Power Insider Asia 2 by Pimagazine Asia

PIINSIDER POWER

A S I A’ S L E A D I N G P O W E R R E P O R T

THE PHILIPPINES ENERGY MARKET COUNTRY FOCUS

EXCLUSIVE INTERVIEWS Gatot Prawiro - GE Anil Kane - WWEA Nomi Ahmad – Wartsila Hen Jinhyuns – AEIC AUGUST/SEPTEMBER 2010

FEATURES INSIDE INCLUDE: Alice Springs Solar City, Rural Electrification Asia, Smart Grid Developments China, Solar Market Developments, Wind Energy Overview, Cogeneration

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welcome wherever you are in the world, whatever tV channel you turn on, newspaper you pick up, chances are that you will see another article on what this government or that government is doing to solve its own energy problems and reduce carbon emissions.

governments around the world allocated more than $436 billion in “green stimulus” programs, most of which will flow into the clean energy industry this year and the next. another positive factor was the fall in the cost of renewable energy technologies, making the sector more cost-competitive and hence, more attractive to potential investors.

ContaCt us: Editor: Charles Fox Creative Director: Colin Halliday Sales Director: Solomon King Sales Development: Alec Piercy Digital director: Thomas Reilly Accounts Manager: Katherine Godfrey Managing Director: Sean Stinchcombe sKs Global limited Kingswood House South Road Kingswood Bristol UK BS15 8JF e: info@sks-global.com w: www.pimagazine-asia.com w: www.sks-global.com t: +44 (0) 1179 606452 F: +44 (0) 1179 608126

SKS Global Power Insider Asia magazine is published quarterly and is distributed to senior decision makers throughout Asia and the Pacific. The publishers do not sponsor or otherwise support any substance or service advertised or mentioned in this book; nor is the publisher responsible for the accuracy of any statement in this publication. Copyright: the entire content of this publication is protected by copyright, full details of which are available from the publisher. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electric, mechanical, photocopying, recording or otherwise without the prior permission of the copyright owner.

asia pacific still is charging ahead with investments in ‘green’ technology, with china outpacing the usa as the new global leader in wind installation and investment, this itself was simply a matter of when not if this would happen! china especially is all over the world securing natural resources and partnering with foreign governments to ensure that they stay ahead when our natural resources deplete. understanding that the power needs of its growing economy need to be met without endangering the environment, china is not only embracing renewable energy sources as an alternative to fossil fuels but is also fast emerging as a clean-energy powerhouse. In 2009, its investments of $34.6 billion helped it replace the united states and emerge as the leader in clean energy finance and investments for the first time. last year, the country passed germany to become the world’s second-largest producer of wind power behind the united states. It is already the world’s leading renewable energy producer in absolute numbers, with an installed capacity of 152 gigawatts (gw). In 2007, the National Development and reform commission announced a new plan with the targets of renewable energy accounting for 10 percent of primary energy consumption by 2010 and 15 percent by 2020.

china has also recently amended its renewable energy law to require power grids to purchase a set percentage of renewable power each year and created a streamlined mechanism to fund these incentive programs. In addition, the country has also set ambitious goals for developing sustainable infrastructure such as green buildings.

china is, of course, a major talking point which we cover later in this issue, but what about the philippines and australia? read more of these exciting markets in this edition. In this issue, we have some excellent interviews with the market movers and shakers, some great company coverage and technology overviews. as usual, please email us your thoughts and comments regarding the market in asia, our team are on the front line ensuring that the news and developments reach you first, so if you haven’t already, sign up to our rss feed. I hope that you enjoy this edition.

Charles Fox editor

power insider august/september 2010 3

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CONTENTS 4

Newsdesk

Rough Times in the Solar Power Industry 12 A Light Technology

Alice Springs - Australiaâ&#x20AC;&#x2122;s Solar Centre

Energy Technology Revolution

Wind Power Opportunities - Anil Kane

Rural Electrification in Emerging Economies 30 The Electricity Game

Cogeneration Roundtable

Cairns Water - Wonderware Software

Phillipines Focus

Providing Cheaper Power

China: Smart Leader in the East

AMR and Smart Metering

Events

POWER INSIDER AUGUST/SEPTEMBER 2010 5

NEWS DESK TS-SPACE SYSTEMS WINS SOLAR INDUSTRY AWARD FOR EXCELLENCE TS-Space Systems has been awarded a Solar Indsutry award for excellence for their multi-source, close-match solar simulator technology. ‘The Solar Industry Awards continue to promote the people, process and places that make up the global PV and solar industry,’ said David Ridsdale, Editor in Chief of Solar, PV Management. ‘The awards are voted for by our readers ensuring these awards are decided by the individuals at the grass roots of the industry. The companies, people and products are selected due to the confidence of the global solar and PV community.’ TS-Space Systems is the first and only company to pioneer the use of metal halide sources in close-match solar simulators for photovoltaic testing. The high temporal stability and close spectral match combined with the ability to control the output spectrum via separate wavebands means the TS-Space Systems’ Unisim solar simulator is the only PV research tool designed for testing the latest generation of multi-junction devices.

COMPANY NEWS FROM AROUND THE WORLD Minesto raises 2m for testing tidal power kite

Minesto AB has raised over 2 million to test its Deep Green underwater tidal power kite off the coast of Northern Ireland in 2011. The test aims to prove the functionality of the tidal power kite and support the cost of energy calculations. Minesto was formed in 2007 to develop and commercialise plants using tides to generate

electricity. The company is a spin-off from the Saab Group, which started to develop the product in 2003.

Adb & wb launch need assesment survey for pakistan

The Asian Development Bank (ADB) and the World Bank (WB) have accepted a call by the Pakistani government to lead the damage and needs assessment (DNA) of the recent floods that have devastated the

6 AUGUST/SEPTEMBER 2010 POWER INSIDER

country. “The World Bank has completed numerous damage and needs assessments worldwide in collaboration with other key financing and donor institutions such as ADB and we will be bringing that experience to bear on this DNA, which is going to be a challenge considering the enormity of the disaster”, said Rachid Benmessaoud, the WB country director for Pakistan. “The ADB and WB will col-

laborate with UN and other key donors through participation and sharing of information.” Such surveys are generally conducted in the shortest possible time immediately after a natural disaster to provide the government and international community with a credible assessment of the extent of the damage and an estimate of the cost to reconstruct and rehabilitate the damaged infrastructure and services. WWW.ADB.ORG

OSI soft Announces Its Participation with SAP in the Korean Jeju Smart Grid Test-Bed Project

OSIsoft, LLC (www.osisoft. com), the leader in real-time data infrastructure solutions, today announced its collaboration with SAP Korea on the KT Jeju smart grid test-bed project. The goal of the Jeju smart grid project is to help companies operate more efficiently with flexibility and

ASIA PACIfIC fUEL CELL TEChNOLOGIES ANNOUNCES GOVERNMENT CONTRACT fOR 10 MICRO fUEL CELL CARS Asia Pacific Fuel Cell Technologies (APFCT), a Taiwan-based PEM fuel cell developer, has announced that the company has won a contract for fuel cell micro car fleet demonstration under Demonstration and Verification Program of Hydrogen Energy Industry organized by Bureau of Energy, Ministry of Economic Affairs of Taiwan (BoE). According to the press release, APFCT will develop a 10-unit fleet of fuel cell micro cars starting September this year. The company expects to complete manufacturing the micro car fleet in 2011 followed by a 15-month fleet demonstration data acquisition phase. Each micro car is expected to be equipped with a 48V fuel cell battery hybrid power system that has nominal power output of 3kW and maximum power output of 5kW. The hydrogen will be supplied using low-pressure metal hydride base canisters that are developed by APFCT for light electric fuel cell vehicles, specifically. Thisis the second government contract APFCT has one to develop a fleet of vehicles: late last year, APFCT also won a contract for a 10-unit fleet demonstration of ZES 4.6 fuel cell scooters under the same government program. Production of the 10 scooters was completed in July 2010 and the fleet is now in the demonstration riding and data collection phase. Web: www.apfct.com

adaptability through the establishment of a smart grid in Korea. OSIsoft and SAP will provide solutions to KT for the duration of the Jeju smart grid test-bed project, including OSIsoft Meter Data Unification and Synchronization (MDUS) offerings and SAP for Utilities solutions. The companies involved in the Jeju smart grid demonstration project will verify the functionality and performance of smart grid solutions from OSIsoft and SAP. Ukraine Asks to Review ‘Unfavorable’ Russia Gas Price;

Email: info@innotechsolar.com

INNOTECh SOLAR LAUNChES Off-GRID SOLAR MODULE Designed for grid-independant solar installation, the Innotech Solar (ITS) ‘off-grid’ solar module allows different solar cell types to be used, including half and third cells. Particularly suitable for large roof and ground mounted systems, the standard version of Innotech Solar’s off-grid solar module has a capacity of 80 Wp and customised solar modules can be commissioned from as little as 5 Wp. Although the ITS Off-grid solar module from provides another option for users in Europe who would like to install a grid-independent power supply, ITS highlight that their solar module is particularly suitable for the African and South

Ukraine’s government wants Russia to review the price it charges for natural gas supplies, saying that even with a discount, fuel costs are squeezing the economy. “Our aim is to review extremely unfavorable agreements with Russia,” Prime Minister Mykola Azarov said today at a government meeting. “Only the agreements signed in Kharkiv, under which we have a $100 discount, allow us to avoid collapse.” Pricing disputes between Russia and Ukraine over sup-

ply and transit have disrupted gas deliveries to Europe twice since the start of 2006. Russian gas exporter OAO Gazprom’s contract prices, which are linked to global oil prices, have exceeded spot market levels. Gazprom spokesman Sergei Kupriyanov declined to comment on whether Ukraine had formally sought a review of contracts.

Origin still confident on gas export project

ORIGIN Energy is shrugging aside market concerns that its

American markets whose power grids are often underdeveloped. The solar module is Innotech Solar’s third product line which involves processing and optimising solar cells achieved through two procedures. In the first, cell impurities are isolated using lasers. The second procedure entails removing parts of non-functioning solar cells – also using laser technology – in such a way that the remaining parts of the solar cells can operate at full capacity. These half and third cells are used in the ITS Economy half cell and ITS Economy third cell solar modules. Web: www.innotechsolar.com

$35 billion gas export project could be delayed, saying it is on track to make a final decision on the massive investment this year. Viewed by some as lagging in the race to ship liquefied natural gas from the east coast, Origin yesterday said it remained confident of securing a buyer because Asia’s energy users would soon need Australia’s hefty gas reserves. The utility’s managing director, Grant King, made the pledge to catch up with his big LNG rivals after handing down a 10

per cent increase in full-year underlying profits, to $585 million. The rise was driven by a strong performance in its electricity businesses - including a 70 per cent jump in pre-tax earnings in generation and a 20 per cent rise from its power retailing arm. Statutory profits slumped 91 per cent to $612 million, but this measure is a more volatile gauge of earnings for this year because it comes after Origin booked $6.7 billion in earnings after selling assets to Cono-

POWER INSIDER august/september 2010 7

news desk repower opens wind power TecHnoLoGy cenTre REpower has officially opened its new wind turbine technology centre in Osterrönfeld in the Rendsburg-Eckernförde district, Germany. The wind turbine research and technology centre has approximately 11,700 m2 of floor space. In addition to research activities and further development of the REpower wind turbines and products, the worldwide service and maintenance of onshore and offshore turbines will be organised from the Osterrönfeld location. The relocation to the centre was completed with the installation of the Permanent Monitoring System (PMS). Via the control centre of the PMS department, the global REpower fleet of more than 2500 wind turbines is remotely monitored around the clock. web: www.repower.de

company news from around the world cophillips last year. The company also forecast stronger profit growth of 15 per cent in the year ahead.

ADB offers $280-million loan for e-bikes

The Asian development Bank is offering as much as $280 million in loans for the philippine government to finance a proposed re-fleeting program for tricycle drivers and operators shifting to electric motorbikes

or e-bikes. “The loan will be coursed through AdB conduit banks like Land Bank of the philippines for re-lending to tricycle drivers who may want to shift into using e-bikes,” environment secretary ramon Jesus paje told reporters in a briefing Tuesday. He said AdB will give 30 ebikes as donation to city governments in the Metropolis. “AdB wants to us to sample the bikes to see for ourselves

8 august/september 2010 power insider

that these machines are totally pollution-free. no emissions, less pollution,” he said. if all philippine tricycles are e-bikes, the country can save much as 20 million metric tons of carbon footprints a year.

Kuwait concerned over Iran’s Bushehr nuclear plant

Kuwait has expressed safety concerns over iran’s new nuclear reactor on the opposite side of the Gulf, fearing fallout

from possible leaks, the official news agency KUnA reported. “Kuwait’s concern is based on fears of any leaks due to natural causes that may have future consequences,” foreign ministry undersecretary Khaled al-Jarallah said, quoted by KUnA late on Monday. Kuwait is the nearest country to the russian-built nuclear plant in the iranian city of Bushehr, located like Kuwait in the northern Gulf. iran loaded the Bushehr

facility with nuclear fuel last saturday and the United states said there was no “proliferation risk” from the civilian plant because of russian involvement. A number of Kuwaiti Mps, however, have called on the government to take precautionary measures against any incident from iran’s first nuclear plant. But iran’s foreign ministry spokesman ramin Mehmanparast told reporters at his

CERAMIC FUEL CELLS SELLS A BLUEGEN UNIT TO TOKYO GAS Ceramic Fuel Cells Limited will install a BlueGen gas-to-electricity unit with Japan’s largest gas utility, Tokyo Gas. Mitsui & Co. has ordered the BlueGen unit on behalf of Tokyo Gas. The BlueGen unit will be installed and demonstrated by Tokyo Gas at the company’s testing laboratory in Tokyo. According to the press release, Tokyo Gas is Japan’s largest gas utility, serving 10.5 million gas customers in Tokyo and the surrounding region, representing 43 percent of all city gas

sold in Japan. The Tokyo Gas group produces, distributes and retails natural gas, and sells gas appliances, energy services and electricity. Established in 1885, the group has 15,500 staff and and 2010 group revenue of £10.26 billion (USD 16 billion). This is the second order from Japanese firms for Ceramic. The order from Tokyo Gas follows orders for two BlueGen units from Japan’s second largest gas utility, Osaka Gas, also arranged via Mitsui & Co.

LDK SOLAR INCREASES POLYSILICON PRODUCTION LDK Solar Co Ltd’s second polysilicon production facility with an output of 5000 mega tonnes has completed the commissioning process and commenced commercial production. This second facility, located at the 15,000 MT Mahong Polysilicon Plant in Xinyu City, China, is expected to reach its designed annualised capacity within three to 6 months. Xiaofeng Peng, Chairman and CEO of LDK Solar, says: “Lessons we learned and experience gained from the first train has been applied and allowed us to increase our speed of execution in commissioning and starting up commercial production of the second train. Quality of the polysilicon produced to date confirms the state-of-the-art technology implemented at our Mahong polysilicon facility. Web: www.ldksolar.com Email: info@ldksolar.com

weekly press conference on Tuesday that the Bushehr plant adheres to “high standards” and had the seal of approval of the UN nuclear watchdog. “Due to the high standards with regards to safeguards in the Bushehr nuclear power plant, there should be no concern about it,” he said. “The International Atomic Energy Agency has approved the safeguards in the Bushehr plant.”

China Recycling Energy partners with state-owned

bank, receives funding

China Recycling Energy (CREG), which provides technology to produce energy from waste, has secured funding through a strategic cooperative agreement with state-owned financial institution China Cinda Assets Management. Cinda will provide CREG with up to RMB200m ($29m) in convertible notes and trust loans to fund the fourth and fifth phases of CREG’s power recycling projects to recycle waste heat from Erdos Metal-

lurgy’s refinery plants a under a joint venture it holds with Xi’an TCH. These projects will have an aggregate power production capacity of 39MW and are due to be complete next year, CREG said. Cinda has also agreed to work exclusively with CREG through the agreement, and to encourage its portfolio companies to cooperate with CREG and develop energy improvement projects in return for service fees. ‘The vast and deep rooted

business relationships and powerful state backing possessed by Cinda throughout China cannot be underestimated,’ said chairman and CEO of CREG Guohua Ku. As a shareholder in numerous large-scale high energy consuming industrial firms, Cinda has agreed its subsidiaries will exclusively work with CREG and not provide client introduction service to competitors. Weizhong Chen, vice president of Cinda, said, ‘Through the cooperative and capital-

based agreement with CREG, Cinda is entering the burgeoning energy recycling industry in China with its leader CREG.

HCM City two-per cent plan saves power since January

HCM City has exceeded its target for energy savings for the first seven months of the year, according to the HCM City Power Corporation. To do so, the corporation worked with the HCM City Export Processing and Industrial Zones Authority, which encouraged companies to save

POWER INSIDER AUGUST/SEPTEMBER 2010 9

NEWS DESK TRINA SOLAR’S NET INCOME DOUBLES IN Q2

Trina Solar has reported a doubling in net income for the second quarter (Q2) 2010 to US$38.7 million, compared to US$18.6m in Q2 2009. Net revenues jumped 147% to US$370.8m and operating income soared 348% to US$83.3m. Trina Solar says the increase in revenues is largely down to increased brand recognition and the cuts in the German feed-in tariff this summer. Jifan Gao, Chairman and CEO at Trina Solar, says: “We exceeded our previous guidance through both record shipment and volumes, and despite significant Euro currency pressures, a sequential improvement in gross margin.” He adds: “We see increasingly evidence that strong demand for our PV products will extend well into 2011, and we are currently looking into how best to manage capacity expansion to capture increasing global market opportunities. Web: www.trinasolar.com

CHINA RELEASES DETAILS ON GREEN CAR PLAN AND YES IT INCLUDES FUEL CELL VEHICLES China’s Ministry of Industry and Information Technology (MIIT) has worked out a energy car industry road for the next ten years. One claim is that in the plan China’s annual production of electric cars, hybrid energy vehicles, hydrogen fuel cell cars and solar cars, will increase to 15 million units by 2020. The plan has not yet been approved by the Nation’s State Department. It will soon be sent through for final approval. The government’s green car plan also includes subsidies to the domestic manufacturers of car engines and automotive batteries. According to the MIIT, China will have three to five big-scale green car producers and two to three leading car engine and battery producers by 2020.

COMPANY NEWS FROM AROUND THE WORLD 2 per cent of their energy consumption demands during the peak period of this year’s dry season. The city said 158.1 per cent of its target of energy savings was met during this period. Local power companies said 821 restaurants, hotels, highrise buildings and business households had agreed to save 5 to 10 per cent of their consumption demands. The power companies said they provided guidance on energy-saving measures to

households in the city. During this period, the city also reduced public-lighting consumption by 45 per cent. Of the total number of 60,980 public lamps, only 33,476 are now in use. In addition, the city’s electricity sector has encouraged households to replace incandescent lamps with energysaving compact fluorescent lamps and use solar-powered hot-water machines.

Vietnam’s largest hydropower plant progresses

10 AUGUST/SEPTEMBER 2010 POWER INSIDER

smoothly

Engineers on Friday successfully installed the rotor of the first turbine of the Son La Hydropower Plant to enable the country’s largest plant of its kind to start running on December 25 as scheduled. Engineers on Friday successfully installed the rotor of the first turbine of the Son La Hydropower Plant to enable the country’s largest plant of its kind to start running on December 25 as scheduled. With a diameter of 15.589

meters, a height of 2.816 meters, and weighing 1,000 tons, it is the heaviest rotor of hydro-electric power plants in Vietnam. According to the Son La plant management board, the rotor installation will be followed by a test run of equipment of the plant’s auxiliary systems in the next two months. The first turbine group will undergo a test run from November 15 to 30 before generating power on December 25,

2010 as planned. The Son La power plant has six turbines designed to have a combined capacity of 2,400 MW. As many as 17,996 households in Son La, Dien Bien and Lai Chau provinces have relocated to give land to the Son La plant, which has a total investment capital of over VND42.47 trillion ($2.2 billion). The power plant is expected to be completed by 2012.

Turbine Cavitation Diagnostics and Monitoring Based on Korto Multidimensional Technique If you have troubles with cavitation in your turbines, you might be interested in the cases described below. If you recognize any of the situations as yours, we would like to hear from you and wish to tell you more. You want to optimize operation of your tubine. You know its efficiency characteristics pretty well, but you also wish to keep cavitation under control. We can supply you with reliable cavitation data such as this on the big Francis unit at Grand Coulee HPP in USA. To do so, we make a test as described on the opposite side of this leaflet. In addition to the global cavitation characteristics such as this, we deliver diagnostic details on cavitation. These show what should be changed in a turbine in order to improve its cavitation performance.

Turbine efficiency

Power distribution

Erosion rate

Erosion rate distribution Power (MW)

Cavitation intensity

You have more units in the plant. You know that, even if considered identical, the turbines might differ in cavitation performance. You wish to quantify this in order to optimize the load distribution and achieve a minimum of the total cavitation erosion. This example of the six Francis turbines at Burfell HPP in Iceland illustrates these differences. Here, for each of the units, cavitation intensity is shown above turbine power and guide-vane number, which reveals the influence of the position within the spiral casing. On different turbines, the cavitation-threshold power values differ up to 10 %, and the total cavitation intensity 3:1.

Guide vane

Power (MW)

You plan to adjust or re-adjust the cam in your Kaplan turbine, and you wish to know how do the changes in the cam influence cavitation. Here an example from Kembs HPP in France.

Cavitation intensity

Original cam

Optimized cam

Power (MW)

You wish to check the quality of the internal geometry of your turbine with respect to cavitation. Is the shape of its flow-directing parts good enough? This result of a test on the Kembs turbine points to more pronounced cavitation behind some parts of the spiral casing, and reveals, in these positions, anomalous cavitation on the highest power values. Operating conditions of your turbine are quite variable. Making tests in all the P conditions would be time-consuming. S S S S You wish to have your own tool for the online cavitation assessment. For this, we deliver cavitation monitoring systems. They consist of, typically, 6 cavitation sensors S and one cavitation processor P per unit. Here, Korto multidimensional cavitation monitoring algorithm is implemented in the FPGA/RT technology. Such systems can be used as cavitation channels of a general plant monitoring system or, with addition of one PC per plant, independently. 100

Cavitation intensity

You have a cavitation monitor and wish to quantify the influence of other units on the cavitation in the monitored turbine. Here, such a result for Francis units at Belesar HPP in Spain.

One unit in operation

Two units in operation

The cavitation monitors also yield the accumulated cavitation intensity which estimates the accumulated cavitation erosion. This enables predictive maintenance with respect to cavitation.

0 82,5

83,5

Power (MW)

Korto Cavitation Services Luxembourg

home@korto.com www.korto.com

SOLAR POWER

ROUGH TIMES IN THE SOLAR POWER INDUSTRY BUT CAN ASIA BECOME A NEW SOLAR POWER HUB? The global solar power industry is currently going through turbulent times. In the last few months, reviews of previously planned expansion programs, restructuring, lower revenue and profit forecasts, and cuts in production levels by solar power companies were widely covered in the news.

12 AUGUST/SEPTEMBER 2010 POWER INSIDER

he key reason cited by industry participants was the weakened demand for solar power projects in major markets like Europe and the United States as a result of the global credit crunch. This has resulted in the current production overcapacity of solar panels, especially in Europe and the United States. There is also considerable pressure on industry participants to streamline their internal operations in order to cut costs, as well as to improve their bottom line performance. Recent industry happenings in leading global companies include: • In March 2009, the thin-fi lm manufacturer, Energy Conversion Devices, Inc. slashed its third-quarter revenue view, withdrew its 2009 outlook, and announced a slowdown in its expansion plans. As a cost-cutting measure, the company also introduced temporary shutdowns across several factories in their international locations. • In April 2009, the German PV manufacturer and solar projects developer, Conergy, issued a warning over its sales fi gures for 2009. • BP Solar International Inc. is currently reviewing its involvement in the solar power industry, divesting some of its component manufacturing facilities while increasing its exposure in the panel manufacturing and turn-key projects. In other words, the current financial crisis has lowered the amount of funds available for highcost solar power projects, forcing many companies to re-evaluate their position in the key solar power markets (Europe and the United States), as well as to re-focus their strategic moves. However, the recently announced economic stimulus packages across the Asia Pacific (APAC) region could lead to new waves of demand for solar power projects, resulting in a shift of demand from traditional strong markets of Europe and the United States to the Asian heavy weights such as China, Taiwan, South Korea, India, and Australia. These economic packages have strong potential to turn around the solar power industry in the short to medium term. • In China, the May 2009 proposal of the $440 billion stimulus package put forth a slew of measures for improving renewable energy use. The proposal has put solar power as one of the key green energy resources to be developed in the near future. A number of solar power projects are already under construction throughout the country. The upcoming solar power installations have the potential to surpass the original 2020 target of 1.8 GW by up to 10 times, reaching between 10 GW and 20 GW over the next 10 years. • In Taiwan, a proposal was passed in April 2009 for around $1.3 billion to support research and development (R&D) and the installations in green energy technologies. As part of this proposal, the government has highly prioritized the development of solar power projects, including the installation of Asia’s first large-scale solar power plant. • In November 2008, South Korea unveiled

an economic stimulus package of $11 billion out of which at least 81.0% was directed toward developing green energy projects. This included the installation of several large-scale solar power plants throughout the country. South Korea’s topography combined with favorable supporting policies from the government is likely to propel the solar power market in a significant way. • The renewable energy ministry in India has introduced a new program targeting the solar power market where projects up to a maximum capacity of 50 MW would be supported by fi nancial incentives. This program is expected to give a major fillip to the solar power market in India. • The Australian Government has announced a proposed investment of around $1.2 billion for the Solar Flagships program, including the construction of four utility scale grid-connected solar installations totaling 1,000 MW by 2015. It is still unclear whether these installations would be solar photovoltaic or solar thermal. Moreover, the funding toward residential solar collection projects, including the Solar Homes and Communities Program, is likely to sustain the momentum. • With the support of the recently announced government stimulus packages, Asia’s solar power market leader, Japan, has the potential to increase its solar power generating capacity 20-fold by 2020 compared to the 2005 level where installed capacity was 1,422 MW. Countries in the APAC region are turning the corners to put solar power among other renewables high on the governments’ agendas. Strong commitment from the governments focusing on solar power R&D and project installations starting from small-scale residential solar projects

to large-scale utility-sized solar power plants - will offer huge opportunities for companies across the value chain. Besides, global solar power companies continue to be attracted into setting up their manufacturing facilities in many of these Asian countries because of the low cost of production and easy availability of skilled manpower. Existing and upcoming solar panel manufacturing facilities located in the APAC region can channel their production output to cater to the booming local market demand. Until now, most of these facilities have been set up to satiate the thirst of major markets in Europe and the United States. By increasing the proportion of domestic market sales, many multinational solar power companies with manufacturing plants in the region can effectively deal with the production overcapacity problem faced in the United States and Europe. Finally, in the solar industry value chain, the global economic recession has severely impacted small companies with weak cash flows. As a result, large solar power companies are looking at the vertical integration option in order to strengthen their competitive edge as they are currently in a better position to acquire many smaller participants. For instance, Suntech Power, a China-based solar power company, acquired stakes in several photovoltaic technology companies in 2008 as a part of its expansion strategy. Consolidation in the solar power industry will help companies to realize the benefits of economies of scale. This, in turn, will provide a major boost to the solar power market in Asia. With their strong domestic market demand, presence of low-cost manufacturing plants, and increasing industry consolidation, Asian countries presents a plethora of growth opportunities for solar power companies. With some of these developments already underway in the region, it would be interesting to observe how Asia emerges to be the new solar power hub.

This article was authored by Irina Sidneva, Program Manager and Suchitra Sriram, Industry Analyst, Asia Pacific Energy & Power Systems Practice, Frost & Sullivan. Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company’s Growth Partnership Service provides the CEO and the CEO’s Growth Team with disciplined research and best-practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com. Media contact, please email djeremiah@frost.com or carrie.low@frost.com

POWER INSIDER AUGUST/SEPTEMBER 2010 13

SOLAR POWER

A LIGHT TECHNOLOGY

AN ALUMINIUM MOUNTING SYSTEM REDUCES THE WEIGHT OF A SOLAR ENERGY SYSTEM TO ONE THIRD. Aluminium is three times lighter than steel. It is also strong and resistant to corrosion. These are only some of the qualities that make aluminium profiles an interesting alternative to heavy steel structures in the design of mounting systems for solar energy systems – from photovoltaics (PV) and thermal collector systems to new concentrated solar power (CSP) plants.

ightweight, durable – and stylish! That’s aluminium in a nutshell. Just think what rims, fridge doors or notebook computers would be without it. Due to its unique combination of favourable material qualities, aluminium continues to conquer new areas of application throughout the world. As demands grow of aesthetically pleasing public urban environments, aluminium emerges as the material of the future, combining favourable mechanical properties with a smooth and neat surface finish. Thanks to their superior corrosion resistance, aluminium profiles remain shining year after year.

14 AUGUST/SEPTEMBER 2010 POWER INSIDER

TRUE BENEFITS VIRTUALLY UNEXPLOITED Aluminium weighs only one third of steel. Yet it is strong and durable enough to be suitable in a wide range of areas of application where steel, by tradition, still is the dominating material. One such application is mounting systems for solar energy systems. These metal structures are used to attach e.g. PV modules or thermal collector systems to the ground or to the rooftop of a building. Replacing their steel structures with aluminium reduces the weight of solar energy systems to one third. In Germany, the leading European solar market,

aluminium has long been the dominating material in mounting systems. The technology has proven to provide excellent long-term strength and durability in installations throughout the country. SAPA – GLOBAL LEADER IN ALUMINIUM PROFILES As a leading provider of aluminium profiles, and with the world’s largest installed base of aluminium structures for solar applications, Sapa helps the solar industry to build lighter products that offload rooftops, simplify on-site handling and streamline transportations.

POWER INSIDER AUGUST/SEPTEMBER 2010 15

solar power

The global solar industry is expanding rapidly. And as solar energy projects are growing in scale, so does the quantity of material required for their mounting systems. Sapa is one of only a few suppliers capable of providing today’s increasing volumes of aluminium profiles and structures, even for large solar farms. offloading rooftops Rooftop-mounted PV systems and thermal collector systems for power or heat generation are becoming increasingly common, both on residential and commercial buildings.There are, however, concerns about roof strength since many houses weren’t dimensioned to withstand the additional load of these units. Flat rooftops on factories or other commercial buildings are popular spots to place solar energy systems. Aluminium mounting systems allow companies to exploit their available roof space more efficiently – resulting in larger energetic benefits. Low weight also means easier and more secure installation, especially on slanted rooftops. Sapa is also exploring new packaging solutions to further simplify rooftop installation. For example, a customer in Germany receives all the components necessary to mount their solar energy systems packaged in Ikeainspired boxes – reducing installation times. 16 august/september 2010 power insider

easier fieldwork Labour costs and material handling costs are major expenses as solar energy farms are growing on a global basis. Every stage of the field mounting process that requires the use of machining adds to total costs, including machinery rental costs, contractor costs and operator costs. Aluminium mounting systems can help to reduce these escalating costs substantially. Due to the low weight of aluminium, even relatively large structures can be handled manually on site. Besides cutting costs for machinery and personnel, this helps reduce mounting and installation times in the field. Sapa also offers to pre-assemble a smaller or larger part of a mounting system to relieve customers of time-consuming assembly work in the field. ready to use without further processing Suppliers of mounting systems can reduce their manufacturing costs by handing over the task of fabrication and machining of profiles to Sapa. Customers can choose to have their profiles delivered surface treated, e.g. anodised or powder coated; machine processed e.g. drilled, cut or bent; or pre-assembled to larger aluminium structures. Sapa also offers engineering services to help

customers optimise their mechanical designs and thus streamline production processes. Customers may, for example, be recommended to bend a long aluminium profile instead of welding several steel parts together – achieving the similar design properties at a lower weight and production cost. Using optimisation software, we can perfectly dimension the use of materials to achieve maximum cost efficiency for each customer application. smart transportation solutions Growing amounts of solar energy equipment call for environmentally sound and cost-effective transportation solutions. In the case of aluminium, the logic is as obvious as the logistic benefits it brings: each truckload can carry up to three times as many aluminium parts as the corresponding steel parts. Innovative packaging solutions make it possible to transport more complex structures without compromising on transportation efficiency. In large projects, involving thousands of tonnes of material, streamlined transportation methods can save a lot of money while reducing the environmental impact. Venturing the expansiVe csp industry Sapa is positioning itself as a leading provider of

mounting system structures to the expanding CSP market. Parabolic troughs currently dominate the market, and Sapa has made several deliveries to leading manufacturers in recent years.

Concentrated solar power (CSP) A CSP system focuses sunlight into a small beam that heats fluid used as a heat source for a conventional power plant. Steel is conventionally used for parabolic steel applications. However, aluminium is gradually gaining ground thanks to its lower weight and favourable material properties, eliminating the need for welding when mounting the trough. Aluminium is strong enough to maximise the precision and focusing of the sunlight, ensuring an efficient use of the sun’s heating effect. Low weight simplifies fieldwork as more operations can be carried out manually. The success of a CSP project depends greatly on the quality of the logistics solution. The timely delivery of thousands of tonnes of material places strict demands on transportations. Smart design concepts combined with the low weight of aluminium allows Sapa to deliver more units per truckload than using steel.

ABOUT SAPA Sapa is the world’s leading provider of extruded aluminium profiles. The group is established in China since 2004 and intends to expand into South-East Asia through a joint venture with the Vietnamese Ben Thanh Group. Sapa is focusing strongly on providing solutions to the fast-growing solar industry. Sapa has the world’s largest installed base of aluminium structures for solar applications. In 2009, the installed power of PV systems using Sapa aluminium frames exceeded 500 MW. The corresponding figure for PV mounting systems was more than 1,500 MW. The group’s solar business is growing fast. Between 2008 and 2009, the business almost doubled. By mid-2010, sales have already exceeded the full-year

sales of 2009, underlining the continuous expansion and success of Sapa’s solar business. Sapa’s offering to the solar industry includes solutions for photovoltaics (PV), thermal collectors, mounting systems, solar inverters and CSP plants. We provide aluminium profiles, mounting devices and other appliances necessary for easy mounting. We can assist customers throughout the lifetime of their applications, from design specification to logistic support. Håkan Lindor Solar Market Area Manager Sapa Profiles hakan.lindor@sapagroup.com www.sapagroup.com/solar

POWER INSIDER AUGUST/SEPTEMBER 2010 17

solar power

18 august/september 2010 power insider

alice springs

The hearT and solar cenTre of ausTralia Located in the arid desert region in the heart of Australia, the small town of Alice Springs, with a population of 28,000 is normally best known as the jump off point for one of Australia’s best known natural icons, Uluru (also known as Ayers Rock). Located about 500 km to the south west (considered a short distance in the vast reaches of the Northern Territory Outback) Uluru attracts some 400,000 visitors per year. Over the last few years though, Alice Springs has been attracting attention for another reason – its development of world-leading expertise in its use of one of the regions other natural and abundant resources - solar energy. By Brian Elmer General Manager, Alice Solar City.

he central Australian region receives more sunlight than any other region in Australia, with over 7 kWh/m2/day of incident radiation, according to the Australian Solar Radiation Handbook 1994. Furthermore, whilst the local solar resource is high, the arid climate which varies from blisteringly hot summers and sub-zero evening temperatures in winter - results in electricity consumption which is above the Australian average in homes and businesses. These are just some of the reasons that Alice Springs was chosen to participate in the Australian government-funded energy efficiency pilot programme, known as Solar Cities. Under the Solar Cities programme, which was launched in 2004, seven cities throughout Australia were chosen to participate, with each Solar City delivering a unique trial covering a combination of: • energy efficiency measures; • solar energy technologies; • energy pricing trials; and, • smart metering technologies. The other Australian Solar Cities are Townsville (north Queensland); Blacktown (West Sydney); Coburg and Bendigo (Victoria); Adelaide (South Australia) and Perth (West Australia). The Alice Solar City project (www.alicesolarcity. com.au) utilises a combination of innovative community engagement programmes, alongside high and low technology interventions and measures to empower the community to make informed and intelligent use of energy. In essence, the project aims to change the way residents think about, and use energy. Launched in 2008, the Alice Solar City project is led by the Alice Springs Town Council, and is supported by a Consortium of local organizations. A important and highly successful element of the community engagement strategy was the development of a Smart Living Centre – a ‘shopfront’ on the main street of town that has been fitted out with a wide range of interactive

Large heat pump water heating system install in local hotel

displays and other information on saving energy. The Centre serves as a hub of activity, and allows for face to face engagement with between the public and Project staff. In just two years, the project has already attracted more than 20% of the town households to participate in the voluntary residential programme, as well as more than 100 local businesses. Each participant receives a free, comprehensive, energy audit and a tailored energy saving report. The project also offers residents and businesses funding to implement measures identified in their audit. The Project has directly supported the installation of 277 solar power systems (supplied by BP Solar) and 450 solar hot water systems (supplied by Solahart) on residential premises. Other measures supported include low tech, simple measures like painting roofs white - highly effective in reducing

heat loads on buildings during the extended summer season when temperatures typically reach 40oC (104oF) - to insulation, energy efficient lighting and window tinting. A range of other interventions and measures are being tested to ascertain their ability to influence energy use behaviour, including smart metering, peak and off-peak tariffs and interactive in-house displays of electricity use. The in-house displays communicate wirelessly with the smart meters, showing a range of information on occupant electricity consumption patterns, and where solar PV systems are installed, this is overlaid with solar generation data. This important element of the project aims to test whether having detailed live and historical information on electricity consumption available to consumers will lead to longer-term changes in their behaviour, load shifting and overall power insider august/september 2010 19

solar power

interactive in-home energy display

reductions in energy use. Located over 1500 kilometres from the national electricity grid, like many towns and communities in remote Australia, Alice Springs is serviced by its own local mini grid, with gas and diesel being the fuel sources of a total local generation capacity of around 65 MW. Local electricity retailer, Power and Water Corporation are key partners on the project, keen to assess the impact of these technological and consumer engagement interventions, as well as a range of cost reflective electricity tariffs designed to encourage consumers to shift load to off-peak times.

iconic solar energy installations In addition to the residential and commercial streams, Alice Solar City has supported and encouraged the development of major ‘iconic’ projects in and around Alice Springs that will play a critical part in the strategy of making Alice Springs a national and international showcase for sustainable living and the use of renewable energy. These projects will demonstrate large-scale renewable energy technologies, including a variety of cutting edge solar photovoltaic concentrator and solar thermal technologies. In April 2010, work commenced on the second of the five ‘iconic’ solar energy projects being developed as part of Alice Solar City, a 235 kW solar photovoltaic installation at the Alice Springs Airport. The project came about after Alice Springs Airport undertook a formal Request for Proposals (RFP) to the national solar energy industry in mid-2009 to identify suitable solar technology options. Whilst cost (value for money) as measured by cost per kWp installed and cost per MWh delivered, were key factors, similar weighting in the assessment of responses was given to technology type and status, that is the ‘iconic’ nature of the technology, environmental

suitability, reliability and maintainability. Queensland-based Ingenero Pty Ltd was selected to install the 235 kW solar power station, comprising 28 SolFocus SF-1100 concentrating photovoltaic (CPV) dual axis tracking arrays. Each array is rated at 8.4 kW peak power and measures eight metres wide and seven metres high. According to Ian Kew, chief executive officer of Northern Territory Airports: ‘Alice Springs will be the first Australian airport to have a large-scale (over 100 kW) photovoltaic system providing a direct source of renewable energy to its internal grid. It will be on display to travellers, visible from both the ground and the air.’ CPV technology is particularly effective in areas of high Direct Normal Incident radiation (sunny locations) like Alice Springs. The system is expected to produce around 600 MWh annually, equivalent to around 28% of the airport’s annual electricity demand. Total value of the project, which is expected to be completed by August 2010, is A$2.264 million, with 50% funding being provided from the Australian government as part of Alice Solar City project and the balance funded directly by Alice Springs Airport. SolFocus intends to use one of the 28 airport arrays as a research and development tool

‘Technological developmenT promising safer and cleaner nuclear energy and growing carbon emission fear combined wiTh noToriously unpredicTable price of fossil fuels have been rising nuclear power from iTs ashes.’ 20 august/september 2010 power insider

to help gather data and test new products in Alice Springsâ&#x20AC;&#x2122; arid climate. An emerging solar technology, CPV systems are offering significant potential for cost reductions in photovoltaic (PV) installations. As opposed to traditional PV systems, which use a large amount of costly photovoltaic material, CPV technology use smaller amounts of semiconductor in conjunction with less expensive materials such as glass, plastic and steel, to capture sunlight and direct it onto a very small PV cell.

peter paul of scrubby bore community in far north Queensland with his bushlight system

Whilst this will be the first deployment of the Solfocus technology in Australia, it is not the first CPV system to be installed in the Northern Territory. There are existing CPV systems installed in several remote Aboriginal communities whose power was exclusively supplied by Power and Water Corporation diesel mini-grids. These use technology developed by Australian pioneers, and now defunct company, Solar Systems Pty Ltd. A total of 30 Solar Systems CPV dishes are installed across three sites across the Northern Territory, collectively reducing

diesel consumption by about 500,000 litres a year. The Alice Springs Airport project will be the second iconic project to be completed in Alice Springs, following the 304 kW solar PV system installed on the roof of the Crowne Plaza Hotel in 2009. Using SunPower flat plate technology, the Crowne Plaza installation was at the time of completion the largest roof-mounted gridconnected PV installation in Australia. The other iconic projects being developed under the auspices of the Alice Solar City programme showcase two different solar technologies and applications. For example, the new Aquatic Centre currently under construction will be one of the largest solar pool heating systems in Australia. A total of 275 collectors will provide heating for the new swimming pool, cutting gas consumption by at least 30% or the equivalent of 3454 GJ per annum. A solar farm just shy of 1 MW in size is also under development, with construction expected to commence in the second half of 2010. Utilising a single axis flat plate tracking array, the output of the 963 kW solar farm will be sold to local electricity retailer, Power and Water Corporation which will in turn sell on this energy as part of a â&#x20AC;&#x2DC;greenâ&#x20AC;&#x2122; tariff to residential and commercial customers. Once completed the solar farm project will be the largest tracking photovoltaic system installed in the Southern Hemisphere. HigH grid penetration The overall amount of activity in this small town over the last few years is impressive, with residential power insider august/september 2010 21

solar power and commercial sectors seeing 320 individual solar systems installed to date, with total installed capacity of approximately 1.1MW. When the total capacity of existing and planned iconic systems is completed, around 2.3 MW of distributed solar generation will be in embedded in the town’s local electricity grid. With a total capacity of around 65 MW, and winter/summer daytime loads ranging from 25 MW – 55 MW, this represents one of the highest penetrations of solar energy generation on a network of this size in Australia, if not the world. It is further anticipated that a local campaign to encourage further uptake of rooftop solar entitled 1000 roofs in 1000 days (which is aiming to achieve 1000 solar installations by the 1000th day since the Alice Solar City project launched) will add further to generation to the local network. solar technology demonstration centre Alongside the Solar City initiative, Alice Springs is also home to the world class Desert Knowledge Australia Solar Centre. The aim of the Solar Centre is to demonstrate a wide range of solar energy technologies and applications and compare their performance in the desert environment. Photovoltaic technologies installed at the Solar Centre include traditional mono crystalline, polycrystalline and amorphous modules in a range of configurations; cadmium telluride thin-film; copper indium gallium selenide; and HIT (Heterojunction with Intrinsic Thin Layer) panels. In addition to these cutting edge technologies, a number of the arrays on display are mounted on single and dual axis tracking units as well as tracking concentrating PV systems with gallium arsenide (GaAs) V-III cells. A unique feature of the Solar Centre project is that the performance of all the installed technologies at the Solar Centre is being independently captured, with both live and historical output data, and is freely available on display at the interactive website: www.dkasolarcentre.com.au. Given the extremes of climate (very hot, dry dusty summers and sub-zero temperatures in winter) the Solar Centre is seen as the ideal location to demonstrate these latest generation tracking technologies and evaluate the cost benefit of tracking Residents of Hatches Creek community in Central Australia in front of their new Bushlight solar array

systems when compared with fixed mounting systems. The facility managers and engineers, CAT Projects, have received consistently positive feedback about the facility and are in negotiations with a number of companies to establish further commercial test installations. Lyndon Frearson, general manager of CAT Projects explains: ‘We have over two thousand people regularly accessing the raw data, as well as over 200 people a day accessing the graphical part of the website – users include, venture capitalists, investment banks, utilities, engineering consultancies, universities and government agencies. This clearly reflects the significant interest in the Solar Centre and the value of the data that is being produced. It is a truly unique installation for both Australia and indeed the world.’ In addition to the Alice Solar City initiative, Alice Springs is the home of the award-winning Bushlight programme, developed by the Centre for Appropriate Technology, a local NGO working to improve the livelihoods of indigenous communities by increasing access to sustainable energy supplies. Bushlight (www.bushlight.org.au) works in the most remote regions of Central and Top End Australia, where communities are isolated by hundreds of kilometres of dirt roads, can be cut off by floods, and have no access to town water, power and other services that larger towns take for granted. Without reliable access to fresh food and refrigeration, fuel and qualified technicians, Australia’s remote communities need sturdy, innovative and interactive energy services. Prior to Bushlight, power supply in remote indigenous communities was typically unreliable, often not 24 hours/day and expensive. This had a range of negative social, environmental and health impacts on the communities. The programme addresses power supply in these remote communities by having a strong focus on community engagement in the energy planning process, and by designing robust, technically advanced stand-alone renewable energy systems. This approach operates through a dynamic partnership with local councils, resource agencies, community members and technical contractors. The process is supported by a range of culturally

appropriate resources designed specifically for local conditions. By involving the local community in the design and various aspects of the on-going maintenance of the power system, Bushlight has had significant success in improving this critical element of remote community life. Based on the success of the programme locally, Bushlight systems are now being exported to India. With operations commencing in July 2002, by 2010 Bushlight had installed 115 renewable energy systems, providing reliable 24 hour power to over 3000 people living in remote communities in Australia. Bushlight also provides a maintenance service to almost 250 renewable energy systems installed in indigenous communities. policy and legislative background Alice Springs is situated in the Northern Territory, a vast region covering central and northern Australia with a land area of some 1420 million square km (almost six times the area of UK) but which has a population of just 224,000. The Northern Territory has a small but rapidly growing economy, with minerals and energy, alongside tourism and agriculture as its main industries. Like many regions

22 august/september 2010 power insider

304kW solar PV system installed on Crowne Plaza hotel, Alice Springs

Desert Knowledge Australia Solar Centre

in Australia, the Northern Territory government recently released its own Climate Change Policy, which includes a headline aspirational goal of reducing carbon emissions by 60% by 2050, compared with a 2007 baseline. Of note, the policy calls for the Territory to become a world leading generator of renewable and low emissions power in remote communities and there are 55 remote communities that are currently serviced by diesel powered mini-grids. At the national level, the main instrument to

encourage the development and deployment of renewable energy technology in Australia is the Mandatory Renewable Energy Target (MRET). Commencing in 2001, the MRET placed a legal liability on wholesale purchasers of electricity to proportionally contribute to an additional renewable energy generation of up to 9500 GWh or around 2% of Australiaâ&#x20AC;&#x2122;s electricity demand. In August 2009, the government passed legislation to expand the MRET to ensure that renewable energy obtains a 20% share of electricity supply in Australia by 2020. To ensure that target is reached, the government has committed that the MRET will increase from 9500 GWh 45,000 GWh by 2020. The scheme lasts until 2030. The MRET provides renewable energy power stations and owners of solar water heaters and small generation unit installations (small-scale solar PV panels, wind and hydro electricity systems), with a financial incentive through the creation and trade of renewable energy certificates (RECs) via the REC Registry. Each REC - which represents 1 MWh of renewable energy generated from an eligible energy source - can be sold for a negotiated price and transferred to liable parties, usually wholesale

purchasers of electricity. An issue that has been hotly debated over the last year in Australia has been over the development and implementation of a national emissions trading scheme, referred to in Australia as the Carbon Pollution Reduction Scheme (CPRS). After legislation to introduce the CPRS was twice defeated in the Parliament, in April 2010, the Prime Minister announced that the government has decided to delay the implementation of the CPRS until after the end of the current commitment period of the Kyoto Protocol in 2012 and only when there is greater clarity on the actions of other major economies, including the US, China and India. Nonetheless,whilst the national and international debates continue over issues like emissions trading, the small town of Alice Springs in central Australia is moving forward in great strides to deploy solar energy technology and improve energy efficiency in homes and businesses. email: brian.elmer@alicesolarcity.com.au web: www.alicesolarcity.com.au power insider august/september 2010 23

CLIMATE CHANGE

ENERGY TECHNOLOGY REVOLUTION UNDERWAY IEA SEES THE FIRST EARLY SIGNS OF AN ENERGY TECHNOLOGY REVOLUTION UNDERWAY ACROSS THE GLOBE BUT URGES THAT MUCH MORE NEEDS TO BE DONE TO ACHIEVE THE NECESSARY LONG-TERM CO2 CUTS

By Nobuo Tanaka, Executive Director IEA.

24 AUGUST/SEPTEMBER 2010 POWER INSIDER

“

For several years, the IEA has been calling for an energy revolution to tackle climate change and enhance energy security and economic development. For the first time, we see early indications that such a revolution is under way,” said Nobuo Tanaka, Executive Director of the International Energy Agency (IEA). Presenting the new IEA study Energy Technology Perspectives (ETP) 2010 in Washington DC, he said “after sowing the seeds for such a revolution in our last edition in 2008 by demonstrating that greater reliance on low-carbon technologies can transform the way we produce and use energy, ETP 2010 now highlights the first ‘green shoots’ of what could become such a fundamental change.” Global investment in renewable electricity generation, led by wind and solar, reached an alltime high of USD 112 billion in 2008 and remained broadly stable in 2009 despite the economic downturn. Many major car companies are adding hybrid and all-electric vehicles to their fleets. Expanded production of such vehicles combined with the purchase incentives available in

many countries, could put more than 5 million such vehicles on the road in the next 10 years. In OECD countries, the rate of energy efficiency improvement has increased to almost 2% per year, more than double the rate seen in the 1990s. Funding for low-carbon energy research, development and demonstration (RD&D) has increased by one-third between 2005 and 2008, helping to reverse a declining trend that started in the early 1980s; with IEA countries and many other major economies aiming to double such investments by 2015. ETP 2010 demonstrates that all these efforts are vital if we are successfully to limit climate change; but current developments are still fragmented and fragile, and the rate of progress is still far too low to prevent dangerous increases in global temperatures.

“What we need is rapid, largescale deployment of a portfolio of low-carbon technologies; we need a massive decarbonisation of the energy system, breaking the historical link between CO2 emissions and economic output, and leading to a new age of electrification,” said Mr. Tanaka. Noting that 1.5 billion people still lack access to electricity, he stated “this adds tremendous urgency to electrification efforts worldwide.” The ETP2010 Baseline scenario shows, that without new policies, fossil fuels will continue to provide most of the world’s energy needs, with energy-related CO2 emissions almost doubling to 57 Gigatonnes (Gt) by 2050. In contrast, the ETP2010 BLUE Map scenario charts a least-cost path for halving global energy-related CO2 emissions by 2050 (compared to 2005 levels), consistent with a long-term temperature rise of 2o to 3o C. It also shows how the transition to a low-carbon economy will enhance energy security and support economic development. Under this scenario, the global demand for oil, for gas and for coal in 2050 would all be

lower than today, with world oil demand alone being 27% less than in 2007. For instance, oil demand in the United States and OECD Europe would drop by more than 60% and 50% respectively; in China oil demand would only increase to half the level seen in the Baseline scenario. Also, in the BLUE Map scenario, global oil demand would plateau around 2030-2035. This would mean less pressure on prices and reduced import dependency for many countries. “However,” Mr. Tanaka stressed “we should not forget that even with this lowcarbon revolution, fossil fuels still account for 46% of primary energy demand in 2050, meaning that we still will need significant investment in these fields. Top prioriTies for The near fuTure Increased energy efficiency will become the most important “fuel” of the future. Low-cost options for reducing actual consumption – many of which are already available – offer the greatest potential for cutting CO2 emissions over the period to 2050. This will require that current rates of energy efficiency seen in OECD countries are replicated across the world and maintained over the next 40 years. Decarbonising the electricity sector, the secondlargest source of emissions reductions, must involve dramatically increasing the shares of renewables and nuclear power, and adding carbon capture and power insider august/september 2010 25

climate change

storage (CCS) to plants that consume fossil fuels. By 2050, renewable electricity generation would need to represent almost half of electricity generation up from 18% today. More than 30 new nuclear power stations and 35 coal-fired plants fitted with CCS would be needed on average every year to 2050. A decarbonised electricity supply, combined with smarter grids, would then offer substantial opportunities to reduce CO2 emissions in end-use sectors through increased electrification (for example, through the introduction of electric vehicles and efficient electric heat pumps). Under BLUE Map, by 2050, more than 50% of all light duty vehicle sales worldwide are either plug-in hybrid or all-electric vehicles.

effort; while OECD countries should take the lead, all major economies need to be involved,“ Mr. Tanaka stressed. ETP2010 shows that to achieve CO2 emissions reductions at least-cost, OECD countries must reduce their emissions by 70-80% from today’s levels, non-OECD countries must also collectively make CO2 reductions of around 30%. Accelerating the spread of low-carbon technologies across the world is therefore a critical challenge, particularly in the largest, fast-growing economies such as Brazil, China, India, the Russian Federation

and South Africa. ETP 2010 shows that several emerging economies, led by China, are becoming major technology developers, manufacturers and exporters. “This shift is vital to ensuring a truly global energy technology revolution – a revolution that is crucial to economic development, energy security and environmental protection,” said Mr. Tanaka. “By providing concrete guidance, ETP 2010 aims to prompt broader engagement of all players and sectors, and achieve the necessary step-change in the rate of progress.”

Huge investment required, but will deliver HigH returns The cost of achieving the “50% by 2050” goal of the BLUE Map scenario will be USD 46 trillion more than the Baseline scenario over the period to 2050. Most of this reflects additional spending by consumers on more efficient and low-carbon end-use equipment, particularly for vehicles. Yet importantly, ETP 2010 demonstrates that over the same period, very positive returns on investment could be achieved with fuel savings alone of USD 112 trillion, along with other economic, social and environmental benefits. more effective models for tecHnology diffusion “Reducing CO2 emissions will require a global

‘By 2050, renewaBle electricity generation would need to represent almost half of electricity generation up from 18% today. more than 30 new nuclear power stations and 35 coal-fired plants fitted with ccs would Be needed on average every year to 2050.’ 26 august/september 2010 power insider

H U LT É N R E K L A M B Y R Å

Three times lighter Aluminium is replacing steel in more and more applications. No wonder. It is three times lighter than steel. But there is more to it than just weight. Strength, finish and resistance to corrosion are other important features. Solar energy is one of the fastest growing areas for aluminium profiles. For example, heavy steel structures in mounting systems are replaced by lightweight aluminium to offload rooftops, simplify on-site handling and reduce transportation costs. As the world’s leading manufacturer of aluminium profiles, Sapa enjoys a strong position in the solar industry as well. How can we light up your business?

www.sapagroup.com/solar

wind power interview

wind power opportunities interview with dr. anil kane, head of wwea

piM: Can you tell our readers a little bit about yourself and your baCkground in the renewable energy seCtor? AK: I am in the Renewable Energy Sector for last 40 years and very active particularly in wind sector for the last 25 years. I had been instrumental in putting up a commercial wind farm, first time in India in 1985. The wind farm is still in operation. I have a Doctorate in Mechanical Engineering, a Law Degree in International Law and a Business Management Diploma. I have used all these academic background in furthering the renewable energy cause. I also have served as the Vice Chancellor of a very large and prestigious Indian University called The Maharaja Sayajirao University of Baroda where also I tried to incorporate some courses in Renewable Energy. 28 august/september 2010 power insider

As one of the Board members of Gujarat Energy Development Agency (GEDA), I served for about 6 years. GEDA is a nodal agency to promote renewable energy in Gujarat. piM: being the head of the wwea for 5 years must have been a great Challenge, but what have been the major developments in wind energy in asia & paCifiC in the last 3 years? AK: This is my third term as the World Wind Energy Association President and the main job is to keep all the people around the world together in carrying out some positive work in Renewable Energy sector particularly in wind. By and large, I have succeeded in delivering the goods keeping people of different geographic location and different temperaments together. Asia was far behind before 5 years and Europe was leading. But two sleeping giants China and

India have woken up and have been progressing extremely well. Chinaâ&#x20AC;&#x2122;s progress is unbelievable. Now other countries like Pakistan, Thailand, Korea, etc. are also gearing up and I foresee a quantum jump in the next few years. China has got a Renewable Energy law in place, which has given a boost. India has already drafted such a law and is in the process of making it formal. The Feed in Tariffs are in place in various countries which has given boost to the wind sector. piM: in terms of Countries in asia, where do you see the largest opportunities for regional and international businesses? AK: Without doubt, the largest opportunity exists in China followed by India for regional as well as international business. Both these places are becoming the manufacturing hubs for wind

renewable sector. Today the capital cost of solar is about 3.5 to 4 times higher than wind and therefore, it can only come up at quite different applications and on a smaller scale, like on individual rooftops and for offgrid applications where solar PV is actually competing with small wind turbines. Very large wind turbines are being manufactured now which has also brought down the per kW cost of installed capacity. When the cost of solar panels drops dramatically, maybe due to mass production, then it will be a very good situation for solar and also for mankind. Big R & D efforts are taking place around the world.

turbine equipment. Relatively the labour costs are cheaper and today the Chinese and Indian products are the cheapest in the world without compromising the quality. piM: What assistance is currently available to aid in the implementation of rural electrification projects in asia? AK: Currently there is not much assistance available to aid the implementation of rural electrification project in Asia This is a serious matter and we are trying to encourage governments to pay their attention in this neglected field. The WWEA is also working on creation of funds with leading banks to help Feedin Tariff implementation in developing world. Here we will be stressing the rural requirement. piM: do you believe that offshore Wind offers good opportunities in asia? AK: I believe that offshore wind sector has good opportunity in Asia. Wherever there is a large continental shelf and a good wind, the offshore can succeed. India, China and other Pacific Rim countries have such geographic locations and after gaining some good experience on land, all of them will venture for offshore. Solar & Wind are by far the most well known & well used in the renewable sector, but with a backlash in some countries against wind farms, do you think other technologies will have the upper hand. What are the advantages and disadvantages of wind power over other technologies? I have not come across any â&#x20AC;&#x2DC;backlashâ&#x20AC;&#x2122; in any country against wind farm. There may be some very small local problems, but by and large, there is no major issue. At lease today, wind has no commercial competition with any other

piM: globally, What efforts are being made With regard to legislation to secure energy supplies and mitigate the risks of climate change? AK: The entire world has now realised that fossil fuel is limited and pollutes the atmosphere and if we have to leave the world in better shape than what we have inherited from our forefathers then there is no other alternatives, but to depend on Renewable Energy. Effective policies for the promotion of renewable energies are now getting very strong support and almost all countries have put up targets. More and more developing countries have put up ambitious targets, the EU has set up a target of 20% renewable energy by 2020 and other countries are also following the suit. Some countries in Europe have reached already up to 40% and more and more politicians aim at a 100 % renewable energy supply. Luckily the total potential of wind alone is extremely high. Only if 20% of the wind energy is tapped from the best locations of the world, the Stanford University have calculated that, the wind sector can generate energy equivalent to 54,000 million ton of oil equivalent. This can meet the entire energy demand of the world in future. If we consider capturing wind energy from low wind velocity region by modern technology and also go offshore, the sky is the limit and the mankind has not to worry about fossil fuel problem. I very strongly believe that the fossil fuel should not be used at all for creation of energy by burning. Fossil fuel must be spared for our next generations to produce high value added petro chemicals and essential fertilizers. Because, these two things cannot be produced, at least today, by any other means except converting from fossil fuel. piM: What are your predictions for the future groWth of Wind energy? What exciting developments do you expect to see? AK: I am very optimistic about all wind sectors in the world. We have made a prediction shown in the graph (below). I am glad to say that all our predictions, we made in past, have been surpassed and this trend is definitely going to continue. I have been making the statement in my lectures that ultimately wind energy is going to come to the rescue of mankind for all its energy needs of future. I very firmly believe in my statement.

projection up to 2020

The future developments are going to be conducive for covering the rural areas and areas where there are no grid connections and also areas which have lower wind velocity. Wind turbines of different designs are being attempted to meet this requirement. Simultaneously, when we develop machines for low wind velocity and scattered areas, the essential requirement will be to develop large capacity and cheap electrical energy storage systems. This is an essential part when we try to cover non-grid connected areas like islands and remote locations. Very large numbers of people are carrying out scientific research to develop very large electrical storage systems using new and unconventional methods. In Japan, a 51MW wind farm has got a huge storage system for 35MW. More and more electrical cars are getting popular and if substantial number of cars become electrically operated cars, then the summation of all the storage batteries of millions of cars become a substantial storage for wind generated power. Very large population of electric cars will become necessary to avoid pollution as well as to augment storage of electrical energy. piM: What do you think can be done to ensure high efficiency, reliability and availability in the energy sector? AK: As discussed in the point above, the fluctuating energy production by wind will have to be supported by a storage system and smart grids to make the supply and demand curves matching one another. This also will help when the efficiency and reliability of the turbines further improve. This is a continuous process of development and it is still far below the zenith. piM: and finally What are your vieWs on asia as a market for international companies looking to penetrate the Wind market? AK: Asia, as discussed earlier, is going to be the largest market in next few years and already all the multi national companies in the wind sector have started their manufacturing activities in both the countries like China and India. All the giants in the wind sector like Vestas, Enercon, Sinovel, Goldwind, Suzlon, RE Power, GE, Siemens, Gamesa, etc. have already established in Asia All these giants have definitely done their home work and found it profitable to come to Asia and I also agree with their findings. power insider august/september 2010 29

RURAL ELECTRIFICATION

RURAL ELECTRIFICATION IN EMERGING ECONOMIES PImagazine talks with the IEA to look at how emerging Economies can effectively implement Rural Electrification

ince the G8 Gleneagles Summit in 2005, the International Energy Agency’s (IEA) Networks of Expertise in Energy Technology (NEET) Initiative1 has sought to encourage further involvement of major emerging economies in the IEA Technology Network comprising international energy technology and R&D collaborative programmes. Missions and workshops when feasible have been organised in the so-called “Plus-Five” countries, namely Brazil, China, India, Mexico and South Africa. These outreach efforts have been geared towards identifying areas of mutually desirable and potential future collaboration between experts of these major emerging economies and the IEA Technology Network including the Committee on Energy Research and Technology (CERT), Working Parties (WP) and Implementing Agreements

30 AUGUST/SEPTEMBER 2010 POWER INSIDER

(IA). Rural electrification has been singled out as a potential field for international collaborative activities within the IEA framework. Policy makers, industries and R&D institutions in the targeted economies have all expressed interest in discussing with one another and with international experts, in exchanging their experiences, lessons learned and continuing challenges in their efforts to bring energy services to the rural world. In response to this interest, the IEA has begun exploring its role as facilitator of international exchanges on energy technologies and policies for rural electrification in developing economies. In May 2008, the IEA hosted a workshop on “Sustainable Rural Energisation in Major Emerging Economies”, in collaboration with the Gesellschaft für Technische Zusammenarbeit (GTZ) and with the support of the United

Nations Environment Programme (UNEP) and the Renewable Energy Policy Network for the 21st Century (REN21). The goal of this workshop was to explore opportunities for extending IEA’s collaborative activities to better respond to the major emerging economies’ interest in international collaboration on rural energisation. Delegates from eleven emerging economies, namely Bangladesh, Brazil, Chile, China, Egypt, India, Indonesia, Mexico, Morocco, Pakistan and South Africa, met representatives from nine IEA Implementing Agreement (IA) programmes and from interested government and international bodies. This was an opportunity for IAs to display their collaborative activities and discuss with the country representatives on how to join forces in carrying forward existing efforts. Specific goals were also to establish to what degree

rural households. Some also target a mix of farms, big villages and small towns all of which call for different technologies. In fact, rural electrification policies are shaped according to the various energy needs, resources and target groups. Electrifying the suburb of a major Indian city obviously poses problems that are different from those of a remote village in China. As problems are far greater in rural areas than in urban settings we focus our attention on electrification policies in favour of the world’s rural poor. GENERAL CHALLENGES FACED BY RURAL COMMUNITIES Rural electrification is defined here as the process by which access to electricity is provided to households or villages located in the isolated or remote areas of a country. Remote or rural regions lacking electricity supply are often characterised by well identified challenges. They may lie at a reasonable distance from national or regional electricity grids (remote villages in the Amazon), may be difficult to access (far from urban centres with a difficult terrain such as large rivers or jungles), or may suffer harsh climatic conditions that render electrification through grid extension a perilous task. Rural communities are also often highly dispersed with a low population density and characterised by a low level of education, low load density generally concentrated at evening peak hours, and low revenues. Adding to these challenges, the rural poor without access to electricity either spend relatively large amounts of their scarce financial resources on energy, or a disproportionate amount of time collecting firewood. In light of these challenges, electricity provision to the world’s rural poor calls for a committed and long-term action plan. The benefits that electricity access brings to households and communities are justified not only on social and economic grounds but also on grounds of equity objectives. the emerging economies are committed to such collaboration and to identify the preferred vehicle. The key messages emerging from the workshop highlighted the importance of a constructive dialogue and a “made-to-measure”, non-prescriptive approach. Participants also noted the need to have the IEA as a focal point for information exchanges not only between the IEA countries and emerging economies, but also among the latter. They noted that rural energy decision makers required support in adapting policies to local conditions and that assistance was needed in technology transfer and capacity building, both technical and policy-related. They encouraged further work on policy benchmarking and invited the IEA to undertake a comparative analysis of the effectiveness and efficiency of national and regional policies to accelerate rural energisation.

RURAL ELECTRIFICATION: MAIN CHALLENGES AND ISSUES Roughly 22% of the world’s population still does not have access to electricity. In 2008, this represented 1.5 billion people, most of whom lived in remote areas often difficult to access and therefore to connect to national or regional grids. The International Energy Agency estimates that roughly 85% of the people without electricity live in rural areas in developing countries, mostly in peri-urban or remote rural areas (IEA, 2009b). Today, most of these people are found in sub- Saharan Africa and South Asia. The IEA predicts that in 2030, if no new policy to alleviate energy poverty is introduced, 1.3 billion people (some 16% of the total world population) will still be denied electricity most of whom in South Asia and Africa. Not all electrification policies target poor

SOCIAL BENEFITS OF ELECTRIFICATION At the household level, electricity is mainly used for powering light bulbs, fans, television sets, computers and phones (when available). For over 30 years the World Bank and other organisations have studied the social benefits of electricity access and have noted that these benefits usually derive from the longer days that powered light bulbs offer to the household. In addition, access to information, communication and health care is facilitated by the powering of computers and phones. When electricity is used for powering home appliances, household chores tend to become less tedious; when it is used for lighting, the relative brightness of the light bulb as opposed to candle light allows children to read or study in the later hours of the day, bringing obvious education and leisure benefits. Women and children benefit directly from these improvements, but table or ceiling POWER INSIDER AUGUST/SEPTEMBER 2010 31

rural electrification fans and television sets offer comfort during evening leisure time, increasing the general welfare of all members of the household. economic benefits of electrification Besides the social benefits, decision makers tend to give more importance to the economic impact of access to electricity as an incomegenerating process. Electricity use is expected to lead to more productive processes; the growth of businesses or farms using electricity will then increase demand for electricity, leading to a virtuous growth cycle profitable to both electricity providers and rural communities. Such economic growth is obviously an important achievement of any rural electrification programme. Some experts, however, warn that the necessary conditions for such economic growth lie in the parallel or complementary development programmes for the newly electrified communities. While electricity is indeed an important input to rural businesses, farms or other small rural structures, adequate local conditions such as organised rural markets and sufficient credit are necessary for such businesses to grow. Lack of such complementary development programmes in these regions may hinder their economic growth. technologies commonly used in rural electrification policies Socially, ethically and economically beneficial, the electrification of rural or remote areas is usually high on the agenda of the leaders of major emerging economies, but the main problem to overcome is the choice of the technology. The choice of a specific energy technology

for rural electrification naturally depends on the targeted country and on whether it is a whole region, community, business, farm or household that is to benefit from the process. But this is not the only concern. Issues of customer and load density, relative distance to the national or regional grid, landscape, availability of natural resources such as wind, sun, water, forests, economic and financial aspects, availability and maturity of any chosen technology, all these factors influence the decision maker in his choice of the technology or technology mix. The pool of potential energy technologies for rural electrification programmes is quite large and each technology naturally varies in its generation technique, its costs, and in the quality of the service it delivers. Depending in part on the degree of urbanisation of the targeted population, energy technologies used in electrification programmes generally involve national or regional grid extension, diesel generators, liquefied petroleum gas (LPG), disposable batteries, kerosene lamps, renewable energies (including photovoltaic systems, wind energy, hydropower, and new wave energy and hydrogen) or hybrid systems. national or regional grid extension When aiming to electrify a rural community, the first question is its distance from a grid. If grid extension appears to be relatively easy (the region is near to the grid, flat landscape), is cost competitive with respect to other local auto generators, and if the regionâ&#x20AC;&#x2122;s load density is considered sufficient, then grid extension will usually be a preferred option. In India

for instance, the first choice for a majority of the villages has been through grid extension. But many of the dispersed rural communities did not meet all these criteria at once. Grid extension was then the final phase of a sequential rural electrification process and other local electrification technologies were chosen in the meantime. In fact, once demand was built over the years by means of auto generation, and it became economically feasible to connect to the central grid, grid extension was chosen as a final step. Recently, however, mentalities have been changing and governments as well as rural communities are beginning to see stand-alone systems as long-term and reliable options for power generation, rendering grid extension less of a mandatory long-term means of electrification. conventional systems Diesel generators, LPG, disposable batteries, paraffin (or kerosene) and biomass technologies have all been conventional means for dispersed populations to have access to electricity services. Today however, sustainability considerations are encouraging developing economies to focus their efforts, where possible, in deploying cleaner energy technologies such as renewable and more sustainable bioenergy applications. But diesel generators remain an attractive technology in rural electrification, mainly used in hybrid systems. renewable energy systems Often considered the optimal means of bringing electricity to rural areas that cannot be connected to the grid, renewable energies offer notable environmental advantages over Bioenergy already provides the main source of energy for heating and cooking for many millions of people in rural communities

32 august/september 2010 power insider

conventional fossil fuel technologies. The most widely used renewable energy technologies for rural electrification are described below. Photovoltaic (PV ) power systems already provide electricity in developing countries to an estimated minimum of 500,000 to 1 million rural households without access to the grid. Particularly attractive for countries with ample sunlight and whose rural electricity grid is poorly developed, PV systems can provide electricity to relatively dispersed populations but also to groups of houses or entire villages. The most common systems used in rural areas in developing countries are solar home systems (SHS), which have the potential to power light bulbs and small appliances such as televisions, radios or fans. Generally the capacity of the units used in rural households ranges from 30 to 100 peak watts, but their size varies (Erickson & Chapman, 1995). However, because of the systems’ limited capacity, mechanisms are often needed to prevent excessive consumption by users. Currently, there is a move towards solardiesel hybrid-powered mini-grids. W ind energ y has a ver y high potential for r ural electr ific ation thanks to its intr insic character istics. Wind energy does not necessitate long-term centralised planning for its development as it is fast and simple to install. In most rural settings, when several smaller wind turbines are installed rather than a very large one, the grid can easily absorb wind generation. Successful examples of rural electrification based on wind power are the Atlantic islands of Canary, Azores and Cape Verde, where the high wind resource turns this renewable energy into among the most costeffective power plants to install and operate. Small hydropower projects already provide electricity to millions of people throughout the world, with the largest deployment being in China. These power plants can vary in size from less than 500 kW to about 10 MW and most are

developed at the community level or for small industry. In addition to electricity, they also provide mechanical energy for small businesses, drinking water and irrigation through canals or pumps. While some small hydro plants use imported technology, there is an increased reliance on local manufacture. This provides employment opportunities over and above electricity to the communities. There remains a huge potential to increase the role of small hydro in supplying electricity to small, rural populations. Minihydropower plants are however often criticised for their inability to provide sufficient power to meet peak demand or for their excess capacity during off-peak periods. In order to limit the financial burden due to such tensions, consumers often have to either constrain their use of electricity during peak hours, or transfer their demand on to off-peak hours. Bioenergy already provides the main source of energy for heating and cooking for many millions of people in rural communities. Where adequate sources of biomass raw materials are available – for example from crop or forest residues – then these can also be used to generate electricity. This can be done in conjunction with larger plants which also use energy to process crops (for example the use of bagasse in sugar cane production). Alternatively smaller-scale systems based on biomass combustion or small-scale gasification can be used to generate electricity for local use. Moreover, biofuels such as nonedible straight vegetable oils (SVOs) produced from plants like Jatropha, can be directly used for transport applications and decentralised power generation or converted to biodiesel and blended with petro-diesel. Ocean energy could play a significant role in enabling sustainable energisation of rural coastal and island regions of the developing countries by generating electricity, producing drinking water through desalination, or food through aquaculture, and cooling. This would

however require appropriate policy instruments and real political will. Currently, project development activities are at an early stage in China, India, and Indonesia for providing electricity to rural households by harnessing energy from ocean waves and tidal currents. During 2007, Ponte di Archimede International S.p.A. entered into three joint ventures with the People’s Republic of China, Indonesia and the Philippines to install tidal current-based generation in remote villages. The Research and Technology Ministries in the respective countries participated actively in the formation of these ventures. The installation of tidal current projects of a similar size in remote villages is currently being planned in China and the Philippines. A 2 MW tidal current plant is being considered by India to bring electricity to a remote area near Sunderban in West Bengal. A low-temperature ocean thermal desalination (LTTD) plant has been operating since 2005 at Kavaratti in Lakshadweep islands in western India and that provides 100 m3 per day of drinking water to a local community. There are also significant opportunities to utilise wave and tidal current energy for sustainable energisation of remote coastal areas in Mexico, Brazil and South Africa and activities are already under way in these countries. Hydrogen may well play a key role in distributed energy generation for which rural areas are prime candidates. Hydrogen “generators” (small-scale portable power devices such as reformers and fuel cells) may be substituted for the common diesel generators that are widely used. Hydrogen can also be used as fuel to power backup devices (larger fuel cells) and to provide combined heat and power (CHP). However, because it is innovative and new (at the demonstration and early market introduction stages) the typical household in rural settings would not be appropriate for hydrogen use. There are, however, some 400 stationary hydrogen demonstrations in the world. Unlike the photovoltaic industry or solar water-heating and cooling and other alternative technology industries which have started from scratch, hydrogen is already a large business with an infrastructure that can kick-start production, storage, delivery or energy applications as the deployment process continues. Hydrogen technologies may in the future bring innovation to the current supply of rural electrification technologies. Hybrid systems Hybrid systems are basically a combination of two or more different but complementary energy supply systems located on the same site. The advantage of hybrid systems is their ability to avoid fluctuations in the system’s energy supply, which is the main disadvantage of stand-alone renewable energy technologies such as wind and PV. A hybrid system will provide a relatively constant delivery of energy even when one of the supply devices of the system is unable to generate power (lack of wind in the case of a windmill or of sunlight in the case of a PV ). Often, hybrid systems will be a combination power insider august/september 2010 33

rural electrification desalianation plant in lanzarote

‘Ocean energy cOuld play a significant rOle in enabling sustainable energisatiOn Of rural cOastal and island regiOns Of the develOping cOuntries by generating electricity, prOducing drinking water thrOugh desalinatiOn, Or fOOd thrOugh aquaculture, and cOOling’ of different renewable energy technologies, sometimes coupled with diesel gen-sets. Typical hybrid systems are photovoltaic/wind systems, wind/diesel systems, wind/photovoltaic/micro hydropower systems, or wind/small hydropower and so forth. Typically, apart from local ambient conditions, economical and financial issues, the choice of which energy technology or mix of technologies to use for rural electrification will depend on whether the energy produced will be used for lighting or cooling purposes in a single household, or for productive processes (irrigation pumping, water supplies, crop processing, refrigeration, etc.) of businesses, agro-industries, small shops, and so on. A focus on government policies for rurAl electrificAtion Most developing countries include rural electrification policies in their sociopolitical development efforts. The existing economic inequalities between urban and rural populations and these countries’ social equity objectives tend to be the main drivers to providing electricity access to isolated populations. By doing this, governments of developing countries seek to improve the living standards of their rural populations 34 august/september 2010 power insider

and help them economically in order to help level out rural/urban disparities. Moreover, substantial upfront costs and long-term financial investments are required to accelerate the pace of rural electrification. Such financial security depends on government support. Efficient implementation of rural electrification programmes often needs regulations and market reforms, including market incentives through increased competition for private involvement and above all government involvement. Moreover, technical standards and norms can lead to an over sizing or costly infrastructure set-up for the electrification of rural households or villages, which will increase connection costs and the price of electricity. A reassessment of these standards and norms at the government level may prove necessary to alleviate the unnecessary additional financial burden from the electrification effort in rural areas.

•

summAry 1: preconditions to successful rurAl electrificAtion policies • sound statistical data on populations’ geographical distribution and a clear description of the electrification situation

•

are essential if governments are to avoid the risk of overlooking remote population groups and to facilitate the choice of enduse. sustained government support and longterm funding will guarantee a more effective implementation of electrification objectives, and the elimination of any misuse of electrification funds in favour of other objectives. dedicated institutional structures and independence from political agendas ensure that funds are “ring-fenced”, efforts are durable and electrification objectives are not interfered with according to politicians’ personal agendas. the establishment of a strong market infrastructure to attract private investors ensures the wider use of stand-alone systems in remote areas. related policies and/or regulations including energy efficiency policies should be implemented alongside the electrification process to sustain long-term economic development. connection costs should be eliminated or spread over time so as to minimise any upfront hindrances to being connected, and

electricity tariffs should be affordable but not necessarily subsidised. • effective metering, billing and payment recovery ensure the long-term viability of the electricity supplier and therefore of the electrification process as a whole. • Full involvement of the rural communities in the electrification efforts throughout the decision-making process increases their sense of ownership and brings support to utilities’ efforts to encourage customers to use electricity wisely once they are connected. 2: stand-alone systems: conditions For successFul rural electriFication eFForts • locally-produced and resource-specific technologies for electrification will reduce the need to import systems and facilitate their use in any given region. • Good management and maintenance of the systems require adequate training, assistance services and customer supply chains for their long-term use. • sufficient long-term funding ensures longterm system maintenance. • • Banning the idea that stand-alone systems provide “second-class” electricity gives communities a sense of ownership of the system. • 3: Grid extension: conditions For successFul rural electriFication eFForts • reduction of transmission and distribution losses keeps costs of electrification under control. • reduction of losses due to electricity theft ensures suppliers’ longer-term viability. • the use of low-cost technologies keeps costs of electrification under control.

rural electrification strategy, is strongly recommended (Barnes & Foley, 2004). Such agencies ensure that funds are allocated directly to rural electrification and not reallocated over time to various national priorities. Their apolitical nature should guarantee the durability of efforts independently of any other political or social goal. They should also develop the necessary standards and guidelines for the implementation of rural electrification programmes. For example, the establishment of the Rural Electrification Board in India has proven to be an effective means of furthering electrification efforts independently of political pressures. In the same vein, it is also essential that rural electrification efforts remain independent from politicians’ personal agendas. Not uncommon are cases where politicians, eager to gain their constituents’ support for a renewed mandate, interfere with the electrification process. This has occurred in Bangladesh, where one village, and no other, was provided with access to electricity for the satisfaction of politicians’ agendas. The government of Bangladesh has also pledged to construct new lines servicing areas in the constituencies (whose selection was not justified on commercial grounds) of all Members of Parliament (Taniguchi & Kaneko, 2009). The consequences of such administrative corruption are well known, and hinder the development process. When political pressures interfere with the distribution planning, they cause financial difficulties to the utilities or distribution companies if they are forced to operate in a

non-commercial manner or are unable to cut the power supply to non-paying customers. For this reason, rural electrification efforts should follow a predetermined, inviolable plan that involves a structured institutional setting. An apolitical monitoring of how rural electrification progresses is recommended. This task can be undertaken by independent institutions created or designated for that purpose. Participation of the private sector is important when electrifying remote villages, particularly with stand-alone systems. But for the private sector to participate, governments must ensure the existence of a secure market infrastructure, as all electrification projects need to be viable in order to be sustainable. And as the private sector’s viability depends on profits, it will participate in the electrification process only if money flows easily from customer to supplier. As a market in transition, China has tried to encourage private-sector involvement in the electrification process of rural areas through stand-alone systems (although the boundary between privately owned and publicly owned enterprises is not always clear). In cases where revenues are too insecure to attract the private sector, governments could grant subsidies to enterprises that wish to engage in rural electrification programmes. Asia and the world are watching • Pimagazine would like to thank the IEA for use of it materials in this article. For Further information on the IEA please visit www.iea.org

4: three rural electriFication Boosters • social fairness can be one of the initial driving motivators in the first stages of electrification. indeed, economic development will follow sooner or later even when productive end-uses are not the prime objective to electrification. • minimising trial and error through benchmarking and exchanges with other countries accelerate the electrification process. • co-operation in the framework of iea implementing agreements for exchanges on technologies and support in policy formulation will spur the electrification process and facilitate long-term collaboration with other countries on other policy and technology issues of interest. The creation of transparent and dedicated institutions such as rural electrification agencies (or coordinating agencies) and/or a rural electrification fund, largely autonomous and responsible for implementing the country’s power insider august/september 2010 35

ELECTRICITY

THE

ELECTRICITY GAME

Over the years, Wärtsilä has delivered more than 45 GW of dependable power plants to customers around the world. These power plants serve many different purposes and loads. With each power plant supplied by Wärtsilä, however, there is one special feature that brings value to all our customers – flexibility.

egardless of where in the world the electrical grid is located, some things are as common as the laws of nature. As the system stability and reliability demands of modern society are to be met, each electrical system must manage the following issues and challenges. Since there is no efficient way to store large amounts of electrical energy other than pumped hydro storage, the actual production of electricity must match the consumption in real time, second-by-second. Otherwise, the grid will not be able to maintain stability (Figure 2). To be able to match the varying demand with the correct supply at all times, the system operator needs to plan ahead based on historical data, arrange plant dispatch orders to dynamically match demand, and arrange for adequate capacity reserves in case of unforeseen occurrences (Figure 3). Since power demand is not controlled by the supply system, the demand not only varies according to the time of day, seasonal changes, or social and economic variables, but there is also a fast, minute-by-minute flicker on the load 36 AUGUST/SEPTEMBER 2010 POWER INSIDER

Figure 1: The Plains End power plant, 213 MW, Public Service of Colorado, load-following plant.

Figure 2

Figure 2: A typical daily load curve during summer.

Peaking Load-Following

PJM = Pennsylvania, New Jersey, Maryland Grid Operator 1

ÂŠ WĂ¤rtsilĂ¤ 12 August 2010 Presentation name / Author, DocumentID:

curve, caused by numerous electricity loads (elevators, fans, pumps, refrigerators etc.) turning on and off. The generation units must, therefore, be capable of following these very rapid load changes in the grid (Figure 4). The electricity systems in different countries have quite similar reliability requirements, which stipulate that a certain reserve capacity must be running at all times. This is to cover the sudden shut down of even the largest single plausible loss (largest contingency) in the grid, and also to maintain a certain level of reserves in standby mode to start rapidly. These contingency reserves are divided according to the timeframe of response. The system must have adequate capacity, plus reserves, to cover the highest annual peak load. In the cold zones of the world, these typically occur during the winter, and in the warmer zones with air conditioning, during the summer. Capacity reserve rules do not exist in all countries and systems, but are needed, nevertheless, in some form or another. There must be someone with the responsibility to maintain adequate reserve capacity, otherwise system reliability POWER INSIDER AUGUST/SEPTEMBER 2010 37

electricity Figure 3

Figure 3: predictable load and 25000 random regulation

Daily Load Pattern

Predictable daily load pattern

Peaking

System Load (MW)

22500

Random Regulation requirements

Load-Following 20000 22400

Regulation

4:00

8:00

Limit deviation

60 Hz

5 – 30 sec. Activate

PRIMARY CONTROL

Free reserves

30 sec. – 10 min. SECONDARY CONTROL

Free reserves

10 - 30 min.

~ 1,5 % of installed grid capacity (MW) More with increasing wind power-%

22250

15000 0:00

Restore normal SYSTEM FREQUENCY

Take over

22300

22200 8:00

Figure 4

Electrical grid control principle

> largest plant size (MW)

22350

17500

Figure 4: Electrical grid control principle.

Take over 8:15

8:30

12:00

8:45

16:00

9:00

20:00

0:00

will be hampered. As utilities embark on embracing renewable energy standards and add wind capacity to their portfolios, supply uncertainty of wind must be matched by quickly responding dispatchable power generation. Utilities and independent system operations try to optimize production costs such that the production units are normally started and shut down in a certain merit order sequence. Those with the lowest production cost (fuel and other variable production costs) balanced with the necessary flexibility, go on line first and stay there the longest as the load decreases. There are great differences in the time needed to start up a power plant. Nuclear and steam power plants take a long time, and each start and shut down costs a substantial amount of money. These are typically referred to as baseload generation units. Irrespective of any specific power system distinctions, the following flexible features are valuable in any reliable and optimized electricity production system: • The size of the plant should match the need as accurately as possible. Operating a larger plant at part load reduces efficiency. Being able to enlarge the plant at a later date by additional units is always a good flexible option. • Fuel flexibility. The ability to change fuels according to fuel prices, availability or emissions. • Dispatch flexibility. Fast starting, loading, and stopping for standby capacity (non-spinning reserves). The capability to rapidly change the load up or down (load following, regulation or spinning reserves). • Efficiency. Being able to generate at full, part or low loads while maintaining high efficiency. • Low emissions and minimal environmental impact (noise, outlook, possibility to place the plants in urban areas, etc). • Technological benefits and flexibility (using different cooling systems, e.g. systems with no water usage in dry areas). • Ambient flexibility. Being able to generate efficiently and reliably in warm and hot climates, or at high altitudes. Wärtsilä offers flexible cards to play the electricity game Figure 5: The. Sangachal power plant, 301 MW, AzerEnerji, load-following plant.

38 august/september 2010 poWEr inSidEr

TERITIARY CONTROL

~ 5 % of installed grid capacity (MW) More with increasing wind power share  Primary (Droop) Control = Obligatory, automatic function  Tradable A/S, ISO computer controlled INTERNAL USE ONLY  Tertiary Control = Manual, not A/S-traded, based on local agreements

plAnT SizE Wärtsilä power plants consist of several parallel units which can be installed simultaneously or more units can be added later. The units can be operated independently, and starting, loading, or stopping one unit does not affect the other units. FuEl FlExibiliTy Wärtsilä engines can operate with a wide variety of fuels, such as natural gas, diesel oil, heavy fuel oil, vegetable oils (renewable), or even more challenging fuels such as fuel water emulsion. While maintaining a fuel-diverse product portfolio, these engines have been developed using the same proven technology and basic design. In addition to the upfront choice of fuel usage for generation, specific engines can also be converted at a later stage should the market circumstances change. Wärtsilä also offers dual-fuel engines that can switch on the fly between fuels, for example, between natural gas and a liquid fuel. These types of engines have been especially popular in areas where there is a need for a back-up fuel in case of shortage, or where there is a need to convert from HFO to gas at a later date. Unlike most gas turbines, Wärtsilä gas engines do not require a high gas pressure to operate. A pressure of 4 Bar is adequate to operate the power plant at full output. diSpATch FlExibiliTy And EFFiciEncy Wärtsilä solutions offer the flexibility of operating a plant efficiently at any load, from the minimum load of a single unit, up to full load of all units. Wärtsilä power plants can be run in “efficiency mode” (starting or stopping units as the load changes) or “reliability mode” (sharing the load between the units). This is a major benefit when compared to other technologies that tend to be installed in configurations with fewer units, thereby suffering from reduced efficiency at part load. Wärtsilä plants can also be quickly started-up to supply power to the grid within 1-2 minutes, and can reach full load in 5 minutes on gas. This benefit is very valuable in power markets, whereby the plants can supply non-spinning reserve to the system operator through the ability to be on line quickly should the need arise. This can also be used to capture additional revenue in certain markets. Wärtsilä plants exemplify a “dispatcher’s dream plant” where he can choose to run during profitable hours, and avoid running at other times. Wärtsilä power plants can also be equipped with black start capabilities, for use to energize parts of the local grid in case of a black-out. The rugged design and advanced control systems make them ideal for power generation in areas with smaller, less stable transmission systems, where fluctuations in voltage or frequency can occur. They can even run on “island mode” for an isolated system. The rugged design of the engines also enables them to frequently be started quickly without any adverse affect to the maintenance schedule, or to other operational costs. This is a basic feature of a reciprocating engine, one that is nicely demonstrated with car engines. They can be started in freezing conditions and brought immediately to full load, yet have the same manufacturers’ recommended service intervals as cars used

WÄRTSILÄ® is a registered trademark.

FLEXILIBILITY KEEPS YOU IN CONTROL – ALWAYS. Are you looking for a flexible, always on the spot power solution? A power plant that can run on the cheapest available fuel either at peak load, intermediate, or baseload while maintaining full efficiency? Or be dispatched quicker than any other prime mover in your system and scaled up in size whenever the power need increases? Maybe your main concern is grid stability and you need a power plant for part-load running and dynamic load following that can be sited at locations to alleviate transmission congestion? Or maybe you need a solution for harnessing waste heat for district cooling or heating? Look no further! Read more about what we can do at wartsila.com.

electricity

in hotter climates. There is a large amount of actual data documenting evidence of this advantage from Wärtsilä power plants in operation, showing clearly that the engine efficiency does not change regardless of the number of starts or the load profile. The fact that Wärtsilä engines have minimal limitations as to the required ‘up’ or ‘down’ time, makes them even more of a flexible system asset. Industrial gas turbines, on the other hand, have been designed to operate at steady loads, and because of mechanical and thermal stresses, suffer from frequent starting and stopping. Their efficiency will deteriorate, and their maintenance costs will go up. efficiency With flexibility being a basic requirement for these types of plants, Wärtsilä

engines have the highest efficiency of any technology that can be used on a larger scale to provide energy resources, with fast load following and flexible system stability. Depending on the commercial distinction of the owner, this either results in savings on fuel costs, or in higher revenues from power production. It also complements today’s environment, where we not only need to conserve the power we use, but must also generate this power with less losses. Many governments and policy makers are beginning to use incentives (tax breaks, rapid depreciation) or disincentives (carbon tax) to promote efficiency. On part load, the efficiency curve of Wärtsilä engines remains high, in fact almost flat down to below 50% load. This is a very beneficial feature in any load following and ancillary service application where part load operation is necessary (Figure 7). figure 7: The multi-unit gas engine power plant has very high part-load efficiency.

figure 6: start-up and loading of a gas engine power plant compared to a gas turbine combined cycle plant.

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Nauman Ahmad is Regional Director, Power Plants, Asia for Wärtsilä, based in Singapore. Prior to his relocation to Singapore, Nauman spent two years in Dubai as Regional Director, Middle East. Nauman has also served as Vice President of Development & Financial Services at Wartsila HQ and was a member of the Power Plants management team where he oversaw the group’s structured finance and IPP development activities globally. Nauman has developed or acquired over 3,000 MW and financed over US$1.5 billion of energy related assets in several countries. His previous experience includes positions with El Paso Corporation, Smith Cogeneration and Kidder Peabody. Nauman graduated from Brown University in Providence, Rhode Island.

performance and functionality. Wärtsilä engines can perform at high ambient temperatures without any detrimental impact to output or efficiency (Figure 8). This means, for example, that the power and efficiency is really there when you need it on a hot summer’s day. Wärtsilä plants also provide an excellent solution for high altitude applications, since the plant output remains the same up to an elevation of 2000 m (6000 ft) above sea level.

AMBIENT CIRCUMSTANCES AND TECHNOLOGICAL BENEFITS The turbo charged and intercooled reciprocating engine has many technological advantages over other technologies used for power generation. One such benefit is that Wärtsilä plants consume virtually no water if equipped with a closed loop cooling system. By using air cooled radiators for engine cooling in a closed loop system, water usage can be limited to whatever is needed for minimal tank evaporation, social areas or cleaning. The availability of water is becoming a larger and increasingly important environmental issue, and in some areas water availability for heavy industry or power generation has been limited, and will become even more so in the future. Another advantage is the minimal impact of ambient conditions on plant Figure 8: Wärtsilä gas engines offer stable output and high performance in hot and dry conditions. 1.05 Derating due to cooling water temperature. (Derating due to inlet air temperature starts at 45 °C)

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OPERATIONAL ASPECTS Modern engines are easy to maintain and can be operated without the requirement of special skills other than the training given with delivery. On ships, such engines are often maintained by the crew, including major overhauls. In multi-engine power plants, it is possible to service one engine at a time, thereby keeping most of the plant output continuously available for power generation, thus maximising plant availability. Wärtsilä operates power plants on a long-term contract basis. Many customers opt for a long-term maintenance contract, which brings Wärtsilä specialists to the plant for major overhauls. An important part of both alternatives is remote access to the power plant’s controlling and monitoring system, enabling Wärtsilä specialists to remotely analyse plant performance. By using plant automation data, logging data and actual operational data, maintenance needs can be assessed. THE CASE FOR FLEXIBILITY AND EFFICIENCY Following the daily load curve of a grid system is an expensive proposition for the utility or system operator as load following plants are required to start, stop and cycle. This not only decreases plant efficiency but also increases maintenance costs for the traditional technologies, e.g. combined or simple cycle gas turbines. System reliability requirements force units to be run on part load, or to have quick spinning and non-spinning reserves to counter load variations, or unit contingencies. Adding wind to the portfolio will further accentuate the need for flexible generation as the system will need to accommodate the supply uncertainty from wind. Operators of electrical systems, grids and power plants, have a number of demanding requirements and preferences for their power generation assets. Wärtsilä has focused its efforts on providing the most flexible and effective power solutions on the market, to meet the complex needs and ever changing environment of modern power systems. Whether it’s a small, rural system, an industrial manufacturing plant, or a large, commercially developed nationwide grid system, Wärtsilä products are there, on duty, providing the owners with unmatched flexibility and other benefits for a successful future. POWER INSIDER AUGUST/SEPTEMBER 2010 41

INTERVIEW ROUND TABLE

W E I V R E T IN ROUND TABLE COGENERATION IN ASIA Interview with Gatot S Prawiro President, GE Jenbacher Gas Engines

PIM: CAN YOU PROVIDE AN OUTLINE OF YOUR BUSINESS AND DEPLOYMENTS IN ASIA? GP: GE serves the energy sector by developing and deploying technology that helps make efficient use of natural resources. With nearly 85,000 global employees and 2009 revenues of $37 billion, GE Energy is one of the world’s leading suppliers of power generation and energy delivery technologies. The businesses that comprise GE Energy—GE Power & Water, GE Energy Services and GE Oil & Gas—work together to provide integrated product and service solutions in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; and other alternative fuels. PIM: IN WHAT WAY WILL DISTRIBUTED ENERGY SOLUTIONS HAVE A POSITIVE 42 AUGUST/SEPTEMBER 2010 POWER INSIDER

IMPACT ON THE ENVIRONMENT? GP: The world’s thirst for energy is growing faster than our energy supply. According to the U.S. Energy Information Administration, global demand for all energy forms is expected to grow by 54% between now and 2025. Much of this increase will occur in emerging regions as some of their economies are growing 3 times faster. Distributed energy solutions can have a positive impact on the environment especially for developing countries in Asia like Indonesia, Vietnam and Philippines as they are relatively small scale and can utilize farming waste as well as landfill waste as fuel. One small gas engine could power a remote village and potentially save a government having to extend the national grid to every corner of a country. Indonesia is a case in point as its inhabitants are spread out over 6,000 islands. Case studies of GE’s Jenbacher customers

who have sought distributed energy solutions includes Plaza Indonesia, which has 220,000 square metres of shopping, residential and office towers, and 5-star hotel. It has a capacity of 24.58 MW. This complex has its own captive power because of unstable electricity supply in Indonesia. Another example is a hog farm in Philippines with an owner who wanted to save on electricity cost and realised that he can monetize the waste from his animals. With the 1.1MW production capacity, the owner saves about 40% of his electricity cost. The project is also pending registration with the United Nation’s Clean Development Mechanism. Another positive impact of distributed solutions is the high energy efficiency. It reduces the amount of energy lost in transmitting electricity because the electricity is generated near where it is used, perhaps even in the same building. This also reduces the size and number of power lines that must be constructed, hence less damage to the natural surroundings. As well in many cases the heat is used in CHP (combined heat and Power) applications. PIM: SO WHAT CAN INDIVIDUAL MEMBER GOVERNMENTS DO TO ENSURE EMISSIONS ARE REDUCED AND ENERGY EFFICIENCY MAXIMISED? GP: There are various “carrot and stick” approaches that have worked well around the world and allow for sustainable development. On the soft side, there are incentives for businesses to adopt more environmentally friendly practices such as tax rebates for energy efficiency achievements and compliance to GHG emission regulation. Conversely, there are punitive measures for companies that conduct practices that result in the government having to pay to clean-up the environment or having to subsidize treatment for people suffering from environmental pollution. Public education is also very important. Helping people understand the link between environmental degradation and possible impacts on their livelihoods, will help governments gain support for pro-environment policies. Bringing attention to the rising cost and depletion rates of fossil fuels may also help. Recently, we see governments gaining support for pro-environment policies by demonstrating to their people the link between green energy and new job creation. An example of a government that came up with long-term policies to reduce emissions and increase the uptake of renewable energy sources is Thailand. The government actively promoted a 15-year development plan in 2008, which targets an increase in renewable energy’s share of total final energy demand to 20% by 2022. PIM: WHAT ASSISTANCE IS CURRENTLY AVAILABLE TO AID IN THE IMPLEMENTATION OF RURAL ELECTRIFICATION PROJECTS IN ASIA? GP: ASEAN’s relatively low electrification rate coupled with its high economic growth

‘CASE STUDIES OF GE’S JENBACHER CUSTOMERS WHO HAVE SOUGHT DISTRIBUTED ENERGY SOLUTIONS INCLUDES PLAZA INDONESIA, WHICH HAS 220,000 SQUARE METRES OF SHOPPING, RESIDENTIAL AND OFFICE TOWERS, AND 5-STAR HOTEL. IT HAS A CAPACITY OF 24.58 MW.’

POWER INSIDER AUGUST/SEPTEMBER 2010 43

interview round table means that it will need to invest heavily in energy infrastructure over the coming decades. If policy makers act quickly and decisively to channel these investments to cleaner energy technologies such as wind, solar, biomass and geothermal, ASEAN can avert being locked into a carbon-intensive economy, and its citizens will enjoy a more sustainable quality of life. Some of the efforts that we are aware of to aid in the implementation of rural electrification projects are as follow: The World Bank and Asian Development Bank regularly help to finance and/or cofinance rural electrification in developing countries. Rural Electrification project in the form of renewable energy is a growing trend in recent projects such as the Rehabilitation and Renewable Energy Projects for Rural Electrification and Livelihood Development in the Philippines. Other examples of dedicated projects include the three Bangladesh renewable projects, which brought electricity to more than half a million households between 1982 and 2000, and the two Renewable projects in Indonesia, which reached more than 10 million households. piM: What have been the most significant developments in cogeneration implementation & development during the last 12 months in asia? Gp: I think one of the most significant developments in Asia, though not necessarily over the past 12 months can be seen in Thailand. The implementation of the government’s Small Power Producer Programme (SPP) that was

introduced to promote combined heat and power (CHP) has seen 66 biomass cogeneration plants deliver 582 MW to the national grid. piM: solar and Wind are by far the most Well knoWn and Well used in the reneWable sector. What are the advantages and disadvantages of cogeneration over other technologies? Gp: The advantages of cogeneration are as follows: Today, CHP accounts for only 9% of global electricity generation and CHP plants based on gas engines have numerous benefits. As compared with electricity generation alone, the combined production of electricity AND heat achieves primary energy savings of around 46% and a reduction of greenhouse gas emissions by about 36%. Overall, CHP can reach efficiency levels of over 90%. At the same time, it enables a better use of local resources, while reducing dependency on imported fuel. Disadvantage of cogeneration plants are that they tend to be on a significantly smaller scale than conventional power plants supplying the baseload for a national grid. Thus, the capital cost of a unit of electricity generated in a cogeneration plant could be higher. piM: cost, reliability, service are all Words used by the largest manufacturers of distributed energy solutions. What do you see as the

most important and Why? Gp: All are important to us and we continue to invest in all three aspects to meet our customer needs. What are you predictions for the future growth of Cogeneration? What exciting developments do you expect to see? More governments in Asia are realizing the benefits of Cogeneration and exploring legislation to promote its adoption. We expect more countries or in the absence of national legislation, more industry leaders to set standards with regards to Cogeneration output and efficiency. piM: and What exciting things are on the horizon for ge’s Jenbacher business in asia? Gp: Increasing efficiency and reliability of today’s fuel-flexible gas engines is certainly the key focus in product innovation and is what brings the most economic benefit to our customers. The more downtimes due to service or failures of engines the less money our customers can make with their equipment. GE has launched the world’s first two-stage turbocharged gas engine which offers major output and efficiency increases. Together with other new technical features our new J624 version reaches around 10% higher output. The new engine is available to all customers globally, but the most advantages will be seen at CHP applications and in hot & humid countries. The first engine will be installed at a customer site in the Netherlands shortly and we are excited to carry out other pilot projects in Europe and a plant in Batam Island, Indonesia.

the future of Cogeneration interview with hen Jinhyuns - executive director asian energy investment council can you provide an outline of your business and deployments in asia? The Asian Energy Investment Council play a key role in financing not just Cogeneration but many other renewable energy projects throughout Asia Pacific. Cogeneration plays an important role in rural electrification and the powering of many industrial facilities and shopping mall ets in What Way Will distributed energy solutions have a positive impact on the environment? Distributed energy brings many benefits to the region and has the tremendous potential for reducing greenhouse gases while at the same time reducing delivered power costs. This technology can be a win-win for the environment and the economy in Asia. Deployment of CHP/DE can save energy and reduce CO2 emissions by displacing coal-based central station generation with more efficient natural gas and waste fuel/ waste heat CHP and distributed energy located at or close to the point of use. 44 august/september 2010 power insider

so What can individual member governments do to ensure emissions are reduced and energy efficiency maximised? I must stress that there are many things that we can all do to ensure that we reduce our own carbon footprint, but Governments indeed have to look at their entire energy strategy and policy and not focus on simple individual sectors. Financial incentives are often a great way to attract more foreign business, but a uniformed policy which is structured and not subject to change at the drop of a hat is often a great start. Country stability also ensures that more foreign business become interested in developing business relations What assistance is currently available to aid in the implementation of rural electrification proJects in asia? Again, due to the diverse nature of Asia and its individual countries, this does vary widely. The individual country has their own policy on lending as does organisations such as the ADB

and the AEIC. We focus more on attracting foreign business into Asia and ensuring that we make the right introductions in country to ensure that foreign business also has a great chance of securing tenders and bringing more technology to the region. At present the AEIC has funded some $765 Million in rural electrification projects throughout Asia. 2010 has been a very busy year for tenders and project approvals, we see 2011 as a real strong growth year for Cogeneration in Asia Pacific. What have been the most significant developments in cogeneration implementation & development during the last 12 months in asia? New technology, more efficient engines, more funding and government approvals from Japan, India and China for the use of Cogeneration technology, The next 12-18 months will be very exciting times for the market in Asia. Solar and wind are by far the most well known and well used in the renewable sector. What are the advantages and disadvantages of

the impact of cogeneration interview with nauman ahmad, regional director, power plants, asia for w채rtsil채

PIM: Can you provide an outline of your business and deployments in asia? Wartsila is a leading supplier of high efficiency, fast, flexible, decentralized power plants to electric utilities/municipalities, IPPs, industrial consumers and the oil & gas sector. Out of our global installed base of nearly 46 GW, approximately 16 GW are installed in Asia of which some 2,200 MW are CHP/cogeneration plants. PIM: in what way will distributed energy solutions have a positive impaCt on the environment? According to the International Energy Agency (IEA), the average global grid efficiency is less than 35%. The main culprits are inefficient loading of the generators and transmission losses. Decentralized or distributed energy solutions can generate power with electrical efficiencies of over 44% in simple cycle at the point of consumption. This is more efficient than the grid itself, hence less fuel consumed, hence less of a carbon footprint.

Distributed energy will both reduce investment and congestion on transmission lines. Add CHP to the equation, and efficiencies can get close to 90% PIM: so what Can individual member governments do to ensure emissions are reduCed and energy effiCienCy maximised? For starters, governments and policy makers need to start looking at their power systems as a whole and not compartmentalize generation, transmission and distribution. The focus should be on utilizing the least carbon intensity fuel (= natural gas) in the most efficient manner across the whole energy value chain. Large centralized power plants should run base load so that they are able to maintain their maximum efficiencies. The daily load following should be done with plants best suited for cycling operations while maintaining their maximum efficiency, and ideally located closer to the load

centres so as to minimize transmission losses. Wherever possible, CHP or cogeneration should be utilized, whether it be for district heating, district cooling, cogeneration or simply production of process steam for industrials. Governments and policy makers must either mandate utilities/municipalities to act in this manner or provide economic incentives (or disincentives) to the private sector to fill in the gap. For example, governments and policy makers should let power generators sell electricity at market prices (i.e. remove subsidy). Only then high efficiency solutions (and in turn lower emissions) would start to play a more important role in the power generation mix. At the end of the day, everyone benefits if the whole system efficiency improves. PIM: what assistanCe is Currently available to aid in the implementation of rural eleCtrifiCation projeCts in asia? This very much varies from country to country. For Reliability simply because we want to bring efficient power and reliable power to the people of Asia to increase their standard of living and ensure that they grow. Ser vice, in the past lots of companies has installed equipment and technology which has been substandard. Manufacturers need to ensure that ser vice after installation is a critical component of any deal. Manufacturers also need to ensure that the remote villages a trained person can be on hand to solve any simple breakdowns or repairs, this is a key component of all AEIC tenders, that companies ensure ser vice after installation. Cost efficiency, well cost will always be critical as everyone wants a discount or better price than the last man. Cost for us is not so important as the reliability and ser vice.

Cogeneration over other technologies? I truly believe that cogeneration is a very durable and reliable solution for the generation of electricity. It is cost effective and proven, and offers tremendous opportunities in Asia. Wind is very strong in Asia, the recent report that China has overtaken the USA was not a surprise to us here at the AEIC, more a matter of when not if. Solar still needs more time to develop to be

taken ahead of cogeneration, but with the new developments in CSP I think that soon all three could be a close par. Cost, reliability, serviCe are all words used by the largest manufaCturers of distributed energy solutions. what do you see as the most important and why? Reliability, ser vice and cost efficiency.

what are you prediCtions for the future growth of Cogeneration? We expect to see more governments looking closely at cogeneration and applying for funds. We expect to see more advances in technology, better equipment, deliver y and installation times and full ser vice packages. There will certainly be a market for fast and flexible power plants with the implementation of smart grid in so many countries throughout APAC Power InsIder august/september 2010 45

interview round table

example in Bangladesh, we saw the Rural Electricity Board, tender out small 10-30 MW gas-fired IPPs based upon high efficiency technology. India has many programs including the Rural Electrification Corporation which is willing to lend to rural electrification projects. Many of the multi-laterals such as the Asian Development Bank, the IFC/World Bank, Islamic Development Bank and “green” infrastructure funds are keen to support and invest into rural electrification projects but at the end of the day, the host governments must provide the right policies, incentives, environment whereby either the private sector or the public sector can implement such projects. More than often, such projects will need subsidies from the governments as the cost of generation will be higher than the low rural consumer tariffs. PIM: What have been the most significant developments in cogeneration implementation & development during the last 12 months in asia? It is difficult to say exactly what has happened on the cogeneration front, but but if we take slightly wider view on the electricity markets we note that both India and Pakistan are now willing to take excess power from captive generation. This one structural development which has led to several thousand MWs of standby capacity to be utilized. On the cogeneration front, we have seen Japan with its strong government backed policies for renewable and efficiency enhancement standards implement several high efficiency, distributed and CHP projects. PIM: solar and Wind are by far the most Well knoWn and Well used in the reneWable sector. What are the advantages and disadvantages of cogeneration over other technologies? I believe that Solar is still at its infancy in context of full scale utility level competitiveness . Wind on the other hand has established itself as the utility-scale renewable standard in most 46 august/september 2010 Power InsIder

countries with equipment prices dropping and turbine size becoming bigger and more reliable. Wind has one big disadvantage – it is not predictable and hence not dispatchable by the grid operators and causes what utilities in the US call “negative load”. This means that thermal power plants must be on partial load operations (= reduced efficiency) at all times to balance the wind uncertainty. High efficiency distributed power or cogeneration can help increase overall grid efficiency, reduce fuel consumption and hence the carbon foot print. It can also be highly dispatchable (unlike wind) if the right technology choices are made. It is also important to note that cogeneration systems are typically based on fossil fuels but aimed at maximizing efficiency. Economics of a cogeneration system only look attractive when utilization is high. Therefore these systems are relevant for industrial applications (power & heat), industrial parks , or municipalities (power, heat and cooling). PIM: cost, reliability, service are all Words used by the largest manufacturers of distributed energy solutions. What do you see as the most important and Why? There are two missing words and one missing question: The missing words are “high efficiency” and “high flexibility”, and missing the question is “what do these two words mean for the grid?” All reputable manufacturers are expected to be competitively priced, have high reliability and offer 24/7 life time service support. While these are differentiating factors, this is a given fact. What’s perhaps more interesting for the market now are the advances in electrical efficiency and flexibility. Distributed energy solutions are now reaching efficiencies as high as 46% in simple cycle and are fast, e.g. a 50 or 200 MW plant could start and be on full load in as little as 5 minutes. High efficiency,

part loading, high spinning reserve ratio, rapid response time, great cycling ability all mean something for the grid: it allows the grid to improve over all efficiency and have more operational flexibility. PIM: What are you predictions for the future groWth of cogeneration? What exciting developments do you expect to see? We hope that the governments and policy makers who play an integral role in the energy sector will begin to value the importance of efficiency, and provide either the right incentives or policies for the implementation of both distributed power plants and cogeneration. The solutions are available, and so is apparently the funding as mentioned above. We also expect that in addition to demanding high efficiency, conservation of water particularly in power generation will also be high on the agenda. PIM: and What exciting things are on the horizon for Wartsila in asia? A lot of exciting things are on the horizon: namely to reproduce success we have had in other countries. Utilities and coops in the US such as Public Service of Colorado, South Texas Electric Cooperative, Pacific Gas & Electric, Azer Enerji in Azerbaijan, are using our fast, flexible, gas power plants to take on daily load variances and to “firm” wind. Typically, these plants are installed on 115 kv or 132kv levels, closer to the load centers (hence distributed generation). Base load is best served by coal, nuclear, high efficiency CCGT, and daily load curves variances can be taken relatively economically by fast flexible power plants such as our technology. In Asia, where there is significant daily load various, as countries are looking to reduce their fuel bill, as they look to reduce their CO2 emissions, where there is a lot of talk about smart grids, we believe that fast flexible power plants will have a place in the utility portfolio.

CAIRNS WATER

WONDERWARE SOFTWARE UNITES DISPARATE WATER & WASTEWATER SYSTEMS FOR A SOLID SOLUTION

GOALS • Create an automated Water and Wastewater solution for the city of Cairns, Australia CHALLENGES • An old and unsupported SCADA system had been used to control the Southern Treatment plant • Geography is a prominent factor with 40 pumping stations feeding into the central location SOLUTIONS AND PRODUCTS • Wonderware System Platform • Wonderware InTouch® HMI • Wonderware Historian Software 48 AUGUST/SEPTEMBER 2010 POWER INSIDER

• Wonderware SCADAlarm RESULTS • Helps in providing continuous water and wastewater services to the 145,000 people of Cairns, Australia • The Southern Treatment plant provides primary and secondary stages of sewage treatment for 60,000 of the residents of Cairns • Improved response times and provides better environmental compliance and monitoring • Answered the priority need for continuous control, no matter where engineers are located

Cairns, Australia – Despite being the driest populated continent on Earth, Australia has one of the highest per capita water consumption levels in the developed world. Cairns, known as the Gateway to the Great Barrier Reef, is a growing metropolitan area on Australia’s northeast coast. The city is acutely aware of the importance of protecting its natural resources - especially its water supply. Recently the city has launched education and awareness programs to help both residential and industrial water users understand the impact that their water consumption and conservation can have on the environment. Cairns Water is the city agency responsible for water and wastewater management as well as solid

waste and recycling services for 145,000 people in Cairns. The Southern Treatment plant, one of six plants in the system, is a vital link providing primary and secondary stages of sewage treatment for 60,000 of the residents. SEARCHING FOR NEW SOLUTIONS For years, an old and unsupported SCADA (supervisory control and data acquisition) system had been used to control the Southern Treatment plant. But Cairns Water recognized the need to modernize, so it decided to investigate a new software solution. If successful, the upgrade would eventually roll out to the entire Cairns Water system, which

includes five additional water treatment plants, three biosolid disposal points and a biosolid reprocessing plant. Cairns Water called upon Wonderware Australia, who in turn consulted with Parasyn Controls, a Wonderware Certified System Integrator, to develop an ideal solution for this large and diverse infrastructure. AN ABSOLUTE NEED: COMPATIBILITY AND SCALABILITY The requirements of the Southern Treatment plant presented a number of challenges. With 40 pumping stations feeding into the central location, geography is a prominent factor. Engineers must be able to control all of the processes – no matter

where the station is located or where plant operators are working. The system has to facilitate 24/7/365 monitoring to maintain safety standards, even though the plant is staffed only about 50% of the time. Also, the new software would have to be compatible with the plant’s existing technical platform, which was based on Microsoft® products. And finally, the solution implemented in the Southern Treatment plant upgrade needed to be scalable to the entire Cairns Water system over time. WONDERWARE SOFTWARE MEETS THE CHALLENGE After analyzing these needs and the future plans of Cairns Water, Parasyn Controls recommended POWER INSIDER AUGUST/SEPTEMBER 2010 49

CAIRNS WATER the SCADA software solution from Wonderware. Integration of the new system with the plant’s existing Microsoft-based platform was an important factor for the initial installation. And, since the System Platform technology decreases development costs and enables existing applications to be easily replicated, it would provide the most efficient and cost-effective option for the planned system-wide upgrade. Another critical advantage is that Wonderware software would provide plant engineers the ability to maintain the system from the central location - eliminating the need for frequent travel to the pumping stations located around the city. With Wonderware InTouch®, the award winning Human Machine Interface (HMI) software, engineers can supervise plant systems continuously. Its intuitive graphical interface makes visualizing the plant’s processes easy. With a simple mouse click, they can stop and start the pumps, reset faults, open and check valves or secure complete sections of the system. And when the main plant is not staffed, all of these capabilities are available for remote access, so operators can make most adjustments from their current location, rather than having to return to the plant. And for management, the Wonderware Historian provides high-performance, real-time data and historical reports. All event data is time-stamped for accuracy. Built on Microsoft SQL Server®, the Wonderware Historian gives users the ability to quickly pinpoint plant inefficiencies and correct them. In the case of Cairns Water, this has led to a more consistent effluent. With real-time data, engineers can accurately account for dissolved oxygen levels over time and adjust flows accordingly. By managing daily variations, they have achieved higher-quality effluent and have also realized power reductions. Also important for Cairns Water and the safety

50 AUGUST/SEPTEMBER 2010 POWER INSIDER

of the city’s water supply is the software’s alarm function. Wonderware SCADAlarm™ notifies technicians in real time if conditions require their attention, leading to a system with much more rigorous security. MULTIPLE AWARDS CONFIRM THE STRENGTH OF THE SOLUTION Cairns Water is not the only one praising the new system: PACE, Australia’s magazine covering process and control engineering, awarded Parasyn Controls its Zenith Award in the water and wastewater category. The judges said, “It is good to see an integrator and a water authority work in conjunction to deliver measurable outcomes. This particular system has several strengths in its design and implementation, namely data transmission, redundancy and data historian. All parties should be congratulated in delivering a well-thought out system that realizes substantial benefits.”

POWERFUL RESULTS, MEASURABLE BENEFITS Not long after the new Wonderware software solution was implemented, the positive effects began to be felt by Cairns Water as well as the citizens served by the Southern Treatment plant. The Wonderware SCADA system has improved response times and provides better environmental compliance and monitoring, plus it enables engineers to react quickly to alarms. And with the ability to control the system from any location throughout the plant’s wide-ranging geography, the new solution answers the priority need for continuous control, no matter where engineers are located. Ted Ellis, Cairns Water’s SCADA Systems Control Officer, put it this way, “Wonderware added up to the best choice based on its scalability, its support package and the multiple tools offered to standardize not just our southern plant, but all of our treatment plants and our reticulation network based on one software standard.”

2-4 november 2010 marina bay sands resorT, singapore www.powergenasia.com

Singapore is one of the pioneers of deregulation of the electricity market, revolutionary in the region of South East Asia, and as a result, the region’s eyes have closely followed the outcome. The energy industry is a major contributor to the Singapore economy and their goal is to increase the value-added of Singapore’s energy industry from $20 billion to around $34 billion by 2015. Asia’s economic recovery is outpacing Europe and America’s and is also forecast to a sustain an increase in demand for power to meet the requirements of its growing economies and population. Singapore is the ideal business hub, situated at the heart of South East Asia. With its open and transparent economy and attractive new Marina Bay Sands Resort, it makes the perfect business destination for the region’s power industry to meet, share ideas and experiences. For further information on exhibiting contact:

For information on participating at the conference contact:

oWnEd And pRoduCEd By:

FlAgShip MEdiA SponSoRS:

SuppoRTing oRgAniSATionS:

SponSoR:

Kelvin Marlow Exhibit Sales Manager T: +44 (0) 1992 656 610 C: +44 (0) 7808 587 764 F: +44 (0) 1992 656 700 E: exhibitpga@pennwell.com

The business hub for The region’s power indusTry

Samantha Malcolm Conference Manager T: +44 (0) 1992 656 619 F: +44 (0) 1992 656 735 E: paperspga@pennwell.com

Co-loCATEd WiTh: SuppoRTing uTiliTy :

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PHILLIPINES PROFILE

THE PHILLIPINES

The Department of Energy (DOE) is mandated to provide adequate, reliable and affordable energy to industries to enable them to provide continuous employment and low cost of goods and services, and to the ordinary citizen -- to enable them to achieve a decent lifestyle. Energy should not only be produced and used in a manner that will promote sustainable development and utilization of the country’s natural resources but at the same time contribute to the country’s overall economic competitiveness and minimize negative environmental impacts.

resident Arroyo recently unveiled her energy independence and savings reform package that aims to achieve a 60-percent self-sufficiency level by 2010 and thus shield the country from the adverse effects of imported energy. Energy independence and savings program include increasing indigenous oil and gas reserves, developing renewable energy, increasing the use of alternative fuels, forging strategic alliances with other countries and implementing strong efficiency and conservation program. Billed as a blueprint for energy sector reform, Pimagazine takes a look at the Philippines and what ideas the Department for Energy have. As the country faces the realities of growing energy demand, tight energy supply, limited

52 AUGUST/SEPTEMBER 2010 POWER INSIDER

foreign investments and critical power development issues, the Department of Energy is set to release the Philippine Energy Plan highlighting the plans and programs of the energy sector to fuel support for the economic growth of the country for the period 2009-2030. Specifically, the Plan will deal with the future of energy development which is very vital to the country’s prosperity. The over-arching theme of PEP 2009-2030 is ensuring the best energy choices for a better quality of life POLICY THRUSTS The plans and programs of PEP 2009-2030 are crafted to respond to the challenges that are confronting the energy sector at present and usher the change in the landscape of the country’s

energy future. In simple terms, the Plan will see to it that public policies on energy are at par with the changing needs of the energy sector. As an overall guiding principle, the Plan is based on three broad policy thrusts: a. Ensuring energy security b. Pursuing effective implementation of energy sector reforms and, c. Implementing social mobilization and crosssector monitoring mechanisms. To realize these policy thrusts, the energy sector will see to it that necessary action plans will be set to motion within the 20-year planning period and these are summarized as follows: • Ensure energy security • Accelerate the exploration and development

Feature Sponsor

of oil, gas and coal resources • Intensify development and utilization of renewable and environment-friendly alternative energy resources/technologies • Enhance energy efficiency and conservation • Attain nationwide electrification • Put in place long-term reliable power supply • Improve transmission and distribution systems • Secure vital energy infrastructure and facilities • Maintain a competitive energy investment climate • Pursue effective implementation of energy sector reforms • Monitor the implementation of, and if

• • • • •

•

necessary, recommend amendments to existing energy laws Promote an effi ient, c competitive, transparent and reliable energy sector Advocate the passage of new and necessary laws Implement social mobilization and crosssector monitoring mechanisms Expand reach through Information, Education and Communication Establish cross-sector monitoring mechanism in cooperation with other national government agencies, academe, local government units, non-government organizations and other local and international organizations Promote good governance

ENERGY PLANS AND PROGRAMS Since the path to energy security cannot rely on one option only, the PEP has laid out essential and urgent steps to support the policy thrusts of the energy sector. Below are the clear, realistic and specific plans for the 20-year planning horizon. EXPLORATION/DEVELOPMENT OF CONVENTIONAL FUELS The country ’s conventional energy fuels – oil, gas and coal - will remain to be indispensable in meeting the country ’s energy demand even as the country pursues other alternative energy sources. POWER INSIDER AUGUST/SEPTEMBER 2010 53

phillipines profile

oil and Gas For fossil fuels like oil and gas, the target production level at the end of the planning horizon is 78.59 million barrels, 2,694 trillion cubic feet of gas and condensate of 87.58 million barrels. Service contracts which to date total to about 34 will increase to 117 by 2030. Assuming the realization of these targets, hydrocarbon resources will increase by 40 percent within the planning period. The country has 16 sedimentary basins and the majority of these are found in Luzon particularly in Palawan. Among the action plans to realize these targets are the continuing conduct of the Philippine Energy Contracting Round (PECR) and the establishment of a One Stop Shop to streamline government procedures and processing and provide assistance to potential investors in upstream energy projects. PECR is the government mechanism to bid out prospective areas for exploration and development In the case of natural gas, the continuing inventory of other potential sources will be pursued to explore and develop a natural gas supply base. . Coal Indigenous coal production will increase to a high 250 percent with the entry of more investors through the PECR or energy contracting round mechanisms and the conversion of existing coal operating contracts from exploration to development stage. Nearly 42 percent of insitu reserves will come from the Visayas as well as the bulk of production levels that will come from the large coal mines located mostly in Region VI. Luzon, in particular North Luzon

will have less than 10 percent contribution and these are mostly found in Region 2. Currently, the country imports around 75.4 percent of the domestic coal requirements. Apart from the conduct of PECR, the coal sector will heighten its information dissemination activities in terms of gaining social acceptability of coal projects. The R&D efforts, on other hand, will focus on improving existing technologies for pollution control and policies will be put in place to institutionalize the use of clean coal technologies to address environmental challenges.

GOING FOR CLEAN AND GREEN ENERGY renewable enerGy Renewable energy development was given a tremendous boost with the passage of the Renewable Energy Act of 2008. Since its signing, a total of 206 contracts had been signed and counting. The target is to double the REbased installed capacity for power generation at the end of the planning horizon from its 2008 level of 5,300 MW. Now on its final phase of deliberation among the various TWGs and Sub-committees of the National Renewable Energy Board are the various policy and regulatory mechanisms to speed-up the implementation of the law. These include the mechanisms on Feed-intariff, Renewable Portfolio Standard and Net Metering. FiT refers to the RE policy that offers guaranteed payments on a fixed rate per kwh

for RE generation, excluding any generation for own use; RPS is market-based policy that requires electricity suppliers to source an agreed portion of their energy supply from eligible RE resources; Net Metering a system in which a distribution grid user has a two-way connection to the grid and is only charged for his net electricity consumption and is credited for any overall contribution to the grid. Among the plans and programs which will be done in collaboration with DOE’s state universitybased Renewable Energy Centers and other local research institutions is the updating of DOE’s existing RE database as well as the continuing conduct of promotional activities on renewable energy particularly ocean energy projects which could be in the form OTEC, wave, marine and tidal. In the case of geothermal, a comparatively more advanced RE resource, the targeted installed capacity will increase from 1,972 to over 3,000 MW at the end of the planning horizon to boost the country’s leadership in geothermal energy development worldwide. Currently, among the major islands, Visayas has the highest installed capacity with 964 MW. Given the targets of the geothermal sector, there will be a continuing conduct of PECR to secure geothermal investments (there are 21 geothermal prospects under PECR). Existing service contractors will also be encouraged to undertake expansion and optimization projects. R&D efforts, on the other hand, will be exerted to develop low enthalpy geothermal resources as well as the non-power applications of geothermal.

ALtERNAtIvE ENERGY biodiesel The country has made significant strides on the use of alternative energy for transport. With a favorable policy environment in place, the Plan targets to increase biodiesel blend from 2 percent to as high as 20 percent at the end of the planning horizon. This would result to significant fuel displacement of 102 million liters in 2009 to 1,885 million liters in 2030. bioethanol For bioethanol, the targeted blend is 20 percent from the existing 5 percent or the accelerated E10 that can be seen in the pumps. This will displace 1,340 million liters in 2030 from the current 169 million liters of fuel displacement. The realization of the biofuel target blends will consider factors such as supply availability (but not in conflict with food security targets), infrastructures availability and competitiveness

‘RENEwAbLE ENERGY DEvELOpmENt wAs GIvEN A tREmENDOus bOOst wIth thE pAssAGE OF thE RENEwAbLE ENERGY ACt OF 2008. sINCE Its sIGNING, A tOtAL OF 206 CONtRACts hAD bEEN sIGNED AND COuNtING. thE tARGEt Is tO DOubLE thE RE-bAsED INstALLED CApACItY FOR pOwER GENERAtION At thE END OF thE pLANNING hORIzON FROm Its 2008 LEvEL OF 5,300 mw.’ 54 august/september 2010 power insider

Feature Sponsor and rational pricing. Among the plans and programs of the biofuels sector with the active participation of the interagency National Biofuels Board is to partner with the academe and research institutions on the conduct of durability tests for higher biofuel blends for vehicles and viability studies for other potential feedstock. With the use of higher biofuel blends, standards will be formulated to ensure safety-compliant products. Its expanded utilization such as in marine transport will also be pursued. COMPRESSED NATURAL GAS The governmentâ&#x20AC;&#x2122;s program on CNG is covered under the Natural Gas for Vehicle Program for Public Transport. Under its pilot phase, the target is to have all of 200 buses commercially operating by end of 2010. There are currently 34 buses running on CNG from Southern Tagalog or Calabarzon area to Manila. By 2030, about 10,000 buses nationwide will be fuelled by natural gas. With the onset of the required policy support in the medium-term and the coming on stream of the critical infrastructure facilities, CNG buses are seen to increase commercial operation in Luzon and Visayas by 2015 and 2020 in Mindanao. Over 7.000 units are projected to run in the entire Luzon within the planning horizon. AUTO-LPG In terms of the use of Auto-LPG, the DOE will ensure that safety standards are formulated to regulate the use of LPG in other modes of transport such as 2/4 stroke motorcycle engines, motorized bancas and other diesel engines. The

Force to exactly determine the feasibility of considering nuclear energy as a long term option in the country. As priority activities in the near term, the Task Force is set to validate the results of the BNPP feasibility study which is the major deliverable of an MOU or Memorandum of Understanding between NPC and KEPCO. It will also undertake site safety review of the BNPP. The results of the survey currently being conducted as part of the ongoing nationwide PEP IEC campaign will partly form the basis of a public communication plan that can be used for future IECs. A study on the competitiveness of nuclear power as against other fuel sources will also be conducted and meanwhile, as the country prepares for the possible entry of nuclear power, the DOE is capacitating its manpower through various training programs.

DOE will also enhance its policy direction on the use of LPG and intensify its campaign on its safe utilization and codes of practice among others. Currently, there are 15,000 taxis converted nationwide running on LPG from less than 14,000 only in 2008. OTHER ALTERNATIVE FUELS (NUCLEAR) Worldwide, there is a revival of interest in nuclear energy as an alternative energy source. And along this line, the Secretaries of DOE and DOST jointly created an inter-agency Task

PROMOTING RESPONSIBLE USE OF ENERGY The government is developing opportunities to make realistic changes in the way the country uses its energy resources. Energy conservation programs and technologies will help Filipinos become efficient consumers of energy. For the energy efficiency program, the Plan aims to achieve 10 percent energy savings on the total annual demand of all economic sectors. The passage of an Energy Efficiency Bill will be critical in realizing this target apart from the continuing implementation of the National Energy Efficiency and Conservation Program with the goal of instilling energy efficiency as way of life. The Department is currently implementing the Philippine Energy Efficiency Project with assistance from ADB

POWER INSIDER AUGUST/SEPTEMBER 2010 55

phillipines profile that include among others the implementation of lighting retrofits of selected government buildings, distribution of CFLs to consumers nationwide, the establishment of mercury waste management plant for fluorescent lighting and the establishment of ESCOs as an emerging industry. The DOE will also expand the coverage of standards and labeling program to even include new models of passenger cars and light duty vehicles. Green building technology will also be promoted with our partners in the construction and real estate sectors. Other programs for implementation are the monitoring of efficiency performance of power generation utilities and electric distribution facilities, promotion of aviation fuel efficiency enhancement, retrofit of commercial and industrial establishments and voluntary agreement program on the rationalization of tricycle operation. ensuring developments in the power and electrification sectors As early as the 2003 update, the PEP identified 2008 as a possible critical period for both the Visayas and Mindanao. While the DOE campaigned hard for these investment opportunities in the area through local and even foreign investment roadshows, the investment opportunities did not seem that attractive. In the Visayas, a total of about 610 MW have been committed and part of it is now contributing to the grid. As a result, the island for now has enough reserve capacity to meet its requirement. In the case of Mindanao, only 200 MW of the identified additional 500 MW capacity requirement was realized. The lack of private sector interest to put up the identified additional capacities in Mindanao,

56 august/september 2010 power insider

due to various reasons including regulatory uncertainties, bureaucratic delays, social acceptability, creditworthiness of off takers and even peace and order situation in some areas, led to the current crisis being experienced now in the island. This is further compounded by the worst ever episode, in 20 years, of El Niño that hit the country starting last quarter of 2009. As of early March 2010, El Niño rendered the 900 MW of hydro capacities in Mindanao to almost nothing. This being the case, Mindanao has been declared under a state of calamity. With government being prevented by law to put up new power plants, the private sector in Mindanao has agreed to supply the grid from their imbedded capacities and put up emergency capacities for the grid until the end of El Niño. On the other hand, government continues to advocate for the various programs on demand side management in the island so as to help reduce the peak load and demand for power. Given the critical periods in the respective major grids of the country, between 2009-2030, the Plan provides a list of projects that will come on stream at various timelines. This will include committed projects as essentially having financial closure already and indicative projects as being in various stages of development, which could be in feasibility study phase for example. A 600 MW coal fired plant is a committed project for Luzon and year of availability is in 2012. While for Visayas, two committed coal power plants for this year will bring in 328 MW of additional capacity. Additionally, four additional power projects will come in by 2011 with an additional capacity of 325 MW. For Mindanao Region, the Sibulan Hydropower plant (42.5 MW ) is expected to come onstream this year, the Cabulig Hydropower Project (8

MW ) by 2011 and the Mindanao Geothermal Project (50 MW ) by 2014. rural electrification The legacy of the Arroyo administration is to attain 100 percent barangay electrification. This is close to full realization as the country’s barangay electrification level now stands at 99.5 percent. To date, there remains 22 areas yet to be energized which are either in far-flung locations, hard to reach or the last mile areas or there are incidence of peace and order. Majority of these problematic areas are in Mindanao. Within the planning horizon, the PEP envisions a 90 percent household electrification level through the DOE and the National Electrification Administration-led Expanded Rural Electrification Program which also includes other attached agencies of DOE such as the Philippine National Oil Company, National Power Corporation and industry players.

Pursuing reforms in the Power and downstream oil and gas industries privatization of power sector assets The Power Sector Assets and Liabilities Management Corporation with its mandate of undertaking the disposal of NPC’s generation and transmission assets has successfully bid out 24 operating or generating plants and 5 decommissioned plants. Privatization level has reached 81.3 percent. It is now working on the remaining pre-conditions that will lead to the implementation of open access and retail competition which are the privatization of the remaining NPC generation assets and completing

Feature Sponsor conduct of potential gas market profiling.

the appointment of IPP Administrators from the current 44 percent to the 70 percent level as required by the EPIRA. The remaining subtransmission assets had to be divested also to qualified distribution utilities. Examples of these assets are the step-down transformers, sub-stations and overhead lines which are the main grid’s link to the distribution facilities. DOWNSTREAM OIL INDUSTRY The Department’s role in implementing a deregulated downstream oil industry environment is to strictly ensure that consumers are safe and protected when it comes to the petroleum products that they consume: thus the setting of product and facility standards with relevant government institutions; the collaboration with industry players on mitigating the impact of oil price increase and ensuring a competitive playing field among industry players remain continuing programs of the DOE. The Presidential Task Force on the Security of Energy Facilities and Enforcement

of Energy Laws will continue to play important role in safeguarding consumer welfare against various industry malpractices. DOWNSTREAM NATURAL GAS INDUSTRY The DOE will re-file during the next Congress the Natural Gas Industry Bill that will encourage the private sector to participate in the strategic infrastructures build-up that will transport natural gas from its source to the end users. The DOE will also facilitate the inclusion of incentives for natural gas in the Investment Priorities Plan. The Department is also closely monitoring the natural gas supply developments in other economies to learn from their experiences and even explore the possibility of entering into cooperation undertakings. The way forward program in terms of market development is among others to evaluate the techno-economic aspects of related technologies for fuel shift to natural gas; promotion of on-site or small scale power generation using marginal gas fields and

USING ENERGY IN AN ENVIRONMENTALLY RESPONSIBLE MANNER (CLIMATE CHANGE ADAPTATION MEASURES) The country, like the rest of the world, is facing a moment of decision in terms of using energy in a more environment-friendly way. Fully aware on the role and responsibility of the energy sector in helping mitigate the impact of climate change, the Plan is introducing the pursuit of adaptation strategies, among which are as follows: the conduct of impact and vulnerability assessments of energy systems such as power generation, transmission and distribution, fuel production and transport in the immediate term, integration of structural adaptations into the design of energy infrastructures to include modification of engineering design practices and integration of climate change adaptation to energy policies, plans and programs including laws and regulations. SOCIAL MOBILIZATION The plans and programs to realize the third policy thrust which is to implement social mobilization are already incorporated in all the energy sector plans and programs and these are expanding reach thru IEC, promoting good governance. The DOE however, would need to strengthen its collaboration and linkages with partners at both the national and local levels to help ensure that national plans and programs such as the Philippine Energy Plan will find its way into the regional, provincial and even municipal plans. Only then can national plans like PEP truly make a difference in transforming the lives of the Filipino people. • By Charles Fox info@pimagazine-asia.com

POWER INSIDER AUGUST/SEPTEMBER 2010 57

2-4 november 2010 mArinA bAy sAnds resorT, singApore WWW.reneWAbLeenergyWorLd-AsiA.com

singapore is one of the pioneers of deregulation of the electricity market, revolutionary in the region of south east asia, and as a result, the region’s eyes have closely followed the outcome. The energy industry is a major contributor to the singapore economy and their goal is to increase the value-added of singapore’s energy industry from $20 billion to around $34 billion by 2015. clean energy is a key growth area for singapore with the target of generating $1.7 billion value-added and 7,000 jobs by 2015. asia’s economic recovery is outpacing europe and america’s and is also forecast to sustain an increase in demand for power to meet the requirements of its growing economies and population. singapore is the ideal business hub, situated at the heart of south east asia. with its open and transparent economy and attractive new Marina bay sands resort, it makes the perfect business destination for the region’s renewables industry to meet, share ideas and experiences. For further information on exhibiting contact:

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Amy Nash conference Manager T: +44 (0) 1992 656 621 F: +44 (0) 1992 656 735 e: papersrewa@pennwell.com

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cheaper power

Providing CheaPer Power and Continuous suPPly:

how to make it haPPen... T

he generally accepted concept that “Supply follows Demand” where “Consumer” (We will not call customer in this case), has the right to demand any amount of energy and pay (or do not pay) for it based on regulated or even market tariff/prices has led to the inefficient use of generating capacities, pushed utilities to build extra capacity both in generation and in the transmission/ distribution system to cover the odd peaks and hence the wasteful use of fuel supplies. Such system not only prevents consumers to conserve or plan the energy use, it also puts the system at risk of failure during bad weather, high peaks and fuel supply interruption. Government overlooking this, still supports the idea of building new generation capacities run by expensive fuel, to meet these short duration peak period instead of formulating policies to incentivized utilities and customers to manage the peak load demand. This approach has made the cost of power high. We also know that the energy system we have today is the consequence of decisions taken over the last hundred years. These decisions were mostly

60 august/september 2010 power insider

influenced by the basic engineering requirements and were introduced in the configuration of the energy system which in net was to meet the needs of the customers. Around the world we see existing distribution systems are made of technologies from different generations and composition, which raises issues of infrastructure upgrade to accommodate the pressing demands and hence huge investments. With grave challenges of Climate Change, it is important not only to review the whole supply chain of electricity and the requirements to create new customer behaviour to address the Demand –Supply issue but also well thought and strict Government policies will be required to accommodate this . Unless these policies do not effectively accommodate large amounts of varying renewable energy, reduce uncertainty for investors for “Green Energy” and are executed and monitored by an “Independent Regulator” the effect will be minimal. The role of regulator in such scenario, should not be limited to setting tariff mechanism only but

should be expanded to incentivized the utilities to find new innovative solutions to address huge T&D losses in the system, improve quality of service and introduce “smart” electricity meters in houses, businesses and factories, providing two-way communication between suppliers and users, and allowing power-using devices to be turned on and off automatically depending on the supply situation, encourage them to use new Utility Management solutions (e.g. SAP) to bring efficiencies in the business processes and hence reduce the cost of electricity while improve the reliability of the system. There is no doubt that without upgrading the current infrastructure, it will be impossible to reduce the losses as well as demand. Use of AMI is a must and we will be fooling ourselves, if we delay such upgrades. Today new communication technologies are giving us so many options to use AMI effectively and at low cost. Utilities should be taking steps to find ways to introduce AMI

to Industrial, commercial and high use customers in start. This will not only help them to attain Efficiency Gains through peak load demand management (utility buying less of the expensive peak power) , by reducing the cost of meter reading , by removing billing errors and improving service quality (reduction in outages means more revenues and less repair cost) and above all reducing commercial losses etc. Investing in AMI without the support of Utility Management Solutions such as SAP IS-Utilities, will not give the desired effect. These are long term investments and utilities should think seriously of arming themselves with such advanced tools. Educating customers has been and will always be a challenge as the customer base is very diverse in many ways. A well thought marketing campaign through a different media channel will help bring the awareness about Energy Conservation, System reliability and T&D Losses. Partnering up with local NGOs will give utilities bigger reach to convey such message. The current power situation in the Philippines makes for good reading but can be summarized as: • not enough supply to meet peak demand patterns leading to black and brown outs • impact on country’s Gdp due to industrial down time or expensive alternate generator supply • social/political impact due to the affect on quality of life (e.g. no A/C in Tropical heat) • impact on Quality of service and Cost of service leading to the raising of Tariffs • Losses in Transmission and distribution keep on rising in absolute terms (see Fig 1) FiG 1: Historical Absolute T&d Losses in philippines Going Up • •

High consumer costs for electric Uncompetitive industrial sector (exceptionally high power rates were cited as one reason why intel philippines, one of the country’s biggest foreign investors and largest employers, with over 5,000 workers, planned to close down its philippine operations and divert the company’s

•

investments to lower-cost Vietnam and Malaysia) social/political issues caused by Low Consumer satisfaction (the average cost of electricity in the philippines in recent years was 17.5 Us cents per kilowatt-hour (kwh). That is more than three times the 5.38 per kwh cost in Vietnam, and is markedly higher than the 6.77 per kwh cost in indonesia, 7.67 per kwh in Malaysia and 8.50 per kwh in Thailand. even high-cost singapore recorded cheaper power rates at 13.07 per kwh)

There are many ways To “skin This caT” and will discuss The iniTiaTives ThaT can make a difference. 1)The traditional approach, add more power! (The politicians favourite) 2)The educated independent regulator with teeth 3)reduce peak load demand 4)reduce the t&d losses! (lies, damn lies and then there are t&d statistics) 1) THe TrAdiTionAL ApproACH, Add More power Add more generation capacity to fill the peak load demand/supply gap nd subsidize consumer electric prices from the Government. • subsidize consumer electric prices from the Government • issues with this approach: • High fuel costs will continue to drive high electricity prices. Additionally, imported fuel supply bought on the global spot market bring increased risk of future increases to electric supply costs • Commissioning of new generation faculties is lengthy so impact on black/brown outs will take a while (e.g. +5 years for fossil fuel, nuclear 10+) • no addressing T&d efficiency so still a high volume of electric wasted in the system • if applied on its own, non-competitive tendencies are not addressed and so prices will not be driven down by market forces

Fig1: Historical Losses in Philippines

•

dependency on foreign investment/loans linked to foreign currency can make this high risk for the government or ipp’s and can cause electricity price inflation

reCoMMendATion: Add more generation supply from domestic fuel sources. While there have been many advances in the use of Geothermal technologies, one underutilized and rapidly growing approach in other countries is the generation of electricity from organic waste sources which can be used in the production of BIO-Gas. New advancements in Bio Gas production technology is now well proven on an industrial scale. The new technologies also allow for the use of various kinds of waste streams that can be mixed to produce high quality Bio Gas that is utilized in the production of renewable energy and organic fertilizer which helps bring down the cost of the power without the need for any government subsidies. The modular structure of the Bio Gas production plants allows for facilities to be established that can be scaled according to the requirements of each location. The short time frame needed to commission the Bio Gas plants and their ability to deal with various waste streams is perfectly suited to the distributed island communities of the Philippines (local plants not requiring expensive inter- island transmission) and are ecologically friendly. Various waste streams that can be utilized for fuel in this process include: • Live-stock (animal) waste • Agricultural waste • Human waste • industrial waste (organic) • Municipal waste FiG 2: Combustible renewable energy declining instead of increasing within the philippines. why? Generation costs are a fraction of traditional fossil fuels and will be more in line with ecotourism polices of these beautiful islands. 2) THe edUCATed independenT reGULATor wiTH TeeTH • privatization has not led to reduction in electricity costs • Transmission and distribution companies

Fig2: Heading in the Wrong Direction

www.tradingeconomics.com

(% going down, absolute going up)



www.tradingeconomics.com

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power insider august/september 2010 61

cheaper power Fig 4: SAP Solution: Changing Consumer Behaviour

Fig. 3 Philippines Electric System CONSUMERS Distribution

Meralco (4-5MM)

NAPOCOR

AMI 

•

62 august/september 2010 power insider

•

Energy Data Management

Meter Data Management (MDM)

IPP’s

are local monopolies who are not incentivized to efficiency gains and so any reductions in the supply cost of electricity Transmission charges should be borne be the distribution companies to create competition between distributors remove any potential for conflict of interest within vertically integrated utilities (should a distributor be allowed to be also transmitter and or a generator?) Tariff creation needs to closely monitored and interactions managed between players within generation, transmission and distribution to ensure the consumers rights and best interests are not violated if the distributer was incentivized to improve its performance in technical losses it should also be looking hard at the commercial losses due to left from consumer, employees and organized groups. Utilities need to be incentivized by the regulator to reduce commercial and technical losses for reward. As opposed to the cost plus tariff calculations of today that encourage padding of costs and the pass-on of all costs to the consumer, which results in artificially high tariffs. Loss reduction in transmission and distribution should be measured by the regulator and the utility penalized for inactivity. This will drive the cost of supply down and so can be passed on to the consumer. Additionally to increase the customer service levels for the tariffs accepted by the regulator, service Level Agreements targets should be place on outage and the timing for which they are fixed. This is a proven incentive used a lot in Latin America (e.g. el salvador) where the utilities have been fined MM’s of Usd to improve outage management and so customer service. This is perfect cost justification for a utility to spend capital in a very important performance area. introduction of Consumer retailers (like singapore) could be introduced nationwide to provide residents the option to switch to a lower cost provider

CRM

Hierarchy NetworkPM(or PM) Hierarchy

NGCP (Transmission)

Transmission

Generation

Billing

120 COOPS (10-15MM)

120 Coop distributors should be consolidated to help operators gain economies of scale and be more competitive A regulator independent from the government and from the industry is what is needed to balance market forces and social impacts The quality of service should also be monitored closely by regulator, so that the investment component of the tariff will not only give the companies to invest in improving the quality of service, but they should be allowed to keep the efficiency gains for fixed term before passing on that benefit to customers. even if that will not reduce the tariff for end user, it can help keep the tariff on the same level offsetting the inflation.

3) redUCe peAK LoAd deMAnd Reduce the Peak Load Demand required due to concentrated consumer behavior normally found in late afternoon to early evening. If the electric distributor or retailer can offer split tariffs where it is cheaper to use electric in the nonpeak times the consumers will potentially be willing to change WHEN they use electric during the day or night to save themselves money. [Flattening out the demand curve will not only give financial benefit to the utility by reducing the purchase of expensive peak power; it also means that the peaking plants (coal and oil) do not have to be fired-up as often and hence have positive impact on the environment.] This approach has been used to much affect recently (2007/2008) in South Africa to remove rolling black outs in supply during the Peak Load times and was the result of split tariffs and consumer education. This approach can be further targeted and effectiveness improved through the use of AMI (Automatic Meter Infrastructure) and its integration to SAP’s Utilities Suite. AMI allows for a utility to read a meter every 15 minutes. As such this provides the Utility with two important tools: 1)Time of use billing (split tariffs) , pay as you go (used in Africa) 2)Analysis of consumption usage patterns throughout the day and night (just like a Telecom

AMI

AMI 

company knows when you used your phone, the tariff you were charged and how long you were on the phone) By offering the cheaper tariff at off peak times, consumers will generally want to move their heavy usage (such as washing machine, ironing, cooking etc.) to this time if possible and worthwhile. Consumer education is key to the adoption of this change in behavior and will require marketing by the utility as well as NGOs and Government to help this cause. SAP Utilities suite when integrated to AMI allows SAP to aggregate the consumption within the Peak Period and the Off-Peak Period. This function is performed within the Energy Data Management (EDM) module of the solution. When the billing cycle is due, the consumption split by Peak and Off Peak is pulled into the SAP Utilities Billing engine. The appropriate tariff is applied to each time-segment and the bill is produced with a Peak Amount and an Off-Peak Amount. Thus time-ofuse or split tariff billing is automatically supported by the SAP Utilities suite. FiGUre: 4 sAp solution integrated with AMi to Manage peak Load demand reduction To make a significant impact on the Peak Load Demand as mentioned, it is necessary for the Utility to educate and so market to the consumer so that they are encouraged to change behavior. It is recommended that the Utility segments its consumers by consumption and then have focused marketing campaigns targeted at each customer segment. This is a general Marketing principle in making campaigns and promotions successful. As such, leveraging the SAP Utilities suite and in particular the SAP CRM tool, the utility can extract information from the same data base (Module: Energy Data Management) and segment the customers by HOW much and WHEN energy is used. It is recommended to start with segments in Industrial, Commercial and high usage residential first to show quick wins. Customers can be broken out into these segments easily in SAP CRM. Using the CRM tool, the utility should create campaigns and promotions specific for each segment that appeals to these groups of consumers that will make them want to use electric at a time when the rate is cheaper. i.e. What it takes to change an industrial consumer will be different from a High-end residential consumer.

Fig 5: Areas of Improvement

Fig 4a: Smart Grid Roadmap (Quick Hits)

CONSUMERS

AMR Implementation

Commercial Losses

Energy Data Management A

CRM BW or Analytics SMART GRID Pilot

SMART GRID Roll-Outs by Customer Segment or Geography

Distribution

Meralco (4-5MM)

120 COOPS (10-15MM) Transmission Technical Losses

NGCP (Transmission)

Transmission

3-6 months

Technical Losses

Loss detection & Outage/Asset Management

Transmission Technical Losses

SMART GRID pilot focused on consumer energy consumption and loss analysis

Generation

NAPOCOR



recommended sMArT Grid pilot (Fig 4a) It is recommended that the Utilities start their SMART GRID Initiative with ONE segment or ONE GEOGRAPHIC AREA. This pilot will be focused on consumption pattern/segmentation as well as loss analysis. This will allow the utility to begin understanding consumption patterns and pilot the effectiveness of certain promotions on focused consumer groups. This pilot can be implemented without implementing a new billing system or new split tariffs before rolling out to the whole city. Additionally commercial and technical loss analysis techniques can be improved on the target group of customers and network elements. Once these promotions and campaigns have been created for each segment then the inbound and outbound campaigns are put into practice. Outbound campaign such as calling campaigns or managed though sales executives will be shared with the customer for them to take advantage of the new pricing of electricity. Once agreed, a consumer can be assigned to the new split tariff promotion and will be charged on the Off Peak/Off-Peak rates. In the background, when a customer in the CRM system adopts one of the promotions then they will be assigned the split tariff in the SAP Utilities Billing engine. Inbound campaigns are very effective in the call center and walk-in centre channels. Thus when a consumer calls in or walks into a centre and is identified by the customer service agent, the SAP CRM system identifies the consumer AND that they belong to one of the segments that has been targeted for split tariff promotions. Automatically, the promotion and sales script will pop-up on the agents screen and the agent will be prompted to offer the consumer the new tariffs, send them information on the promotion or if relevant to send a sale agent to discuss the program. The integrated use of the SAP Energy Data Management with AMI, with SAP UtilitiesBilling and CRM allows for the utility to move a significant amount of consumers from the peak load times to the off peak and so reduce the demand at peak hours. What pays for AMI/SMART GRID? Efficiency Gains by putting the AMI through peak load demand management (utility buying less of expensive peak power) , by reduction in cost of meter reading , by

removing billing errors and improving service quality (reduction in outages means more revenues and less repair cost) and above all reducing commercial losses.

IPP’s (XXX) Asset Management reduces cost of generation and improves uptime



redUCinG Losses? A) Technical Losses Analysis and reduction: a)Implement network monitoring tools like SCADA and AMI to provide the information for loss analysis (e.g. AMI for Feeder Balancing) b)Clean the network or asset data to provide accurate analysis c)Analyze network data regularly to identify where system losses are occurring Fig 6: sAp Loss Analysis solution The utility does not need to implement AMR’s for every customer to make good progress in reducing technical losses. The costs of AMR’s and the quantity needed to implement are often capital scares to most utilities. Three suggested methods to enable technical loss analysis and reduce the cost of your Smart Grid/ AMI investment: a)Implement AMR’s only at key areas of network, at the PMT level and above. Allow for Feeder balancing b)Use manual check meters strategically placed within the network. If these meters are read on a synchronized basis then the data can be used to provide load balancing across the whole network area covered c)Perform LV loss analysis based on monthly meter reads used for billing purposes Therefore, the SAP Utilities solution would enable the following processes: • AMr feeds MdM every 15 minutes by

4) redUCe THe T&d Losses! The theory goes, if an electrical system increase its efficiency in delivery to the consumer from the point of generation then there will be less electricity wasted or lost (technical losses) in transmission and distribution. Thus there will be more electricity available in the system and so increasing the available load to meet the peak demand. So fewer if any brown/black outs at peak hours. Additionally, if the generation, distribution and transmission costs are fixed during these efficiency gains (or losses reduced) then the cost of supplying the higher amount of electricity would remain constant. Therefore the cost of supply per KW/H would reduce proportionately. If regulated tightly, this reduction per KW/H should be passed on (at least partially) to the consumer. Moreover, if the distributer was incentivized to improve its performance in technical losses it should also be looking hard at the commercial losses or revenue leakage caused by employees, customers and organized groups. Utilities need to be incentivized by the regulator to reduce commercial and technical losses for reward. (People running utilities and their stockholders are humans and require incentives to improve) As opposed to the cost plus tariff calculations of today that encourage padding of costs and Fig6: SAP Solution: pass-on all costs to the consumer, which results Technical Loss Analysis and Reduction in artificially high tariffs. Fig 5: Highlights the Billing BW points in the T&d Energy Data SCADA GIS delivery cycle where Management focused initiatives Network Hierarchy on efficiency will increase the Kw/H Synchronized of energy delivered Meter Data Manual Meter Management (MDM) to consumers per Reads Kw/H generated. (i.e. reduce Losses) AMI AMI so How does A UTiLiTy Go AboUT



power insider august/september 2010 63

cheaper power Fig 7a: Outage Management Quick Wins Outage Management I Operations Call Center

Loss Analysis Technical (HV) OMS Pilot

Roll out OMS by Region

Fig 7b. Metro-OMS I: Keeping Network and GIS Updated •Short term fixes and temporary activity recorded on a real time basis in GIS. •SAP updated on batch basis with network changes. PM Hierarchy kept inline with RealNetwork and not theoretical •EDM should be more accurate in locating transmission losses

Operations Call Centre User Interface

SAP PM (Network Hierarchy)

Network Hierarchy

Energy Data Management Meters

Meters

6-9 months 

Gprs (AMr) AMr validated and consolidate reads (AMr) sAp edM accepts and further validated the AMr meter readings (edM) • Manual consumer meter readings and check meter readings are loaded in sAp edM • The network elements and structure is stored and maintained in the sAp pM Hierarchy(sAp pM) • network is load balanced with in sAp (edM) • potential areas of technical loss are identified (edM reports) • Transmission • HV distribution • LV distribution Step one has been achieved, identifying the technical losses. Now the utility should isolate the losses and fix the problem in a timely and effective manner. This will require a good asset management or work order solution to help locate and dispatch the appropriate work crew to fix the problem. • •

B) outage Management The other sources of understanding faults or outages in the system are from the consumers and from operations work crews in the field. Normally all inbound call to a utility are either to do with outages or are related to billing. Ideally the utility has implemented a central call centre operation supported by a CRM contact centre solution (e.g. SAP CRM) and possibly a

02/09/2010

secondary call centre for operations. Fig 7c: sAp CrM and Metro-oMs solution used in the operations Call Centre It is recommended to have a robust CRM Solution to manage the outage calls so that the fault issues can be taken down, the customer located on the GIS solution and see if it relates to any existing outage or call. Interface with work crews is kept simple initially to existing radio communication with operations call centre. Outages, repairs etc are reported in CRM and GIS systems as performed. GIS solution will show Customer and meter location on a Map. On the GIS map the spatial view of the network will be viewed and highlight which network element is faulty. From viewing the map the Customer agent can see if a transformer is down then which customers are affected. The agent can proactively SMS out bound or call outbound and inform people of the outage length and the reason. This will reduce unnecessary calls the into call centre. The Operations call centre manager can view all the identified outages, the time they have been open in the SAP CRM system. He/She can view the network on the GIS system and see which network elements are at fault. Any changes to the network (e.g Short term fixes like back feeding) can be made directly on the GIS system and the changed network view can be seen immediately. The Metro-OMS solution provides an easy to use graphical user interface so that operations staff

Fig 8: SAP Solution: Asset Management

PROJECT JOSH

 OMS 1 Solution



are willing to enter ALL the network changes to the network AS IT HAPPENS. This is the secret sauce to keeping the outage, asset management and GIS systems in synch with the real world. Integration to SAP (plant maintenance or network hierarchy) will occur in the background. Fig 7b: Metro-oMs i: Keeping network and Gis Updated The OMS solution provided by Metro-CIS (Metro-OMS) using a freeware GIS solution or ESRI (GIS Solution and certified Partner of SAP), SAP Technology and SAP Netweaver development helps ALL the short term and long term changes keep up to date in the network hierarchy. So the theoretical network in SAP and GIS solution is kept as close to the real world network. PLUS short term fixes can be easily identified and removed prior to the implementation of the long term fix. Thus stopping avoidable damage to transformers. FiG 7a: outage Management Quick wins Our recommendation is to begin with one operational region and implement the outage management Solution first. As such this is the secret sauce. If the network hierarchy in SAP is kept in synch with the real world. Then not only will your loss analysis performed in SAP EDM and the outage/asset management performed in SAP will be operating at optimum levels and will not be compromised by most legacy GIS and Asset management solutions. C) Asset Management

Fig 8a: Manage ALL Field Work in ONE solution Work management for Transmission and distribution

Asset Management:

Reliability Centre Maintenance

•Maintenance •Capital Projects •Supply Chain

All work performed has work orders

GIS

Network updated on real-time basis on completion of work Optimization of supply chain Maintenance planning

SCADA

Network

Hierarchy

Work and outage prioritization

Maintenance

New Connection

Meter Reading

Outages

Work Order Management (Crew Scheduling)

Disconnect Reconnect

Faulty Meter

Capital Build

Outage management work scheduled through Asset Management 

64 august/september 2010 power insider

02/09/2010

PROJECT JOSH



Fig 7c; Metro-OMS II: Operations CRM Main Call Centre

Billing Complaints

Outage Complaints

Crew Work Management

OPS Call Centre

Billing

Ops GIS

Credit Collections

Network Hierarchy

Energy Data Management Meters

Meters

02/09/2010

PROJECT JOSH

 OMS Solution 2 

FiG 8: sAp Asset Management a)Optimize the efficiency of work crews so that outages are dealt with in best possible manner b)Implement Asset Management systems and processes (preventative maintenance) procedures that are adhered to: c)Increase the lifetime of key assets by simply following manufacturers guidelines (e.g. scheduled transformer oil changes) d)Reduce outages by performing the scheduled maintenance as recommended by manufacturer e)Optimize work crew across all work within field operations and prioritize Fig 8a: Maximizing the value of sAp Asset Management by managing ALL field work d) Commercial Loss Analysis (FiG 9) Although there are provisions in the law against pilferage of electricity, it’s important that utilities monitor it closely. Such consumer behavior needs constant policing and penalties. The issue usually here is collusion with employees and therefore there is need to reduce the human interference through use of technology and systems like SAP Utilities. Unless the utility invest in removing the human interference, this will go on. As it’s seen around the world, that consumers who are involved in theft of energy always find unique ways to by-pass the meters and give hard time to utility isolating such consumers, the only way to isolate them is to analyze the consumption pattern of consumers and through such analytical tools provided in SAP ISU.

Utilities need to educate the consumers, specially the future consumers that theft of energy is not only immoral but also hurts the system. In many part s of the world utilities work with schools children and do road shows to explain the safe use of electricity and the consequences of energy theft. Any reduction in commercial loss means that utility will be able to reduce the cost of generation and avoid any future addition of power plant and hence impacting the environment also. ConCLusion 1)Invest in local renewable fuel supplies that can be localized by island (e.g. Bio Gas) to avoid currency fluctuation, fuel inflation and high transmission costs between islands 2)Regulate to incentivize technical and commercial loss reduction plus improvements in outage management 3)Implement an Outage Management solution to keep your network in synch with your GIS (Improve service levels and reduce outage losses) 4)Implement Loss Analysis tools for load balancing to identify technical losses 5)Leverage Asset Management tools to maximize the performance and value of network assets FiG 10: proposed roadmap to reduce T&d Losses Paul Grabham, CEO Metro-CIS Email: pgrabham@metrocis.com Web: www.metrocis.com

Fig9: SAP Solution: Commercial Loss Analysis

Fig 10: Metro-CIS Proposed Roadmap A

Billing BW SCADA

Energy Data Management

Network

Synchronized Manual Meter Reads

SMART GRID B

GIS

Hierarchy

Meter Data Management (MDM)

AMI

Contributor: Jan Abbas, Distribution Expert (Previously Executive at AES Corp. and Abraaj Group)

Outage Management

Asset Management (Work Orders)

Loss Analysis Technical (LV) and Commercial Meter to Cash (Billing and Receivables)

12-18 months

AMI 

Example timelines for an Integrated Utility of 4MM customers (transmission and Distribution)

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power insider august/september 2010 65

SMART GRID

CHINA: THE SMART LEADER IN THE EAST Charles Fox Reports

The much discussed Copenhagen summit concluded reiterating the need for energy efficiency and a carbon footprint reduction strategy amongst the participating countries. While the world is split on political and economic grounds on the climate front, technology is still acting as the conciliator by offering universal and cost-effective energy-saving solutions like the smart grid. 66 AUGUST/SEPTEMBER 2010 POWER INSIDER

mart grid technology has already gained popularity in the United States and Europe. With developing countries like India and China facing the axe from the West on the pollution front, the green focus is being shifted to the AsiaPacific region, especially to China. China, nicknamed the world’s manufacturing market, is the clear target of smart grid companies around the world. They think that a robust smart-grid infrastructure will help the country sustain its energy resources while taking its business goals forward. The market is now dynamic with a lot of new smart grid projects led by global leaders like IBM, Cisco and GE. The China State Grid are also ensuring regulation and guidelines are adhered too to ensure efficiency and levels of service. ENERGY SAVINGS FROM SMART GRID “Smart Grid” refers to a “modernized electricity network” that utilizes a two-way digital technology to send electricity from the source to end users and establish a connection between the end user and the provider. A smart grid, is essentially an intelligent monitoring system that can track the electricity flowing through a system. While the technology offers huge power savings benefits to countries, it spares customers from inflated electricity bills. A smart meter is an important component of the smart grid. APPLICATIONS AND BENEFITS OF SMART GRID TECHNOLOGY • The smart grid enables integration and management of alternate energy sources such as solar and wind, providing seamless power supply, especially when there is a shortage of energy from conventional sources. • The technology empowers users with smart control over their electrical devices and keeps their electricity bills under control. The technology is especially helpful to enterprise customers, as they can continuously monitor their power consumption and adopt proactive measures to keep their energy expenses under control. • The smart grid divides energy consumption into two categories. It turns on select machines, for example a washing machine or an industrial machine, during arbitrary hours when the energy cost is lower. During peak hours, it could turn off such appliances automatically and reduce the demand. • The technology allows users to track how much electricity is used at a given time. The price of electricity is greater during peak hours and lower during off-peak hours. By convincing users about the economic benefi ts of using electrical appliances at the suitable hours, governments can fi ght the challenges associated with energy management. • The smart grid follows a system wherein the user pays only for the power they consumed, meaning they will not have to pay for the power lost due to power blackouts. GLOBAL SMART GRID MARKET SCENARIO Currently, the United States and the European Union are at the forefront of smart grid deployments.

A recent smart grid research report from ZP ryme Research & Consulting reveals that the global smart grid market is estimated to grow at an explosive rate, jumping from the current $69.3 billion to $171.4 billion by 2014. A major factor driving this growth is the rapid smart grid deployments happening in the United States. The $3.4 billion in smart grid grants announced by the Obama administration and several investments that followed the announcement encouraged the smart grid market in the country to grow to about $21.4 billion in 2009. The market will witness explosive growth in the coming years to hit at least $42.8 billion in 2014, the report said. According to Frost & Sullivan, the smart grid/ smart meter market in Europe is expected to reach $11 billion by 2015. The study covers market segments such as automated meter infrastructure, IT systems and communication technologies. While Italy scores as being the forerunner of the technology since 2005, Denmark gains the credit as the developer of the most intelligent grid to manage the power load generated by wind (the country currently meets approximately 20 percent of its total energy need from wind power). SMART GRID INITIATIVES IN CHINA No other country benefits from the power of the smart grid as China. In view of the massive industrial development in the region and acute power shortage, experts say the smart grid is the magical solution that improves the economy of electric supply, energy consumption and environmental protection in the country. China’s energy demands will double in the next ten years, say government officials. With this target, the country is keen to build a smart grid network. Over the past couple of years, the government spent massive amounts on conducting research and initiating smart grid infrastructure build-out. Official estimates say the smart grid initiatives in the country will take up enormous resources. Earlier last year, Bloomberg reported that China will spend as much as $10 billion a year through 2020 to build a modern grid. The State Grid Corp. of China (SGCC), China’s largest power grid builder that serves 26 provinces and 1.08 billion people throughout China, initiated the construction of a smart grid network earlier last year. The smart grid in China currently focuses more on the transmission side than the distribution side. This power grid will improve the power distribution and management between the remote thermal power stations and the regional power grids located in different parts of the country. A unified national power grid network project called the “West-East Electricity Transfer Project,” is underway in the country. The project includes construction of three major west-east transmission corridors, each of which will have a transmission capacity of 20 GW by 2020. The Chinese government hopes these power grids will balance the power generation and utilization disparities among different regions. Smart meter upgrade and transition to a national Smart Grid system are included as key components in China’s stimulus package announced in November 2008 and valued at about $586 million. According to official sources, Chinese utility companies may require approximately 300 million standard meters POWER INSIDER AUGUST/SEPTEMBER 2010 67

smart grid – both commercial and residential – during the country’s transition to a national smart grid system. As of 2008, only about 1 percent of China’s utility meters are automated. This indicates the sheer size of the smart grid market in the country. China has been attracting several smart grid companies since then. After setting strong momentum in the West, the smart grid companies are shifting their focus to the East. China, being the largest greenhouse gas (GHG) emitter in the world, is the obvious target for all of them. Recently, GE announced it is setting up a smart grid demonstration center in the Yangzhou New Economy and Development Zone. The demonstration center is set up with the goal of deploying some of GE’s tested smart grid technologies within four years in the region. The initial phase of GE’s demonstration will include wireless-enabled smart meters, home energy management systems, programmable thermostats and smart appliances. Grid infrastructure and control technologies in the demonstration include automated outage identification and restoration software, fieldforce automation and deployment systems and grid-wide network management software, according to GE sources. The demonstration center may also showcase home-based charging stations for plugin hybrid electric vehicles (PHE Vs). PHE Vs will gain popularity as they will reduce the country’s oil consumption and carbon footprint. “Yangzhou’s initiative will be a showcase to demonstrate how China can get the power it needs and reduce energy’s environmental impact at the same time,” claims Mark Norbom, president and CEO of GE’s China business. “China has experienced unbelievable growth over the past decade, creating a massive need for energy to power businesses and consumer lifestyles – so the time is right for Yangzhou to become a smart city.” GE is planning to collaborate with industry leaders to deliver a broad portfolio of carbon-smart technologies in the industry to modernize electrical systems from the power plant to the consumer, said company officials in a recent announcement. Cogo Group, a provider of platform services for the technology and industrial sectors in China, is keen to capitalize on the country’s Smart Meter upgrade over the next five years, according to Cogo officials. The company has already collaborated with several companies for a smart-meter rollout in China, including Holley Metering, Wasion and the Hexing Group. “We are very excited about the opportunities available to Cogo over the next few years with China’s new but rapidly growing Smart Meter upgrade,” said Jeffrey Kang, CEO and chairman of Cogo, in a recent announcement. “We expect that Smart Grid and Smart Meter are going to be key factors in the overall growth of our industrial business, which we expect to grow much faster than the overall company in 2010 and beyond.” In November 2009, IBM, a leading technology

provider, forged a partnership agreement with Chinese energy company ENN Group “to help Chinese companies and cities become more energy efficient,” according to an announcement from the company. ENN operates natural gas, biofuels and thin-film solar panel manufacturing businesses. Under this partnership, IBM will provide consulting and information technology services to ENN Group to help it become “a total clean energy solution and services provider,” an official statement said. Earlier last year, Accenture, a global technology services and outsourcing company, announced the creation of Accenture Intelligent City Network, aimed at bringing together utilities and city authorities around the world who are committed to deploying smart electric grids. East China Grid Co., a Chinese transmission company, is included as one of the initial members of the Network. Accenture has grabbed over 10 projects in the country so far. Hewlett-Packard (HP) recently announced it will buy network equipment manufacturer 3Com for $2.7 billion in a bid to grow its business in China. The acquisition of 3Com, which is a strong competition to networking major Cisco, will create tough competition in China where Cisco has already established its networking business in the energy sector. The combined offerings of HP and 3Com will be able to manage the surge of data generated by the smart grids. Added to this, the network security capabilities offered by 3Com’s TippingPoint intrusion prevention products will give an extra edge to their offerings. Global companies entering the Chinese market are a bit wary of their survival in the region. With the Chinese government encouraging the local companies alone to flourish in the country, foreign companies are likely to be treated with the “stepmother” attitude. To be on the safe side, the global giants are interested in smart partnerships with interested parties in China. This will result in a

win-win situation for both the global companies and their Chinese partners. China will attract more investment in the coming years in smart grid-related industries including smart metering systems, power storage devices, telecommunication devices and software. smart Grid ChallenGes Challenges involved in smart grid implementation are many. A relatively new technology, the smart grid market is faced with issues related to interoperability and data security. Many large-scale deployments are delayed due to lack of clarity in the business case, says Frost & Sullivan. Since the smart grid involves communication among different sets of devices, interoperability is of paramount importance. A smart grid system that is able to run on multiple standards will undoubtedly win in the marketplace. According to Frost & Sullivan analysts, having high product differentiation is important to survive in the highly competitive smart meter market. “Smart meter manufacturers need to move from a product- to a services-based model,” says Vikas Ravindran, Frost & Sullivan analyst. “Investments in meters alone will not yield higher returns. In order to rapidly gain market share, manufacturers need to customize their entire AMI solution for consumers.” The rising cost of electricity calls for energy efficient solutions like the smart grid in every market. Additionally, the ability of the smart grid to communicate energy usage data will attract both domestic and business customers, opening lucrative market opportunities for companies involved in this arena of business. Ravindran of Frost & Sullivan adds, “Moving forward, complete automation of the grid is set to become the norm with real-time information at the customers’ fingertips.”

‘Challenges involved in smart grid implementation are many. a relatively new teChnology, the smart grid market is faCed with issues related to interoperability and data seCurity. many large-sCale deployments are delayed due to laCk of Clarity in the business Case’ 68 august/september 2010 power insider

SMART METERING

AMR AND SMART METERING IN TENAGA NASIONAL BERHAD (TNB): LESSONS LEARNED AND THE WAY FORWARD Electronic meters, the main component of smart metering have been installed in TNB since 1985 and by the year 2002, TNB totally stopped the purchase of electromechanical meters. The capability of the electronic meters providing information on events and consumption pattern paved the way for Large Power Customers(LPC) AMR project in 2005. Currently with AMR, 45,000 LPC installed with electronic meters and GSM modems are monitored centrally daily and have their bills posted monthly relieving the burden of manual meter reading. Trials are underway to explore customers’ acceptance on paperless billing by posting their bills in TNB’s web page as well as auto email to ensure faster delivery of bills. Proposals are also in place to extend the half hourly metering information to the customer via AMR’s web page as an initial start to smart metering of LPCs. EXISTING AMR EXPERIENCES The AMR project has been an eye opener on the need to ensure the overseas AMR software provider is very well aware of the local conditions before the start of the project and not make assumptions based on their own country. The importance of having technical competent personnel based locally is vital to ensure project continuity and not having to wait for technical assistance from abroad. • The fact that the AMR project comprises of many parties of different business interest and different technical competencies require close coordination from all the different parties namely • Metering system and site communication equipment • communication infrastructure • AMR software and hardware supplier • TNB’s own ICT infrastructure involving network and billing system It can be deduced that IT & communication infrastructure are the main deciding factor in the success of AMR project. In our experience, the leap from GSM calling of 3000 customers in 2006 to 45,000 customers simultaneously in 2008 had caused an unexpected high number of failures in both calls to customers and transaction processing of the software. After a long painstaking process of fact finding due to the simultaneous happening of failures and multiple root causes, AMR processes had to be reviewed in order to handle limitations of all parties concerned as well as upgrading of Telco’s 70 AUGUST/SEPTEMBER 2010 POWER INSIDER

communication equipment, AMR software and hardware. If transparency and commitment of the involved parties was achieved earlier, the project recovery time could have been faster. Back in 2006, at the start of AMR project, GSM was the preferred choice seen to be able to cover the scattered LPCs all over Malaysia as GPRS was still not widely used. Now, the expectation is to migrate all 45,000 customers by 2013 and new installations to GPRS. Telcos are saying that the technical support for GSM from 2013 will be on best effort basis only. Learning from previous experience, public

communication services shall now be multi sourced depending on their areas of strength and reliability of continous signal. Guaranteed capability of Telco’s GPRS infrastructure handling large amount of data simultaneously must be tested repeatedly before the migration exercise to avoid the same problems from happening again. Another important factor to consider in project implementation is the automated update of customer metering system data in both AMR software and billing system to ensure automated matching and integrity. Manual updating of the customer metering

system have caused errors in data mismatch causing failures of AMR as well as billing output and these errors will continue to happen from time to time reducing success rate. Thus the automation process should encompass the whole aspect of metering process on customer and meter maintenance; not just cover meter reading and billing of customer only, even though it would increase the project cost. AMR CONTRIBUTIONS Even though there are shortcomings, AMR has positively contributed to reducing manhour required in producing the bills. Similarly, the bill delivery process has been automated to be sent through the postal service further reducing TNB’s manhours. Improving further still, auto email and autofax of bills are currently on trial to gauge customer’s acceptance. Once customers are receptive of email communications, there are proposals of setting up basic information kits raising customers awareness of TNB’s latest initiative and how to monitor their energy consumption. Permanent help desks need to be set up to handle email queries either from TNB or customers once notifications of sudden changes in energy consumption are send out to customers mainly to help them be aware of possible faulty equipment for sudden increase of consumption. Full details of energy profiles will be made available through TNB website with daily updates which is the current practice. Manually input data in the metering and billing system are matched with AMR software to enable success in calling the meters for billing thus disallowing reading and billing discrepancies. Metering faults or irregularities will be detected from the raised alarms retrieved in the AMR software highlighting immediate action is required to rectify the fault. In addition, energy profiles in AMR are further processed and analysed to identify possible dishonest attempts to steal electricity from the identified reduced consumption data flagged in

AMR reports. Hitherto, the detection of theft cases have doubled with increased accuracy and realization of this alarming trend in the increase of theft cases has warranted for a special department to be set up to focus on recovering loss of revenue. EXPANSION: SMART METERING OR ADVANCED METERING INFRASTRUCTURE (AMI)? Realistically, much need to be done with the present communication and IT infrastructure before TNB can really venture into smart electricity metering for all types of customers, especially residential customers. AMI seem to be even more daunting where interconnection is required between electricity, water and gas meters as well as home appliances with real time information to monitor and control energy consumption. However, it is seen that some of the features of smart metering do complement TNB’s business needs such as getting accurate registration of energy usage per customer as well as per area for theft cases and remote control of the meter namely disconnection and reconnection of non paying customers. In view of the challenge of handling the voluminous metering data and securing data as well as commands remotely administered, many factors need to be addressed first. The roadmap shall define the main criteria namely meter features, type of metering data required, communication and gateway choice, and data processing concept. Below are some of the main factors that need to be evaluated and decided upon: A EXTENT OF METER FEATURE AND METERING DATA REQUIRED • Currently, only 3 phase electronic meters record half hourly kW and kVar and all meters have no control features. • In view of fast changing communication technology, there is the risk of modems being obsolete faster than meters and are purposely built with shorter life. Hence, the

preference for interoperability of external modems with multi types of meters B HYBRID COMMUNICATION OF MULTI SOURCED PRIVATE AND PUBLIC TECHNOLOGY • The choice of private communication will correlate to the need of having proprietary communication protocol and different AMR software. What is the level of integration required if there is a need to have different private communication? • Private communication operation usually end at the customers end and data need to be collected from minimum 500 meters or more. The transmission of large metering data at the collector then have to use public communication. Can the public Telco guarantee and secure uninterruptible large data transmission at one go? C TYPE OF GATEWAY REQUIRED • How much customer interaction is required? • How much data will be transmitted? • Speed of data and response time expected D DATA PROCESSING CONCEPT • Centralised or regional? • Network capacity required? • Integrity and Security As seen above, a lot of questions need to be answered for the roadmap to be firmed up for smart metering implementation. Sufficient resources and the right capacity infrastructure must be made ready in tandem with the modus operandi of the project. The specification of smart metering will depend on the requirement of the smart grid to be formulated for TNB. • Rosila Senan TNB Email: rosilase@tnb.com.my

POWER INSIDER AUGUST/SEPTEMBER 2010 71

EvEnts listing September 2010 6 sep - 10 sep

25th european photovoltaic solar energy conference and exhibition and 5th world conference on photovoltaic energy conversion Feria Valencia, Convention & Exhibition Centre, Va, Valencia, Region Velancia, Spain. organisers: WIP â&#x20AC;&#x201C; Renewable Energies email: pv.conference@wip-munich.de url: www.photovoltaic-conference.com 8 sep - 10 sep

project flow conference The Palmer House Hotel, Chicago, IL, USA. organisers: Realization Technologies, Inc email: pf2010@realization.com url: www.realization.com/events.html 8 sep - 9 sep

instrumentation scotland & offshore systems Aberdeen Exhibition Centre, Aberdeen, Scotland, United Kingdom. organisers: Trident Exhibitions Ltd email: info@trident-exhibitions.co.uk url: www.instrumentation.co.uk 12 sep - 15 sep

autovationÂŽ 2010 Austin Convention Center, Austin, Texas, USA. organisers: Utilimetrics email: info@utilimetrics.org url: www.utilimetrics.org 13 sep - 16 sep

8th international conference on railway bogies and running gears Budapest University of Thechnology and Economics, Budapest, Pest, Hungary. organisers: Dept. of Railway Vehicles at the Budapest Univerws email: bogie10@rave.vjt.bme.hu url: www.railveh.bme.hu

url: www.energetab.pl 21 sep - 22 sep

process safety and e&p in petrochemical facilities conference The Crowne Plaza Houston North Greenspoint, Houston, TX, USA. organisers: Arena International email: book@vibevents.com url: www.arena-international.com/process-safety/ index.html

smart grids summit 2010 Malaga, Spain. organisers: World Trade Group email: laurence.allen@wtgevents.com url: www.thesmartgridsummit.com

22 sep - 24 sep

metering, billing/crm europe 2010 Reed Messe Wien, Vienna, Austria. organisers: Synergy email: info@metering-europe.com url: www.metering-europe.com

hydro 2010 international conference & exhibition Lisbon Congress Centre, Lisbon, Lisbon, Portugal. organisers: Hydropower & Dams Journal email: sales@hydropower-dams.com url: www.hydropower-dams.com

14 sep - 16 sep

gas infrastructure world caspian 2010 Hyatt Regency, Baku, Azerbaijan. organisers: Terrapinn email: benjamin.gill@terrapinn.com url: www.terrapinn.com

27 sep - 30 sep

clean technology investment world asia 2010 Conrad Hotel, Hong Kong, Hong Kong. organisers: Terrapinn email: christine.foo@terrapinn.com url: www.terrapinn.com/2010/cleantechasia/

14 sep - 16 sep

energetab 2010 ZIAD, Bielsko - Biala, Silesia, Poland. organisers: ZIAD email: wystawa@ziad.bielsko.pl 72 august/september 2010 power insider

27 sep - 29 sep

italian energy summit 2010 Sala Collina, Il Sole 24 Ore, 91 Via Monte Rosa, Milan, Italy. organisers: Informa email: annabel.clifford@informa.com url: www.informaglobalevents.com

22 sep - 24 sep

smart homes 2010 Reed Messe Wien, Vienna, Austria. organisers: Synergy email: corien@synergy-events.com url: www.smarthomes2010.com

27 sep - 29 sep 13 sep - 14 sep

London, United Kingdom. organisers: Arena International email: events@arena-international.com url: www.arena-international.com/power/ nuclearwaste/index.html

27 sep - 28 sep

nuclear waste: the challenge of interim storage and long-term disposal 2010 conference

October 2010 4 oct - 6 oct

soe 2010 Schiedam harbor, Schiedam, Zuid Holland, Netherlands. organisers: Euracon & Kone email: info@soe2010.com url: www.soe2010.com 4 oct - 6 oct

power-gen middle east Qatar International Exhibition Centre, Doha, Qatar. organisers: PennWell email: attendingpgme@pennwell.com url: www.power-gen-middleeast.com 6 oct - 8 oct

the 8th annual global reserves summit 2010 Venue to be confirmed, London, United Kingdom. organisers: IQPC email: enquire@iqpc.co.uk url: www.globalreservessummit.com 6 oct - 7 oct

energy solutions expo London Olympia, London, United Kingdom. organisers: UMB Business Media email: mark.rimmer@ubm.com url: www.energy-expo.info

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We recognise that every shipment is unique and tailor our service to meet your individual needs. Let us care for your cargo while you focus on your business. We promise to look after your cargo, as if it was our own. Contact us now to discuss your shipping and project logistic requirements. Robert Hill MICS Email: robert@southseashipping.com Tel: + 64 29 962 8672 Fax: + 64 3 942 5771 www.southseashipping.com

EvEnts listing Organisers: European Powder Metallurgy Association Email: pm2010@epma.com URL: www.epma.com/pm2010 17 Oct - 19 Oct

POwER GEnERatiOn MiddLE East Abu Dhabi National Exhibition Centre, Abu Dhabi, United Arab Emirates. Organisers: IIR Middle East Email: pgwme@iirme.com URL: www.powergenerationme.com 19 Oct - 21 Oct

EP china 2010 - thE 13th intERnatiOnaL ExhibitiOn On ELEctRic POwER EqUiPMEnt and tEchnOLOGy China International Exhibition Center, Beijing, Beijing, China. Organisers: China Electricity Council, Adsale Exhibition Servi Email: power@adsale.com.hk URL: www.2456.com/ep 19 Oct - 21 Oct

ELEctRicaL china 2010 - thE 6th intERnatiOnaL ExhibitiOn On ELEctRicaL EnGinEERinG, ELEctRicaL EqUiPMEnt and cOntRactORs’ sUPPLiEs China International Exhibition Center, Beijing, Beijing, China. Organisers: China Electricity Council, Adsale Exhibition Servi Email: power@adsale.com.hk URL: www.2456.com/ep

china intERnatiOnaL ExhibitiOn cEntER, bEijinG, bEijinG, china.

Organisers: China Electricity Council, Adsale Exhibition Servi Email: power@adsale.com.hk URL: www.2456.com/ep 19 Oct - 21 Oct

EcEP china - 2010 intERnatiOnaL ExhibitiOn On EnERGy cOnsERvatiOn, EnviROnMEntaL POwER tEchnOLOGy and REnEwabLE EnERGy China International Exhibition Center, Beijing, Beijing, China. Organisers: China Electricity Council, Adsale Exhibition Servi Email: power@adsale.com.hk URL: www.2456.com/ep 19 Oct - 22 Oct

santOs OffshORE OiL & Gas ExPO and cOnfEREncE Mendes Convention Center, Santos, São Paulo, Brazil. Organisers: AGS3 Promoções e Eventos Email: conferencia@santosoffshore.com.br URL: www.santosoffshore.com.br

EPa 2010 - 2010 intERnatiOnaL ExhibitiOn On ELEctRic POwER aUtOMatiOn EqUiPMEnt and tEchnOLOGy

advERtisER indEx metrocis

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sulzer

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Korto

page 11

sapa

page 27

Wartsila

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albacor

page 47

Korto

page 37

powergen asia

page 51

renewable energy World

page 58

gea Heat exchangers

page 69

south sea shipping

page 73

set 2011

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74 august/september 2010 POwER insidER

20 nOv - 20 nOv

nUcLEaR fORUM The Sheraton Hotel, Pretoria, South Africa. Organisers: Siyenza Management Email: info@siyenza.za.com URL: www.siyenza.za.com 24 nOv - 26 nOv

2010 china intERnatiOnaL ExhibitiOn On cOaL PROcEssinG & UtiLizatiOn and cOaL chEMicaLs China International Exhibition Center, Beijing, China. Organisers: China Coal Processing & Utilization Association Email: CCPUE.catherine@gmail.com URL: www.CCPUE.com 25 nOv - 27 nOv

21 Oct - 22 Oct

49th cOnGREss Of navaL aRchitEctURE and thE MaRitiME indUstRy Hotel Carlton, Bilbao, Vasque Country, Spain. Organisers: Association of Naval Architects of Spain Email: aine@iies.es URL: www.ingenierosnavales.com/SESIONES2010/ index2_i.asp 25 Oct - 27 Oct

19 Oct - 21 Oct

16 nOv - 19 nOv

LnG OUtLOOk asia 2010 Raffles City Convention Centre, Singapore, Singapore. Organisers: Terrapinn Email: yeeling.chua@terrapinn.com URL: www.terrapinn.com/2010/lngasia

7th intERnatiOnaL RaiL fORUM 2010 Feria de Valencia Pabellón 5, Valencia, Europe. Organisers: Montané Comunicación Email: info@railforum.net URL: www.railforum.net November 2010 2 nOv - 4 nOv

POwER-GEn asia Marina Bay Sands Resort, Singapore. Organisers: PEnnwELL Email: attEndinGPGa@PEnnwELL.cOM URL: www.POwERGEnasia.cOM 2 nOv - 4 nOv

REnEwabLE EnERGy wORLd asia Marina Bay Sands Resort, Singapore. Organisers: PennWell Email: attendingrewa@pennwell.com URL: www.renewableenergyworld-asia.com 16 nOv - 19 nOv

OiL & Gas invEstMEnt asia 2010 TBC, Sinagapore, Singapore. Organisers: Terrapinn Email: yeeling.chua@terrapinn.com URL: www.terrapinn.com/2010/asiaoilgas

siPPE 2010 shanGhai 5th intERnatiOnaL PEtROLEUM PEtROchEMicaL natURaL Gas tEchnOLOGy EqUiPMEnt ExhibitiOn SNIEC, Shanghai, China. Organisers: Shanghai AiExpo Exhibition Service Co., Ltd Email: rosie@aiexpo.com.cn URL: www.sippe.org.cn 25 nOv - 27 nOv

siPPE 2010 shanGhai 5th intERnatiOnaL PEtROLEUM PEtROchEMicaL EqUiPMEnt ExhibitiOn Shanghai New International Expo Center (SNIEC), Shanghai, China. Organisers: Shanghai AiExpo Exhibition Service Co. Ltd Email: rosie@aiexpo.com.cn URL: www.sippe.org.cn 25 nOv - 28 nOv

aiRtEch Cairo International Convention Center, Cairo, Egypt. Organisers: International Fairs Group Email: info@ifg-eg.com URL: www.ifg-eg.com 29 nOv - 30 nOv

OiL and Gas sUPPLy chain ManaGEMEnt Millennium Gloucester Hotel, London, United Kingdom. Organisers: SMi Group Email: agibbons@smi-online.co.uk URL: www.smi-online.co.uk/supplychain4.asp

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