. The poll was designed to benchmark efforts and plans by government agencies regarding energy-efficient ICT.
Clean Energy Expo China 22nd–24th June CNCC Beijing, China www.cleanenergyexpochina.com
2nd Annual Cleantech Investment World Asia 2011 11th–14th July Singapore www.terrapinn.com/2011/cleantechnology-investment-world-asia Green Lifestyles Asia 15th–17th July Hall 402 & 403, Suntec Convention Centre, Singapore www.greenlifestylesasia.com
Aug
Green Automobil 2011 Expo 10th–12th August Pragati Maidan, New Delhi http://greenautomobil.com
Sept
Electric, Power & Renewable Energy Indonesia 2011 21th–24th September Indonesia www.pamerindo.com/events/4 Renewable Energy World Asia 2011 27th–29th September KLCC, Malaysia www.renewableenergyworld-asia.com/ index/conference-information.html 3rd Annual Sustainable Cities 2011* 27th–30th September Singapore www.sustainablecitiesasia.com * Subscribers and registered users of Green Purchasing Asia receive a 10% discount on conference fees to 3rd Annual Sustainable Cities 2011. Email info@greenpurchasingasia.com to find out more about this exclusive offer.
Hybrid-Powered Vehicles Author: John M German Publisher: SAE International
Hybrid-Powered Vehicles Second Edition John M. German
Hybrid-Powered Vehicles should be of high interest to automotive executives, decision-makers, managers, academics and engineering and research professionals who need to get a quick grasp of the latest developments in hybrid vehicle technology. The author, John M German, is a senior fellow and programme director for the International Council for Clean Transportation with experience in technology innovation, vehicle efficiency systems, and United States policy development. Written in clear yet accurate language, Hybrid-Powered Vehicles moves briskly through a brief history of how automobile power systems have evolved over the last century to arrive at today’s twin challenges of rising fossil fuel cost and still expensive electric vehicle technology. Hybrid vehicles seem at first a logical technological compromise and have indeed gained traction among the affluent and the early adopters as a fuel-efficient and environmentally friendly choice. German suggests, •
information however, that hybrids tend to be a transitional technology as conventional cars become increasingly fuel-efficient and fullyelectric vehicles gradually become more viable and economical to produce. This book lays out critical concepts necessary to compete in the contemporary automotive engineering industry. It also assesses market forces shaping the technology and the future of hybrid vehicles in the US alongside alternatives such as fuel cell vehicles and battery electric vehicles, and provides technical suggestions on optimising hybrid vehicle performance and marketability to pricesensitive, loss-averse mass markets.
The New Rules of Green Marketing Author: Jacquelyn A Ottman Publisher: BerrettKoehler Publishers
J AC Q U E LY N A . O T T M A N
THE
NEW RULES OF
GREEN MARKETING Strategies, Tools, and Inspiration for Sustainable Branding
Green marketing consultant Jacquie Ottman’s latest book delivers early on its promise to share the new rules of marketing – all 20 of them are listed and briefly elaborated upon right after the preface and even before chapter one. In fact, what follows afterwards is the fulfilment of its subtitle: Strategies, Tools, and Inspiration for Sustainable Branding. Using •
a combination of her own marketing analysis concepts and strategies, thoughtprovoking statistics, and a selection of case studies including HSBC, Starbucks and Timberland, Ottman sets out to explain how the old rules changed, why the new ones matter, and what marketers should expect to see and to do differently as green steadily becomes mainstream in every aspect of our lives. The first new rule is that green is now mainstream and so everybody’s green, only to varying degrees and differently so. Ottman therefore begins by discussing how to segment consumers, whether it’s by their interests, commitment levels or life stages. Other aspects of the new rules involve taking a product lifecycle, cradle-to-cradle, triple bottom line approach to innovating and conceptualising green products that considers supply chain accountability and post-use disposal options instead of being content with shortsighted, single-attribute green claims. Another important principle running through the new rules of green marketing is that just about everyone is a stakeholder, including the unborn, the disinterested and certainly even the critics. Instead of viewing environmentalists as industry outsiders or adversaries, companies like Kimberly-Clark and McDonald’s have found it more profitable to partner with Greenpeace and Conservation International, respectively, bringing on board these groups’ knowledge and constructive criticism to help green the corporations’ products and processes for the mass market. Ottman also stresses
the market’s turn to collaborative engagement and transparency in an age of social media and freely available information. She reminds marketers that today’s consumers do not expect perfection but value “radical transparency” and authenticity, and are often happy to support a brand that eschews “greenwashing” and to hold it accountable as it works towards higher levels of genuine sustainability. The book concludes with a detailed index and endnotes, and extensive recommendations for further reference. While The New Rules is written from a US-based perspective and Ottman is the first to admit this in the preface, the American market’s relative maturity and complex challenges have yielded a wealth of lessons that are useful to the emerging green economies in Asia and the rest of the developing world.
Clean Energy Progress Report Publisher: International Energy Agency
“We must see more ambitious, effective policies that respond to market signals while providing longterm, predictable support.” – Ambassador Richard Jones, Deputy Executive Director of the IEA This report by the International Energy Agency (IEA) assesses the global deployment of clean energy technologies and offers recommendations to countries – particularly via energy ministers – on future action and spending.
Clean energy
Progress Report
I E A input to the Cl e a n E n e rg y Min ist e ri a l
Presented in April at the second Clean Energy Ministerial meeting in Abu Dhabi, it gives an overview of key policy developments, public spending on research, development, demonstration and deployment of clean energy technologies – including renewable energy, energy efficiency, electric vehicles, nuclear power, biofuels and CO2 capture and storage (CCS) – and their global deployment status. While the report highlights significant recent developments in renewable energy, especially solar and wind power, it notes that these successes were eclipsed in the same period by increased use of fossil fuels, namely coal, which met 47% of the global new electricity demand over the past decade. Worldwide renewable electricity generation since 1990 grew an average of 2.7% annually, less than the 3% growth for total electricity generation. The IEA therefore argues for more aggressive clean energy policies, including phasing out of fossil fuel subsidies, implementing stronger, transparent incentives especially for the electric vehicle (EV) markets, and extensive deployment of CCS. It also proposes increased support for R&D and consumer education campaigns.