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 VOLUME 2, ISSUE 5
VIETNAM
UNDER PRESSURE TO DELIVER
PLUS ·
• Vietnamese Market Overview • Vietnamese Renewable Forecast · • Desalination Roundtable
FEATURES INSIDE: An exclusive interview with the new TNB chief | Comprehensive Chinese Wind Review | Third Party Testing | Indonesia Gen-set Operations PI_SepOct_Cover.indd 2
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Day 1
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Day 15
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Day 20
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welcome The power insider offices have been hectic over the past 27 few weeks! After a hugely successful trip too thailand to attend powergen Asia, we certainly caught up with many clients, and many new potential clients. we ran out of publications and couldn’t seem to restock the shelves as quick as they were being taken which is a great testament to the team and our army of loyal followers.
ConTaCT us: Editor: Charles Fox Contributing Editor: Rachael Gardner-Stephens Journalist: Robin Samuels Creative Director: Colin Halliday Sales Director: Jacob Gold International Sales Manager: Sam Thomas Account Manager: Daniel Rogers Sales Executive: Kayleigh Jeanes Accounts & Customer Service Manager: Katherine Stinchcombe 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
this edition looks at Vietnam. throughout the twentieth century, Vietnam has suffered massive turmoil. After many wars, Vietnam has struggled to retain a strong economic position in the years post war. Due to these issues, Vietnam has not reached its potential for electrical supply. there are however government plans for the growth of this sector, which again is not without problems, delayed construction, lack of finance and capital investment but more importantly depletion of natural resources and continuing reliance on them. In this edition we look at as many aspects as possible to give you a great understanding of succeeding in this marketplace. we also take the time to look at water treatment and desalination; we speak with 3 industry leaders on their views of the Asian market. we also cover our usual features, wind, solar, renewable energy, power generation and technical overviews.
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I don’t want to ruin anymore of the surprise! so please read on and enjoy this great edition! All the best
Charles Fox ediTor
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SKS Global Power Insider Asia magazine is published bi-monthly 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.
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CONTENTS 6
News
Market 27 Overview: Vietnam Sells Soul to Coal 10 Third Party Testing
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Hydro Report: Dammed Vietnam
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Renewable Energy in Vietnam: Untapped potential
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Passionate about PV with 3S
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Water Treatment and Desalination in Vietnam 46 Desalination Roundtable
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Electrifying a nation: Indo MOEMR’s Waryono Karno
60
Cummins helping Indonesia
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Minding Thermal Power: PT Bumi Resources 68 Genset Control with ComAp
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A new age for TNB
72
Chinese Wind Review
76
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A look into the issues surrounding surge
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protection
84
HRSG Insulation
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NEWS DESK GOLDWIND PROVIDES THAI WIND PROJECT WITH THREE TURBINES Chinese turbine maker Goldwind has signed a deal to provide three of its lowwind 2.5MW machines to a project in Thailand. The company signed an agreement with Electricity Generating Public Company (EGCO), a subsidiary of the State Grid Corporation of Thailand, to provide the turbines to the Theppana wind farm, located about 250km northeast of Bangkok. It will be Goldwind’s first project in Southeast Asia and is also EGCO’s first wind farm. The project is expected to complete construction in the third quarter of 2013. Thailand has a small but growing wind market and is aiming to install 1.2GW of capacity by 2021. Goldwind says it has already installed 132.5MW of its 2.5MW low-wind turbine model, which has been developed for average annual wind speeds of 6.5-7.5m per second. Goldwind said the project marks its second overseas project in Asia. Goldwind’s first overseas wind project in Asia is under construction in Pakistan. That project will use high temperature series PMDD turbines. The wind farm is located in Chaiyaphum province, in the northeast of Thailand, about 250 km from Bangkok.
The local air density is rated at 1.137 kg per cubic meter. And the annual average maximum temperature reaches 40°C above and lowest of about 12°C
COMPANY NEWS FROM AROUND THE WORLD
TNB win the Prai Combined Cycle Project
Tenaga Nasional Bhd (TNB) has won the international bid to develop a new Combined Cycle Gas Turbine plant (Track 1) in Prai, Penang worth RM3 billion. Chairman of the Energy Commission, Tan Sri Dr Ahmad Tajuddin Ali, said with the bidding
results out, TNB can now build, operate and own the integrated gas turbine power plant with a capacity of 1,071 MW and a tariff of 34.7 sen/kWh. The plant is scheduled for operations on March 1, 2016. For the Track 1, from the eight bidders selected, six made their offers through the International
Competitive Bidding (ICB) standard which was newly introduced to offer the best in value to the country while raising the level of efficiency and transparency in government delivery. “The combined cycle gas turbine plant (Track 1) will be using two units of the Siemens Technology H-Class turbine gas which
will see a performance efficiency of 60 per cent for the plant when it begins operations in 2016 compared with a 55 per cent efficiency rate offered by the existing F-Class technology,” Ahmad Tajuddin said. He said this when announcing the results of the international bid for the power plant
development in Prai and on the extension of the power purchase agreement for the first generation independent power producers, here, today. Meanwhile, Genting Sanyen Power, Segari Energy Ventures and TNB’s Pasir Gudang plant have been offered extension for their existing first
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ANDHRA PRADESH ANNOUNCES ATTRACTIVE FIRST SOLAR POLICY
RELIANCE INCREASES COOPERATION WITH CHINA
Reliance Power, part of Reliance (ADA) Group, has formed a strategic partnership with China Datang Corporation (CDT) for development and operation of power and energy projects in India and overseas. CDT is represented by the China Datang Overseas Investment Company (CDTO). CDT, a major power producer in China, has a power generation capacity of over 1 lakh mw, and is amongst China’s top 50 companies. The partnership envisages co-operation in the areas of coal mining and O&M services to power plants. Reliance Power has three coal mines in South Sumatra in Indonesia having 2 billion tonnes of coal resources. The collaboration will cover development of the coal mines including investments, development of transportation infrastructure and off-take of coal. The O&M services will relate to power plants in India and other identified markets, including Reliance Power’s own power generation units. PLN looks towards solar power for remote islands Indonesia-based state utility company Perusahaan Listrik Negara (PLN) is set to complete the construction of 100 solar power plants on remote islands to provide for their electricity requirements. The project costs around $63m with the solar plants located in West Papua, North Maluku, East Nusa Tenggara, South and Southeast Sulawesi and South Kalimantan. PLN eastern Indonesia operational director Vickner Sinaga commented that the solar plants will have a total capacity of 18,150kWp and 80 of them will get constructed by the end of 2012 with the remaining expected to be completed next year. The utility was instructed by the Indonesian government a few years ago to supply an additional 55,000MW by 2019 and increase the electrification rate of the islands. According to Vickner the government initiated projects to add another 30,000MW of power to the national grid by 2014 through a fast-track program using coal, geothermal and hydroelectric resources.
generation IPP’s plants and TNB (Track 2). “Genting Sanyen Power, with a 675 MW capacity, and tariff of 35.3sen/ kWh will have a term of 10 years; Segari Energy Ventures, with 1,303 MW capacity, tariff of 36.3 sen/kWh a period of 10 years and TNB Pasir Gudang with a capacity of 275 MW, tariff of 37.4 sen/kWh
will have a period of five years,” he said. He said the tariff rate offered under the Track 1 and Track 2 bidding were based on the price projection for gas in the market at RM42.24/GJ by 2016.“The gas price used in the assessment of the two bids was the market gas price and not the subsidised gas price,” he said.
He said the Track 1 and Track 2 were in line with plans to increase capacity to cater to increased demand for electricity power throughout the peninsula by 2016/17.
Vang Ang 2 get’s the green light
Investors behind Vung Ang 2 thermal power plant are expected to
INDIA’S ANDHRA PRADESH STATE introduced its first solarenergy policy, offering tax benefits to projects and exemptions from power-transmission fees as the local government seeks investment to curb electricity shortages. Plants built by June 2014 will be able to claim the incentives for seven years, according to an order issued yesterday by the state energy department. “If executed appropriately, this policy would enable Andhra Pradesh to get a huge influx of investment from solar developers,” said Vishal Pandya, director at REConnect Energy Solutions Pvt., which advises companies in the industry. The southern state, which says it gets some of India’s highest sun irradiation, is promoting solar energy to boost generation capacity after suffering a 17.3% power deficit in July. It’s working with other states toward a national goal of becoming one of the world’s fastest-growing solar markets, with a targeted 20,000MW across India by 2022. Andhra Pradesh didn’t set a specific goal for solar installations or announce higher tariffs, unlike the central government and Gujarat and Karnataka states, which have awarded above-market rates to developers for a limited amount of capacity. To attract investment, Andhra Pradesh will waive transmission fees for using state-owned infrastructure. It also won’t charge a socalled cross-subsidy fee, which is levied to compensate state-owned distributors for losses they incur on supplying power below cost to households and farmers. Solar projects will get refunds on value-added tax paid for equipment and on land duty and registration charges for sites. In addition, the state plans to speed up the approvals process, issuing permits to build grid connections within 21 days.
sign a build-operatetransfer contract before the year of this year. It will become the third foreign-invested build- operate-transfer (BOT) power project in Vietnam over the past decade, following Mong Duong 2 plant invested by AES Corporation, Posco Power and
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NEWS DESK QUENCHING MELBOURNE’S THIRST The first drinking water from the Wonthaggi desalination plant near Melbourne that will be Australia’s biggest has been produced during an initial performance test. Production meeting the governments drinking water guidelines will be increased during commissioning over the next few months with the plant capable of full production by the end of the year, Thiess Degremont said in a statement. Suez Environment subsidiary Degremont won a 30-year government contract in 2009
to build and operate the desalination plant through a partnership with Aquasure that includes Thiess. When finalised, it will provide 30 percent of Melbourne’s water needs. Suez, the second-largest water company, last month took a second impairment since October related to the development of the plant on rising costs, strikes and delays. The Paris-based utility was forced to scrap a planned increase in the 2011 dividend due to plant expenses.
EGCO LOOKS FOR OPPORTUNITY IN THE PHILIPPINES THAI power firm Electricity Generating Public Co. Ltd. (EGCO) is keen on expanding its presence in the Philippines through acquisitions and construction of new plants as it notes the economy’s rising demand for energy. EGCO is the international investment arm of Thai state-run firm Electricity Generating Authority of Thailand. The Thai firm is on the lookout for opportunities to build plants with capacities ranging from 80 megawatts (MW) to 500 MW that will run on various resources like hydro, coal and natural gas as well as to acquire interest in existing facilities, Quezon Power (Philippines) Ltd. Co. (QPL) Managing Director Frank Thiel said after the 2012 Philippine Energy & Infrastructure Business Meeting at Makati Shangri-La on Tuesday. “EGCO’s desire is to expand its presence in the Philippines. We can do hydro, coal, even natural gas. We’re not being constrained by size and technology,” Mr. Thiel said. “We’re also on the hunt for potential acquisitions with those companies who desire to perhaps exit or sell even a small portion,” he added.“It’s a matter of evaluating opportunities. Were wide open right now.” He clarified, however, that his company is not looking at those on the privatization
COMPANY NEWS FROM AROUND THE WORLD China Investment Corporation, and the Hai Duong power plant invested by Malaysia’s Jaks Resources. Minister of Industry and Trade Vu Huy Hoang asked General Department of Energy and related agencies to expedite negotiations for the Vung Ang 2 project before October 15, 2012 to enable investors start construction next year.
The 1,200 megawatt Vung Ang 2 project is a part of Vung Ang thermoelectricity power centre in central Ha Tinh province, where PetroVietnam is building another 1,200 megawatt power plant known as Vung Ang 1. The new project is being built by the Vung Ang 2 Thermal Power Joint Stock Company (VAPCO), a joint venture between the local
firm Refrigeration Electrical Engineering Corporation (REE) and OneEnergy Asia Limited, which is a 50/50 partnership of Hong Kong’s CLP Holdings and Japan’s Mitsubishi Group. VAPCO was established in 2007, with BOT contract negotiations starting in 2009. Conversion of foreign currency has proven to be a tricky obstacle
in BOT contract negotiations. Under the prime ministerial Document 1604/TTg-KTN, the Vietnamese government guarantees conversion into US dollar for 30 per cent of the project revenue in VND. However, investors of BOT power projects with ongoing negotiations such as Vung Ang 2 and Van Phong requested up to 100 per centforeign currency exchange guarantee.
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INDONESIA GETTING SMART WITH ALSTOM
block. Mr. Thiel said EGCO is bullish in the Philippines because of its booming economy, which is fueling demand for more power“We see the demand keeps increasing. We see potential need for additional capacity as government said there is a need to add 400 MW per year for the next few years just to stay ahead of the game, just to meet the demand that continues to rise,” he said. For now, the company has not spotted potential acquisitions yet as the market is doing well, making it hard for companies to sell their interest in power plants. “On power plant acquisitions, I think it would be tough to find because usually when a market’s doing well, it’s difficult to find someone willing to sell,” Mr. Thiel said.“So we’re looking for someone wanting to divest, maybe not the entire thing. We’ll be interested in that.” EGCO currently has a 98% stake in QPL, which operates a 460-MW coal-fired power plant; a 31-kilometer, 230-kilovolt double circuit transmission system and related facilities in Mauban, Quezon province. In May, EGCO raised its stake in Quezon Power to the current level after acquiring an additional 45.875% from US firm InterGen for $375 million. About 2% is held by PMR Ltd.
World Bank Approves Multi-Million Efficiency Fund in Vietnam
The World Bank has approved a US$449 million loan to Vietnam for a project aiming to streamline electricity distribution across the country and reduce greenhouse gas emissions. The $800 million Distribution Efficiency Project is an effort to
Alstom, a global leader in energy and transport infrastructure have recently introduced its Agile digital substation technology as part of the “smart grid” technology products, to enhance energy transmission and distribution networks through digital control and monitoring. Grégoire PouxGuillaume, executive vice president of Alstom, said his firm, which has operated in Indonesia since 1996, would use the technology to assist Indonesia’s state electricity company PT PLN to improve its service, and assist in developing a smart grid in Indonesia. Poux-Guillaume stated “We met with PLN recently and discussed a pilot installation of the digital substation. Things will happen, and I am sure we are going to do demonstration with them soon,” said Poux-Guillaume on the sidelines of a recent the CIGRE event, where the technology was launched. The Agile digital substation provides instant communication with numerous electrical power substations to promote communication, protection and primary equipment management. Alstom believe that this technology will help reduce carbon emissions, increase efficiency and reduce overall consumption. Poux-Guillaume revealed “If you look at countries that have widely adopted the deployment of digital substations, a great example is China. Indonesia is not a fast mover in this area, but this technology is going be a big part of the solution going forward for Indonesia. We discussed it with PLN in July and I have high hopes that we’ll have something going pretty soon,” he said. In his speech, Poux-Guillaume pointed out key benefits of the digital substations, including enhanced safety and reliability and improved safety for
meet the objectives of Vietnam’s National Energy Development Strategy to 2020 by reducing investment needs in the power sector, strengthening energy security and responding to climate change. The project covers the construction and reinforcement of electricity distribution networks, the introduction of smart grid technologies in distribution
and a technical assistance and capacity building facility for the Electricity Regulatory Authority of Vietnam (ERAV) and five power companies to develop efficient electricity tariffs and design effective energy demand programs. Along with the funding from WB, $30 million will come from the Clean Investment Fund (CTF) and $8 million will
substation operators, which is an important factor to consider. By operating remotely, he said, PLN could use real time data to take action faster and mange its grid more effectively. “It makes easier to manage the grid because you have complete information from all the substations. You know what’s happening and you can take action before it’s too late. So, the more a country is spread out, the more it has difficulties in accessing substations, and the longer the distances, the better the business case is for installing digital substations.” Indonesia is a great example of this with a sprawling layout and also still rely heavily conventional technology and copper wiring. “Currently your install base is conventional, and you wouldn’t really get much of a benefit from the first few digital substations. It is when you start installing quite a few of them that you really get the most value,” Poux-Guillaume continued. Poux-Guillaume said that Alstom are really focused on further expanding in Indonesia rather than on developing efforts elsewhere, adding that the company hoped to implement a mass of new technological upgrades across the country. Yves Doin, the firms’ research and development director for gas-insulated substation products, pointed out that the main issue in switching to a new technology was training people. “If I introduce this new technology, I need all the people trained for this. Sometimes it’s not easy to move all these guys to this kind of new technology,” Doin said. However, Alstom is now facing increased competition in the field of power generation with the entry of Chinese companies, putting pressure on the firm to maintain its place in the market
be contributed by the Australian Agency for International Development (AusAID). The remaining $313 million will come from the Vietnamese government. According to the World Bank, the loan has an interest rate of 1.25 percent, a service charge of 0.75 percent and a 25-year repayment period with a five-year grace period. POWER INSIDER SEPTEMBER/OCTOBER 2012 9
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vietnam overview
VIETNAM SELLS S V
ietnam has suffered massive turmoil throughout the twentieth century. Having only become a unified and independent country in 1975 after three decades of bitter wars, Vietnam struggled to regain a strong economic position in the years that followed. As a consequence of the political and economic upheaval, Vietnam has not fully developed, facing a number of problems with their electricity supply. Power plants have a combined capacity of a mere 21GW, which is only sufficient to meet one-tenth of the power demand. This demand is increasing by between 11 and 13% per year, whilst the population is expected rise by 1 million every year until 2020. Despite government plans for the growth of the power sector, many problems still plague the sector. These problems include delayed construction schedules of power plants and power network projects, lack of investment capital and resources of hydropower, coal, and gas becoming exhausted. Nevertheless, in recent years the Vietnamese power sector has grown rapidly, significantly contributing to economic development. Last year the government approved the plan on national power development for 2011-20, also called in the Power Master Plan VII. According to the plan, Vietnam will have a power generation capacity of 75GW by 2020 and 146GW by 2030. This will require a total investment of $48.8 billion by 2020. Two-thirds of the $48.8 billion raised will be used to build new plants, and the rest will be invested in power-transmission systems. Vietnam will also seek foreign direct investment and official development aid for the projects, as well as commercial loans. The Power Master Plan VII sets out four specific targets for Vietnam’s power development: 1. Increase the aggregate output of imported and produced electricity from 194-210 billion kWh by 2015 to 330-362 billion kWh by 2020 and 695-834 billion kWh by 2030. 2. Give priority to the development of renewable energy to increase its percentage from the present 3.5% of the total electricity production to 4.5% in 2020 and 6% in 2030. 3. Reduce the average energy elasticity ratio (the ratio between the growth rate of energy consumption and the growth rate of GDP in the same period) from the current 2.0 to 1.5 in 2015 and 1.0 in 2020. 4. Promote the electrification program in rural, mountainous and island areas so that most of the rural households will have access to the electricity by 2020. As Figure 1 demonstrates, coal-fired power plants will remain the most important source of electricity in Vietnam. To secure the supply of coal, Vietnam is negotiating with nearby countries, including Australia and Russia, to import coal on a long-term and stable basis. The country’s first ever coal import shipment of 9,570 metric tons arrived in June this year from Indonesia. Financial incentives will also be given to enterprises that develop new and renewable energy from agricultural wastes and garbage of the cities. Vietnam will also begin to operate the country’s first nuclear power plant in 2020 and will develop their nuclear program until it accounts for 10.1% of the total power in 2030. Power imports, mostly from China, Laos and Cambodia, will equal 3.1% of the country’s total installed generation
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S SOUL TO COAL
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vietnam overview Figure 1: energy wind power Biomass power Hydropower pumped storage Hydropower
capacity by 2020 1,000 Mw 500 Mw 17,400 Mw 1,800 Mw
capacity by 2030 6,200 Mw 2,000 Mw / 5,700 Mw
Gas-fired thermal power
10,400 Mw (with electricity production of about 66 billion kwh)
coal-fired thermal power
36,000 Mw (with electricity production of about 156 billion kwh)
11,300 Mw (with electricity production of about 73.1 billion kwh) 75,000 (with electricity production of about 394 billion kwh)
nuclear power
LnG power
First nuclear power plant to be put into operation. 2,000 Mw
capacity by 2020. Additionally, power plants with an installed capacity of 30MW or more will have to bid to sell their output to distribution companies. Wind-power plants, plants built under the buildoperate-transfer mode, and major hydropower plants are exempted. The capital required for developing the power sector over the next two decades is an estimated USD123.8 billion.To raise these funds, the Power Master Plan VII sets out various policies to attract foreign investment. These policies include diversifying the form of investment, reducing the capital raising costs for power projects and forming local and overseas joint ventures in construction and development of power projects. To address one of the root problems in attracting foreign investment, the State will raise the electricity tariffs step by step to 8-9 US cents per kWh by 2020 in order to bring the electricity tariffs closer to the market price to ensure reasonable returns for the investors. The Government of Vietnam has also been collaborating with the World Bank to provide new electricity connections to improve the quality of service to consumers. The World Bank has now approved an investment fund for a project that will provide reliable and steady supply of electricity for consumers in Vietnam. The project covers the construction and reinforcement of electricity distribution networks, the introduction of smart grid technologies and technical assistance for the Electricity Regulatory Authority of Vietnam (ERAV) and five power companies. The total project cost is estimated at $800 million. The World Bank will contribute $449 million and $30 million will come from the Clean Investment Fund (CTF) for the implementation of the smart grid technology. The Australian Agency for International Development (AusAID) will provide $8 million in grants for technical assistance and construction. The remaining investment of $313 million will come from the Vietnamese Government from various funds. Over all, the focus is on investment and development. The country as a whole is still concentrating determinedly on the development of fossil fuels, and plans to continue to rely on them for their power needs for the foreseeable future. For this reason, this overview will take a look at the major players developing gas and thermal power plants.
10,700 Mw (with electricity production of about 70.5 billion kwh) 6,000 Mw
Vietnam National Coal & Mineral Industries Holding Corporation (Vinacomin) Vinacomin is a state owned company founded in 1994 which boasts of more than 40 member companies. The aim of Vinacomin is to ensure the long term and steady development of Vietnam’s coal industry. In addition to the 61 existing coal mines, Vinacomin will develop 28 new mines with total annual capacity of two million tons as well as buying mines in foreign countries to ensure the stable coal supply for power plants. Vinacomin also have a number of power generation projects to which they provide coal. power Generation projects na duong thermal power plant The Na Duong thermal power plant was Vinacomin’s first power generation project and is located in the Loc Binh District. The 100MW plant is built near the Na Duong lignite coal mine that has been active for the last 40 years. Operational in 2004, the Na Duong Power Plant utilizes circulating fluidized bed technology, which consists of the following main systems: • Two units including boilers, turbines, generators and auxiliary equipment,
• Storage and preparation plants for raw water and cooling water supply plants, • Storage, preparation and supply systems for coal, fuel oil and limestone, • Waste water treatment plant, • One common stack for both units, • Ash storage and handling system, Required auxiliary systems, such as compressor station and fire fitting system, The coal is sourced from the nearby mine has the capacity to supply the projected power plant for 40 years. The EPC’s for the project were the Consortium of Marubeni Corporation and LILAMA. The associated substations and transmission lines for connection to Na Duong Power Station were carried out by EVN. cao ngan thermal power plant The Cao Ngan plant is a 100MW thermal power station on the Cau River in Thai Nguyen province. Operational since 2006, the plant is on the site of the older power station, the Thai Nguyen plant. The Cao Ngan plant has two 50 MW units using circulating fluidized bed boiler technology. The boiler was supplied by Alstom and the generators by Harbin. Harbin was also one of the EPC’s for the project, alongside Lilama, Vinaincom, and PECC1. The project was funded by the China Export-Import Bank, who provided a $85.5m soft loan for the $123m project. Anthracite is the main fuel and is supplied from the Khanh Hoa and Nui Hong mines. Limestone for the power plant is supplied from local quarries such as Dong Bay, Ma Trong and KhanhHoa, some 6km away from the project site. cam pha thermal power plant i & 2 In September 2011 the Harbin Electric Company Limited (Harbin) handed over these two thermal power plants to Vinacomin. Operational from 2006, Harbin acted as the general contractor. Cam Pha 1 and Cam Pha 2 use circulating fluidized bed boiler technology, consuming low-quality coal 6B. Total capacity of both plants reaches 680 MW with a total investment of 10,635 billion VND. Foster Wheeler were awarded the design contracts.
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vietnam overview So far these two plants have contributed more than 4 billion kWh of power to the national grid, equaling to more than 90% of design capacity. Contracts for the third and fourth units at Cam Pha have been awarded. Foster Wheeler were chosen by Harbin to design two 150 MWe class CFB steam generators. The two boilers will be designed to burn waste anthracite and slurry. son dong thermal power plant Son Dong power station is a 220MW coalfired thermal power plant built in the Bac Giang province. The project aimed to add 1.2 billion kWh of electricity every year to the national grid by 2008, though the project currently produces only 56% of this at 737 million kWh of electricity. Vinacomin has invested almost VND3.3 trillion in developing the facility. The Son Dong Power Plant uses coal from Dong Ry and Tan Dan mines, which is of a low quality.The plant is the subject of a long running dispute between Vinacomin and the electricity buyer, EVN. Vinacomin has not reached any agreement with EVN about the price of electricity Son Dong will sell. Vinacomin has recently sent a document to the Ministry of Industry and Trade, asking the ministry to help settle the problem. UpcoMinG projects Vinacomin have a number of upcoming coal projects: Quynh Lap 1:This is a Government development project utilizing local equipment suppliers. The plant
will have a 1200 MW capacity and is located in the central Nghe An province. The project is instructing the use of domestic engineers and equipment. Vinh Tan 1: This project will be co-owned by China Southern Power Grid, China Power International and Vinacomin. The Vinh Tan 1 scheme will startin 2014, and is part of a major power complex, one of many proposed for Vietnam. Mao Khe: The EPC contractor for this 200MW project was awarded to Guangdong Thermal Power Construction Corporation. Foster Wheeler Boiler awarded CFB boiler supply, and the first turbine recently become operational. Hai Phong 3: This project will have two units with a 600MW capacity. There are already two other stations up and running on this site, HaiPhong 1&2, which are operated by EVN. Dongfang was the lead contractor and equipment supplier. petroVietnam PetroVietnam is a state owned oil and gas conglomerate, which focuses on gathering, transporting, storing, processing, and distributing gas products in Vietnam. PetroVietnam is the country’s largest oil producer and second largest power producer. PetroVietnam has a number of oil and gas refineries as well as storage units, is heavily involved with oversees oil and gas exploration, most recently with Kazakhstan and Venezuela. PetroVietnam is a powerful economic group, but has recently been forced to re-evaluate its priorities. The establishment of too many third grade subsidiaries has weakened the economic strength of
the company. As a consequence of this ineffective investment in its non-core businesses, the Prime Minister Nguyen Tan Dung instructed the company to restructure, pulling out of all except the necessary business ventures by 2015. PetroVietnam have been instructed to focus on oil, gas, petrochemical activities. PetroVietnam will also continue to expand their power generating capacity utilizing coal, oil and gas, with a number of power projects in development exploiting all three fuels. Gas and coMBined cycLe power stations nhontrach 1 & 2 The Nhon Trach power plant is located in the developed industrial zone in Dong Nai, and has two gas fired units. The first, Nhon Trach 1, has a capacity of 450MW with total electricity output at 2.5 billion KwH per year. The plant has two gas turbines and steam turbines with a total investment of VND 6,585 billion. Nhon Trach 1 officially connected to the national grid in April 2009. PetroVietnam decided to expand the power station, and sought out strategic investors to provide technical and financial support to the company to the plant. A total investment of $700 USD was procured. Nhon Trach 2 became operational in October 2011, and is worth VND4.5 trillion. The plant had a construction period of only 28.5 months and has a capacity of 760MW, equivalent to 4 billion kWh per year. The EPC for the Nhon Trach 2 project was LILAMA with Siemens as the turnkey equipment supplier. Siemens supplied two SGT5-4000F gas turbines, two heat-recovery steam generators, an SST55000 steam turbine, three SGen-1000A air-cooled generators, and instrumentation and controls. Siemens also assumed responsibility for maintenance. With an efficiency of over 57%, Nhon Trach 2 is an impressive performer. Thanks to Siemens burner technology, the plant’s nitrogen oxide emissions are very low at less than 15 ppm.The plant is fuelled by natural gas processed at the offshore Cuu Long and Nam Con Son oil and gas fields. ca Mau The Cau Mau power plants are located in the Ca Mau Gas-Power-Fertilizer Complex. This complex comprises of a gas pipeline, urea plant, and the two thermal power plants. The Ca Mau project is one of the largest power projects in Vietnam. The two thermal gas-fuelled power plants have a total capacity of 1,500 MW. Both plants were put into operation in 2008. The plants are combined cycle, running primarily on gas. The stand-by fuel is diesel oil, which are stored in two 5,000m3/tanks. The EPC for the power plants was again local contractor LILAMA, with the main equipment supplied by Siemens. The Ca Mau power plants utilize V94.3A gas turbines, which have a nominal rating of 260 MW (ISO Standard).Ca Mau 1 & 2 are almost identical, both with a capacity of 750 MW. The plant’s configuration is multi–structure, including two gas turbine generators, two heat recovery steam generators (HRSG), one condensing steam turbines generator and accompanying power generators. The plants are also has a burner with lowNOx generation which minimizes the CO.
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price of 62 ‐ 65 USD/ton, the price for coal price for the Long Phu 1 power plant will be about 91 ‐ 110 USD/ton. The coal will be bituminous or sub‐ bituminous with a heat value of 5500‐ 6100kcal/kg. The plant will operate for a maximum of 6,500 hours per year, and will utilize advanced combustion technology (low Nox). The plant will also have a cooling water supply system, exploiting both the fresh and brackish water from the Hau River.The first 600 MW unit is scheduled to be operational in May 2015, with the second following in September 2015.
coaL Fired projects PetroVietnam is developing a number of coal fired power plants throughout Vietnam. All plants will have a 1200 MW capacity, with 2 units of 600 MW and 25 year lifespan. They will all be financed by a number of sources, such as PVN, the national budget, ECAs, and commercial loans, and will all have an Equity/Debt ratio of 30/70. All projects will be owned by PV Power, a PetroVietnam subsidiary, with a variable maximum foreign equity ownership. The projects have secured Governmental guarantees and widespread support from local authorities. Additionally, the Ministry of Finance will guarantee for overseas financing loans for most of these projects. thai Binh 2 coal fired thermal power plant This project is located in the Thai Binh province. The project aims to alleviate power shortages in Northern Vietnam, contributing to a stable and sustainable national network. The plant will have a maximum foreign equity ownership of 71%, and will require a US$ 1,668 million capital investment. Daelim Industrial of Korea is the lead EPC. Babcock & Wilcox Beijing Co. Ltd. will supply the two sub critical boilers, and Toshiba is supplying the steam turbine and generator. Vinacomin agreed to provide dust coal No.6B from the Quang Ninh area as the primary fuel. The coal will be transported to the plant by the sea, and a separate coal unloading station for the plant will be constructed. no 1
economic indicators power tariff at plant bus‐bar (cent/kwh)
Value 5.718
2 3
Financial discount factor Financial internal rate of return (Firr)
9.20% 12.00%
4
net present value ‐ npV (million Usd)
164.62
5
B/c
1.065
6
payback period with discount rate
15
Vung ang 1 coal-Fired power plant This project will be located at the Vung Ang
Economic Zone. It will be the first coal-fuelled power plant to be built in the northern central region. The project will need a US$ 1.595 billion investment capital, with a 14 year payback period. The Average Electricity Price of the Project will be US$5.88/ MWh. The maximum foreign equity ownership will be 49% of the project. The type of coal to be used is Anthracite ‐ Dust Coal No. 5 (HG 100). The coal prices are under negotiation between PVN and Vinacomin. The total coal consumption for the plant will be around 3,000,000 tons/year and will use around 14,400 tons/ year of heavy fuel oil. The first unit began operations in July 2012, and the second unit will be up and running in January 2013. The EPC Contractor is LILAMA. Babcock & Wilcox Beijing Co. Ltd were awarded the boiler contract. Contractors have confidently claimed that the project is now in its final stage and will be completed by the end of this year. Nguyen Duy Loi, deputy head of LILAMA’s project management board, the project’s main contractor, said as many as 100,000 tonnes of equipment have been installed of which 46,000 tonnes were produced locally. Quang trach 1 coal Fired power plant This plant is located in the Quang Binh province. The total investment capital will be US$ 1.668 billion. The project has a payback period of 13 years, with a maximum foreign equity ownership of up to 49%. The EPC is LILAMA, and the plant will use locally-made designs and equipment on a trial basis. The fuel will be imported bitumen coal from Australia and Indonesia. The plant will consume around 3,166,000 tons/year in coal and around 4,218 tons/year in diesel oil. The first unit is expected to begin operating in June 2015, with the second scheduled to be delivered in December 2015. Long phu 1 coal Fired power plant The Long Phu 1 thermal power plant will be located in the Long Phu Power Complex. The plant has a maximum foreign equity ownership of 71%, and will need an investment of US$ 1.595 billion with a payback period of 18 years.The locale of project is ideal for the coal transportation, utilizing the bank of Hau River. There is huge infrastructure work required for the whole Long Phu complex including an intermediate port. The coal used for the plant will be imported from Australia or Indonesia. With an Indonesian coal
song Hau 1 coal Fired power plant The Song Hau 1 Thermal Power Plant Project will be located in the Hau Giang province. It will be the country’s first supercritical power plant. The project is part of the Song Hau Power Complex, a 5,200MW power center and the largest of its kind in Vietnam. The plant will require an investment of US$ 1,812 million with a payback period of 20 years. The project will require a maximum foreign equity ownership of 71%. The plant will be operational of 6500 hours per year. The fuel will be imported bituminous or sub‐ bituminous coal from Australia or Indonesia with a heat value of 5,642‐5,932kcal/kg. The plant will take brackish and fresh water from the Hau River for the cooling water system. The water will be pretreated, desalinated, and demineralized for boiler feed water.The FGD system will use limestone and the plant will use low NOx equipment. The first unit is due for commercial operation in 2015, with the second becoming operational in 2016. There will be further projects on this site with Song Hau 2 and 3 currently being planned. Each new plant will be 2000MW each, and Power Engineering Consulting Joint Stock Company 2 (PECC2) and Toyo Inc have been selected respectively for drafting the project and consultancy. eLectricity oF VietnaM (eVn) EVN are the state owned utility responsible for the production, transmission, distribution and trading of electricity, as well as investment management in power projects. EVN are responsible for the import and export of fuel, raw materials, supplies and equipment to the electricity industry. There have been seismic shifts at corporate level for EVN to hopefully accelerate the workload. Deputy Minister of Industry and Trade, Hoang Quoc Vuong, was recently appointed by Prime Minister Nguyen Tan Dung as chairman of the Electricity Group of Vietnam. Former EVN chairman, Dao Van Hung, was removed from the post on February 1, and assigned to take a new task at the Ministry of Industry and Trade. EVN have the largest generation capacity in Vietnam. Most of EVN’s plants are gas or hydropowered, with EVN seeking to expand their generation capacity in the coal sector. EVN has to ensure a commercial electricity growth rate at 13%/ year, and will do so by adding 11,600 MW to the national grid, putting into operation 42 turbines in 20 electricity projects across hydro and thermal power. To meet these targets, EVN has to secure a total capital of VND501.47 trillion. According to Dinh Quang Tri, vice director of EVN, in order to have this amount of capital, the government has asked EVN to boost cooperation power insider september/october 2012 15
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MPS _P
vietnam overview
with international organizations as well as domestic banks. EVN can also actively seek international loans in the forms of seller credit or buyer credit. By the beginning of 2012, EVN had borrowed VND315.2 trillion with VND186.3 trillion left to secure. They are currently seeking this investment from a number of sources: Vietnam Joint Stock Commercial Bank for Industry and Trade is seeking the State Bank of Vietnam’s approval for giving VND6.2 trillion loan to EVN. The agreement is expected to be signed imminently. EVN will also borrow VND 4.2 trillion from the work with Joint Stock Commercial Bank for Foreign Trade of Vietnam its DuyenHai Thermo-power Centre project. The Bank for Investment and Development of Vietnam said that it will provide a maximum loan of VND3 trillion for NPT to implement nine urgent power projects. NPT is preparing to sign a loan agreement worth VND200 billion with Vietnam Bank for Agriculture and Rural Development for the 220kV VungAng-Ha Tinh power transmission line. EVN has also proposed the bank for an additional loan of VND2.45 trillion. As well as sourcing funds for planned projects, EVN has a number of projects currently in development exploiting gas and coal.
million contract to the build the second unit. Daelim plans to deliver the 330MW unit by October 2015, aftera 36-month construction period. The Asian Development Bank (ADB) is providing a US$200 million loan for the project. Plans for O-Mon 3, 4, and 5 are also in the pipeline. All will be combined cycle power plants, and will each have a capacity of between 700720MW. Construction is expected to start between 2012 and 2015.
o-Mon 1&2 thermal power plant Can Tho Thermal Power Co Ltd are a subsidiary of EVN, and are planning to build an additional unit to the O-Mon coal fired plant in the Mekong River Delta. The existing 660MW O-Mon 1 power plant went on stream in 2008. Mitsubishi Heavy Industries received a full turnkey EPC contract, and manufacturing and installing major power generation equipment, including a boiler and steam turbine. O Mon 1 is part of O Mon thermal power complex worth $2 billion with a total design capacity of 3,600MW, including a proposed four gas-fired plants in Can Tho that would save around 600,000 tonnes of carbon dioxide emissions a year compared to coal-based alternatives. A consortium of Japan’s Sojitz and South Korea’s Daelim Industrial has been awarded the US$345
Vinh tan power center Located in the south-central coastal province of Binh Thuan, Vinh Tan Power Center consists of four thermo-power plants with total output of 5,600 MW. Vinh Tan 1 will be built by Vinacomin, China Southern Power and China Power International. Work on the plant is set to start in 2014. Work on Vinh Tan 2 started in August 2010. The plant will have two turbines with total installed output of 1,244MW, costing around VND23.48 trillion. The first turbine of is scheduled to be operational late next year while the second turbine will be put into service in 2014. One Energy, a joint venture between the CLP Group and Mitsubishi, and EVN are responsible for ownership of Vinh Tan 2. Aurecon is providing project management, Shanghai Electric are the
duyen Hai thermo-power center The Duyen Hai Thermo-power Center in the Tra Vinh Province was invested in by EVN and Malaysiabased Janakuasa Sdn Bhd, and consists of four coalfired thermal power plants with a total designed capacity of 4,200 MW. The total investment cost is around US$8 billion. Power Engineering Consulting awarded the EPC contract, with plans to connect the first power plant to the grid in late 2015. EVN is also under preparation to start work on a seaport for the power center to support the plant. The seaport would be able to handle 30,000-DWT ships and will receive 12 million tons of coal and oil. In June 2012 EVN signed an EPC contract worth some US$180 million for developing this seaport.The project is scheduled for completion and operation in the third quarter of 2014.
chosen EPC, and Foster Wheeler was selected for supply of the boiler. Alstom is installing the SWFGD system. Vinh Tan 2 will house two 622 MW turbines and consume about 3 million tonnes of coal per year. When fully operational in June 2014, the plant is expected to produce 7.2 billion kWh annually. 85% of the project’s total investment was provided by a preferential loan from the China ImportExport Bank and the Chinese Government’s official development assistance capital. The project’s remaining capital was provided by the EVN. The other factories of the power center are the Vinh Tan 3 and 4 under the format of build-operatetransfer (BOT). It is expected that Vinh Tan 3 will be developed by One Energy, with a plan to be operational by 2015 with two 1000MW turbines. The Vinh Tan 4 scheme will be kicked off in 2014, but there is currently no information on the investors and financers. Once all plants are fully operational, the total coal consumption is expected to be approximately 8.8 million tons of coal a year, plus 50,000 tons of fuel oil. The Deputy Prime Minister asked Vietnam Coal and Mineral Industries Group to initialize an agreement with EVN to ensure coal supply for this power center. The Vinh Tan Power Centre will also include the development of the largest open sea port in Vietnam to accommodate 150,000 dead weight tonnage coal ships. Hai phong 1 Hai Phong Thermal Power Joint Stock Company is a subsidiary of EVN, and owns the Hai Phong projects. The Hai Phong project consists of two 600MW coal fired thermal power plants. Each power plant will consist of two generators, with two generators in Hai Phong 1 went online in 2011, contributing an estimated capacity of 1.2 billion kWh. Hai Phong 2 thermal power plant will be operational in April 2013, with the fourth generator coming online in September 2013. Once finished, the two plants will provide 7.2 billion kWh of electricity per year for the national grid. Both power plants will use coal from Hon Gai and Cam Pha ore with a coal consumption of 3.5 million tonnes a year. In order to minimize environmental impact, a highly efficient boiler for anthracite coal has been adopted, as well as a desulfurization device. The EPC contract for the Hai Phong 1 project was awarded to Dongfang Electric. The EPC contract for the second phase of the project has been awarded to a joint venture between Dongfang Electric Corp and Marubeni Corp. This is one of the first times a Chinese and Japanese EPC have worked together in a third country. Mong duong 1&2 Mong Duong power station is a coal-fired, thermalpower electricity generation project with an ultimate generation capacity of 2,200 MW. The project comprises of two 1,000 MW coal-fired thermal power plants, Mong Duong Power Plant 1 and Mong Duong Power Plant 2. Each will comprise of two 500 MW generating units and associated supporting infrastructure. Mong Duong 1 was financed through EVN by a loan from the Asian Development Bank’s ordinary capital resources,and became operational in 2011. Mong Duong 1 uses CFB technology
16 september/october 2012 power insider
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MPS _Poster A1（H841mm×W594mm）
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vietnam overview to accommodate the high sulfur content of the fuel. Both phases will be equipped with an FGD, and cooling water for both phases will be taken from Luong Gac channel. Mong Duong 2 is being financed by AES-VCM Mong Duong Power Company Limited under a build-own-transfer (BOT) scheme. AES-VCM Mong Duong Power Company Limited is a joint venture formed by AES Corporation, Posco Power, and China Investment Corporation, with a total investment of $1.3 billion USD. Mong Duong 2 will sell electricity to EVN under the terms of a 25-year power purchase agreement. AES also signed a 25-year agreement to be supplied with coal from Vinacomin. It is the country’s largest private sector power project and AES is the first independent power producer to reach financial close in Vietnam since 2003. After 25 years of operation, the Mong Duong 2 Power Project will be handed over to the Vietnamese Government per the BOT Contract. For the 1,200 MW Mong Duong 2, pulverized coal technology will be used in two 600 MW boilers. Construction on the Mong Duong 2 Power Project began in August 2011 and is now 40% complete. Upon completion, Mong Duong 2 will provide power for an additional 2.25 million Vietnamese households. The Mong Duong 2 Power Project is forecasted to begin commercial operation during the second half of 2015. The project’s EPC contractors include Doosan Heavy Industries and its subsidiaries. The Mong Duong 2’s two power boilers, supplied by Doosan Vina, will be 100% “Made in Vietnam”, by Vietnamese engineers and technicians. Being the first domestic boilers to be produced in Vietnam it is historically significant. This milestone lays the foundation for Vietnam’s domestic power development and marks the successful localization of the industry in the country. But the questions remain, will this model be a successful mandate for the government to encourage domestic growth, the theory is valid, but in reality technology from overseas will be critical to meet targets. nghi son 1 With an estimated investment of VND22 billion, the 600MW Nghi Son 1 power project will be completed in 2014 with annual output of 3.6 billion kWh. The coal-fired power plant will comprise of
two 300 MW units and will be built in the Nghi Son economic zone. The EPC contract was awarded to the Marubeni Corporation, and is the largest plant Marubeni has constructed in Vietnam. The contract is worth approximately USD 990million, which is supported by Japanese ODA Loan. Marubeni will procure steam turbines and generators from Fuji Electric Systems and boilers from Foster Wheeler. The plant will be equipped with highly efficient anthracite coal-fired boilers and flue gas desulfurization equipment. This is Marubeni’s tenth power project in Vietnam, and the total power generation capacity of Marubeni’s supplied facilities in Vietnam exceeds 3,400MW, representing about 20% of Vietnam’s total power generation capacity. thang Long thermo-power joint stock co. Thang Long Thermo-Power Joint stock Co. is a power generation company and a subsidiary of Thang Long Cement Joint Stock Company. The company has invested US$ 865.5 million in the Thang Long Power Plant currently in development in the Quang Ninh province. The Thang Long Power Plant will have a capacity of 1200MW consisting of two 300MW boilers. The power plant will supply about 3.675 billion KWh per year, and the EPC has been awarded to Chinese power producer Wuhan Kaidi Electric Power. Thang Long will be one of the most modern thermo power plants in Vietnam, using the CFB boilers, designed and manufactured by Alstom. Construction work on the two power generating units is expected to be completed by 2015. ManUFactUrinG in VietnaM The Vietnamese government has recently been encouraging the development of the components manufacturing market in Vietnam itself, so as to lessen the country’s reliance on foreign imports and investments. This overview of projects in Vietnam demonstrates that reliance on overseas companies. Manufacturers from China, Japan, France, Germany, Korea and the USA are winning power plant development contracts, and the now government wants to see more ‘home-grown’ technology. This is partly because of a desire to strengthen
the domestic economy, but also in reaction to the poor quality of components and servicing received from foreign companies. China in particular has a monopoly of contracts, having taken part in 20 thermal power projects in Vietnam. This is largely because they can afford to undercut other company’s prices, but it would appear that in component manufacturing, you get what you pay for: “Our surveys show that the weakness of [Chinese] EPC contractors has caused problems not only in the execution of these projects, but also their operations later on. Since the technology used and criteria applied are not advanced, there are often technical errors in the projects’ operation,” Vietnam Energy Association chairman Tran Viet Ngai said. The Vietnamese government aims to encourage domestic manufacturing of power equipment by selecting three thermal power plants to use locallymanufactured power equipment. Those projects are Song Hau 1 in southern Hau Giang province, Quang Trach 1 in central Quang Binh province, and Quynh Lap 1 in central Nghe An province. To implement the piloting plan, the Ministry of Industry and Trade will map out a mechanism for piloting production. Dao Phan Long, deputy president of Vietnam Association of Mechanical Industry, said the pilot plan could encourage domestic and foreign manufacturers to increase their investment in Vietnam. South Korea’s Doosan Group will be the first one benefit from this plan. The Doosan Group is a global multinational focusing on infrastructure developments worldwide. They own the Dooson Vina High Tech Industrial Complex in the Dung Quat Economic Zone. Doosan Vina’s products include boilers for thermal power plants, heat recovery steam generators and pressure parts that increase the efficiency of a typical power plant by over 30%. The power developers of Vietnam have thoroughly thrown their weight behind fossil fuels. The focus for the Vietnamese power program is on building plants quickly and producing electricity in bulk, using coal and gas rather than aiming to develop more sustainable alternatives. What this overview has shown is just how ambitious this program for development is, with a vast number of projects in the pipeline for the three major power producers. Whilst the completion of all these plants will meet Vietnam’s short term need for a stable grid and abundant electricity, Vietnam will need to rely on imports of fuels, components and technical know-how to help support the grid. This will expose the nation to huge fuel costs and increased geo-political risks. Nevertheless, thermal projects do yield high returns for companies seeking profitable investments. As we could see with EVN’s financing aims, the sheer number of projects means that funding for many projects is still required, and still presents a stumbling block for an ambitious work load. The Communist Government are also beginning to open the market in Vietnam, with a limited number of IPP’s securing projects and a more open approach to cultivating financial relationships with overseas companies. Combined with the governments support and incentives, growth is the only outcome for this market.
18 september/october 2012 power insider
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Babcock Power Works in Bangkok ...and Beyond.
A presence in Thailand and a presence in Asia— for the long haul. That’s Babcock Power.
Fabricated in Thailand for 15 years and counting Sold first HRSG in Thailand in 1997 Built 98 HRSGs in Thailand for export
Babcock Power is a vital, reliable source of income in Bangkok, providing jobs that last and a partnership that serves the people who live here. As we expand in Asia, we hold up Thailand as a success story—and proudly share our team’s accomplishments:
PI_SepOct_Vietnam_Overview.indd 19
Supplied 20 HRSGs for Thailand’s SPP and IPP electrical markets Subcontracted 7,534,975,000.00 baht of work in Thailand
24/10/2012 21:51
third party testing
Protecting Your investment The Value of The Third ParTy TesT agency
introduction Power plant ownership represents an investment that can run from millions to billions of dollars. Prudent stewardship of this investment requires an accurate knowledge of initial and current thermal performance of the plant, because this is a significant driver of the success of a project and economic performance. Acceptance tests are conducted to prove guarantees are met and are critical to avoiding significant contract performance shortfalls and long-term negative financial impact. Results from routine thermal performance testing capture system inefficiencies and provide the power plant owners and operators with the appropriate information to address economic improvements. This article explains the benefits of conducting accurate acceptance and routine performance tests, identifies specific test codes as the basis for initial acceptance and routine operations, delineates the advantages of working with an independent testing agency, and identifies attributes of a professional independent testing agency.
performance testing overview When a plant is in the final stages of being completed and prior to commercial acceptance, performance testing is conducted in order to verify the guaranteed performance of the individual components as well as the overall power plant. This acceptance testing provides
validated results to lenders, developers, EPC contractors, and manufacturers. Performance testing is also conducted before and after major maintenance. Often, this testing is conducted to verify guarantees associated with an upgrade provided by a manufacturer or third party maintenance provider. Special care must be taken to design an acceptance test to effectively validate changes in performance. Also, just like an aging automobile, an operating power plant will degrade with time. This degradation causes the plant to consume more fuel than necessary and emit more unwanted emissions such as carbon dioxide (CO2). Degradation also frequently reduces the plant’s maximum capacity. Routine performance tests will help identify underperforming equipment, pinpoint lost efficiency or power, identify weaknesses in the power plant system and provide specific data to help focus on where economic improvements can be made to restore and increase efficiency, power, and/or reduce emissions. Other benefits may include better operational flexibility, easier dispatching methods/ response time, decreased startup times and/ or fuel consumption, and improved ramp rates. Performance testing will allow owners to target maintenance and quantify potential economic gains. They also help strengthen and focus the facility team to recapture or prevent losses in profits.
industry standards Performance testing using national and internationally accepted test methodologies represents the best way to understand the performance of the asset and its impact on the underlying economic performance. These industry standards and test codes are maintained by the International Standards Organization (ISO), American Society of Mechanical Engineers (ASME), French Standards Organization (AF), European Standards Organization (EN), British Standards Institution (BS), and German Standards Organization (DIN) to name just a few. Organizations such as these have widely accepted protocols and industry standards used around the world by equipment owners, equipment suppliers, and engineering personnel who conduct and analyze tests. The documents maintained by these organizations provide standard directions and rules for conducting and reporting tests of specific materials such as fuels, equipment, analytical techniques, measurements, and process functions related to power plants.
these standards can be used for the following: a. Determination if equipment meets design or expected performance criteria; b. Incorporation by reference into contracts to serve as a means to determine fulfillment of guarantees; c. Evaluation of equipment performance or operation following modification, change in operating conditions, or any suspected change in performance for which such investigation is required; d. Studies to help determine the value of possible upgrades or modifications to equipment or overall plant; e. Benchmarking of equipment performance, sometimes to help determine necessity for specific preventative maintenance or possible upgrade or modification; f. Validation of results from online or continuous performance monitoring systems, which are usually less accurate than results conducted in accordance with internationally accepted test codes and standards.
test guidelines The following table identifies international and industry standards which can be used as guidelines for plant and component level acceptance and routine testing. 20 September/october 2012 power insider
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component to be tested
plant
gas turbines
steam turbines
steam generator/boilers
condensers
cooling towers
feedwater heaters
pumps
code / standard
title / description
how is accurate performance testing achieved?
asme ptc 46
performance test code on overall plant performance
asme ptc 47
integrated gasification combined cycle power generation plants
An accurate performance test requires the following:
iso 2314
gas turbines -- acceptance test (amendment 1 combined cycle)
asme ptc 22
performance test code on gas turbines
iso 2314
gas turbines - acceptance test
din 4341
gas turbines; acceptance tests
bs 3135
specification for gas turbine acceptance test
asme ptc 6
steam turbines
asme ptc 6.2
steam turbines in combined cycles
din 1943
thermal acceptance tests of steam turbines
bn en 60953
rules for steam turbine thermal acceptance tests
asme ptc 4
fired steam generators
asme ptc 4.4
gas turbine heat recovery steam generators
din 1942
acceptance testing of steam generators
bs 845
methods for assessing thermal performance of boilers for steam, hot water and high temperature heat transfer fluids
water and high temperature heat transfer fluids
comprehensive procedure
asme ptc 12.2
performance test code on steam surface condensers
asme ptc 30.1
air-cooled steam condensers
cti -atc-107
test code for air-cooled condensers
asme-ptc 23
atmospheric water cooling equipment
iso/dis 16345
water cooling towers -testing and rating thermal performance
cti-atc-105
acceptance test code for water cooling towers
cti-atc-105s
acceptance test code for closed circuit cooling towers
din 1947
thermal performance acceptance testing of water cooling towers
vdma 24419
thermal acceptance tests on standardized wet cooling towers
af-nor X10-251
water cooling towers. glossary of term
af-nor X10-252
specification for water cooling towers. methods of test and acceptance testing
af-nor X10-253
specification for water cooling towers. thermal and functional design of cooling towers. factory prefabricated cooling towers
bs 4485-1
water cooling towers. glossary of terms
bs 4485-2
specification for water cooling towers. methods of test and acceptance testing
bs 4485-3
specification for water cooling towers. thermal and functional design of cooling towers. factory prefabricated cooling towers
asme ptc 12.1
closed feedwater heaters
hei 2622
standards for closed feedwater heaters
asme ptc 8.2
centrifugal pumps
iso -9906
rotodynamic pumps -- hydraulic performance acceptance tests
bs 5316-1
specification for acceptance tests for centrifugal, mixed flow and axial pumps. class c tests
bs 5316-2
specification for acceptance tests for centrifugal, mixed flow and axial pumps. class b tests
hydraulic institute standards
standards for centrifugal, rotary & reciprocating pumps
api – 610 standard
centrifugal pumps for general refinery service
ansi /hi 1.6
centrifugal pump tests
test plan • Typically a performance test plan will identify the details of the test scope, personnel responsibilities, conduct of test, plant operation, instrumentation, data collection, correction curves, pre-test measurement uncertainties, and all calculations.
correction model • Correction models usually consist of calculations (via spreadsheet or other software tool for the performance test data reduction and results analysis including pre-test uncertainty analysis. • Proof of software validation should be provided for the software analysis tools.
uncertainty analysis: • Uncertainty analysis is a measure of the quality of the test or calculation result. • A pre-test uncertainty analysis is used to design a test to meet predefined uncertainty limits. • A post-test uncertainty analysis is performed to verify that uncertainty limits were met, that the desired of test quality was achieved, to validate assumptions made, and determine the impact of any random scatter recorded in the test data.
test instrumentation • Temporary test instrumentation should be supplied with a laboratory calibration that establishes the traceability required by the ASME Performance Test Codes and/or ISO Standards. • Laboratory calibrations should be conducted under controlled conditions with highly specialized measuring and test equipment that is traceable to a national standard organization. • The calibration records list the instrument identification, and include a tabular comparison between the reading from the instrument and a calibration standard across a range of readings using a minimum of 5 calibration points. • Plant instrumentation should only be used for primary measurements if the parties involved with the project can prove that the instruments and all associated signal conditioning meet the accuracy and calibration requirements for the test. This includes controlled calibrations with competent staff and traceable standards as well as elimination of any data filtering or compression on the plant distributed control system (DCS).
professional execution • All applicable plant documentation (drawings, electrical schematics, site plans, equipment design/performance details, major system piping layouts, etc.) should be reviewed as part of test planning to ensure that obstacles to the testing, or other issues, can be identified and rectified early in the process to enable proper test execution. power insider September/october 2012 21
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third party testing
Note: graph above assume standard bases used year-to-year (same instruments, same test point locations, etc). • Testing agency project managers are typically assigned to coordinate with the client, gather technical data about the plant necessary for the project, and work with the client to determine the best approach to conducting the performance test. • A pre-test site visit may be conducted to gather plant information and determine the best access points/requirements for instrumentation, to provide technical guidance, and present project materials. This visit will help the plant to optimize the test schedule as well as discuss plant operator and operational requirements for test activities. • Once the plant is ready for testing, a team of experienced test personnel are mobilized to the site. • Test personnel work with the plant to install temporary test instrumentation and perform
pre-test checks for all instrumentation. • Test personnel conduct testing in accordance with the approved performance test plan. • Test personnel will prepare preliminary data reports and submit these records to all appropriate parties. • Test personnel will remove temporary test instrumentation and demobilize.
test report • The Engineering team will analyze of the collected data and provide a detailed test report of the test results to the appropriate parties. • The report will include a description of activities and equipment, raw test data, derived results, test calculations and correction factors, process operating data, instrument calibration data, post test uncertainty analysis, test results, conclusions, and recommendations. value of accurate performance testing The value of an accurate test of a complete power plant or major component can be estimated in a number of ways. One of these is to evaluate the value of a 1% improvement in the uncertainty of the testing. The value of this is that the plant knows performance to a level 1% greater than previously
recorded. This is not to be confused with a 1% gain in efficiency, since the plant knows it more accurately they have a better value from which to make judgment or take action. The value for various types of plants and fuel supplies based on estimated annual fuel consumption for a 90% available plant can then be calculated. The graph to the left shows the value for one year based on the analysis. An alternative analysis is to look at the range of liquidated damages over a selection of plants and estimate the impact based on the contractually define values. In general, the range of these values are three to six times the annual value shown in the chart to the left – which further confirms the high value of an accurate performance test. independent test agency Owners and developers of a power plant are accountable for the successful execution of projects that cost millions or billions of dollars. To be successful, they must continuously navigate a wide range of anticipated and unanticipated risks to bring projects in on time and within budget. Risks escalate with the level of complexity of the projects and the number of parties involved. When it comes to performance testing, owners, developers and investors should look to an independent third party testing agency to serve as an independent set of eyes. A reputable third party testing agency is autonomous and provides unbiased and honest assessment of the test results. Their demonstrated integrity ensures that all parties can readily accept the results. Highlighted below are the benefits of and what to look for when seeking an independent third party test agency.
22 September/october 2012 power insider
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Every 1% matters. Thermal performance solutions for increased productivity, reliability, and profitability.
Independent. Accurate. Proven results. McHale & Associates is a leader in finding the critical performance differences that lead to peak operation and optimal efficiency. Our professionals are experts in power plant technology and provide proven test results for plant operators, managers, and investors worldwide.
McHale & Associates, Inc. • www.mchale.org • E-mail: sales@mchale.org Phone: 00-1-865-588-2654
PI_SepOct_Thhird_Party_Testing_Rev.indd 23
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third party testing
‘uTilizing a ThirdParTy TesTing agency To ProVide a Performance eValuaTion of a Power PlanT will giVe resulTs ThaT are comPleTely indePendenT and unbiased, and Therefore less likely To be disPuTed.’
avoidance and opportunities for capital and operational savings. For example, third party testing agencies often identify gas turbine tuning issues, boiler tuning issues, steam cycle isolation issues, steam turbine seal issues, heat recovery steam generator gas path bypass issues, cooling system operational and maintenance issues as well as faulty instrumentation readings that have led to inaccurate control settings while planning and executing performance testing programs. • Assist with determining if owners, operators and investor are getting what was promised and what was paid for and offer value by helping to achieve technical and fiscal goals.
what to look for benefits • Provides impartial, conclusive, and unbiased results that minimize uncertainty and post test arguments. • Reduces financial and commercial risk by having an expert with a proven track record responsible for the test program. • Provides a quicker conversion of financing and quicker payment for the contractor and manufacturers. • Assists all parties to the test agree on key technical points to avoid contentious discussion of test execution or the results there of, after testing is completed. • Consistently proven to pay for themselves multiple times over in terms of early identification of plant inefficiencies, risk
• Find an industry expert with direct experience with ASME Performance Test Codes and/ or ISO Standards. A company that is heavily involved with test code and standard committees will have firsthand knowledge of the requirements that will allow them to rapidly resolve technical issues with manufacturers, owners, or lender’s engineers because many of these individuals or their management serve on the same committees. • Extensive knowledge of current test codes and standards also provides expertise to recognize the potential shortfalls in the approved codes and ultimately ensure owners and operators’ commercial interests are properly represented. • Performance testing is their main business, not a side business, so they can thoroughly immerse their efforts on conducting efficient
and accurate tests. • Test personnel should provide operational recommendations prior to testing to tune and/ or optimize component and plant performance for current operating conditions. They should also identify permissible adjustments that will correct malfunctioning controls or instrumentation. This proactive approach helps conduct the most productive test possible. • Testing personnel should be able to work with operations and startup personnel to optimize testing schedules to reduce fuel consumption costs and schedule. • Sufficient resources including highly skilled test personnel and laboratory calibrated temporary test instrumentation to successfully execute the project. summary Whether a power plant is new, being renovated or kept running utilizing older equipment, it is important for owners and operators to know the output and efficiency of the plant. This information is beneficial to a multitude of parties involved with the plant so it is important to have accurate information from which to draw conclusions. Utilizing a third-party testing agency to provide a performance evaluation of a power plant will give results that are completely independent and unbiased, and therefore less likely to be disputed. The easier the results are accepted by everyone involved with the plant that faster adjustments, improvements and/or payments can be made. An optimized and efficient power plant is a common goal that can be achieved through accurate and independent test results.
24 September/october 2012 power insider
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vietnam hydro
dammed vietnam
V
ietnam has a colossal hydropower program. Hydropower potential is concentrated along 10 of the country’s largest river systems, and has an estimated generation capacity of about 17,000 MW, of which nearly 9,200 MW has been developed so far. This accounts for approximately 9% of Vietnam’s electricity generation. Since Vietnam’s independence in 1954, the government has actively promoted the development of hydropower, spurring construction of 1,021 large and small hydropower projects in 36 provinces and cities. Vietnam’s Power Master Plan VII calls for rapid hydropower development over the next five to ten years. Under the plan, hydropower resources will be expanded to 17,400 MW by 2020. Compared to other renewable technologies, hydropower is a mature technology in Vietnam and its return on investment can be high. Grid-connected small hydropower projects are therefore highly bankable. In addition, small hydropower projects are gaining substantial financing from CDM. About 1,050 potential sites for small sized hydropower (ranging from 0.1 to less than 30 MW) have been identified with a total capacity of 4,044.5 MW, equivalent to 16.7 million GWh/year. More than 200 plants have been realized and 800 more are planned. Provinces with strong potential are Son La (95 projects), Kontum (80 projects) and Lao Cai (80 projects). The Dong Nai River Basin, in particular - which originates in the central highlands of the southern portion of the country and runs 586 km (364 miles) across 11 provinces and cities - has a total of 17 hydropower projects under construction with a total designed capacity of 3,000 MW. Public utility EVN are the largest power producer in Vietnam, and equally have the highest hydropower capacity. EVN, through their various subsidiaries, own and operate multiple hydropower plants with a range of capacities. Two of their most recent key projects are: Truong son Hydropower projecT: Truong Son is a $411.57 million medium-sized hydropower and development project located in Northwest Vietnam. Truong Son will enable Vietnam to develop an additional 260MW of electricity generating capacity. Truong Son hydropower project is the first World Bank investment project under IBRD lending conditions to the Government of Vietnam. The World Bank will provide a loan of $330 million payable with a 27 year maturity and a grace period of 6 years. Truong Son hydropower project’s implementation is being undertaken by the Truong Son Hydropower project management board (TSHPMB), a unit under
EVN. Truong Son hydropower project includes the development, construction, and operation of a run of river power plant that would use water from the Ma River and release it into the same basin. The proposed project site is located in the Son La, Than Hoa and Hoa Bin provinces in North-Western Vietnam, with the plant in the territory of Truong Son commune.
son La Hydropower projecT: Son La is Vietnam’s largest hydro power plant. The project officially launched its sixth and last turbine on the 26th September 2012, bringing the plant’s capacity up to 2,400 MW. Having launched each turbine in turn, the plant has already provided 11.4 billion kWh to the national grid, which added about VND1.14 trillion to the State’s budget. Construction of the VND37 trillion power plant began in December 2005. Now fully operational, the plant will be able to supply 10.2 billion kWh of electricity a year. Pham Hong Phuong, deputy director of the project’s management board, said the fact that the project has been finished earlier than expected by up to three years has helped ease the current power shortage nationwide. This also means the project has brought in high investment efficiency. PetroVietnam are also diversifying their generation capacity. Primarily focused on natural gas activities, PetroVietnam have also began an ambitious program of power generation. This program mostly includes thermal applications, but PetroVietnam also have a hydropower plant in development: THe dakdrinH HydroeLecTric power pLanT The Dakdrinh Hydroelectric power Plant Joint Stock Company of Vietnam, a subsidiary of PetroVietnam, have signed a contract with Dongfang Electric Corporation of China worth US$15.5 million. The Chinese company will supply equipment, materials and technical services for the Dakdrinh Hydroelectric power Project. Under the packaged contract, the Dongfang contractor will implement the tender within 30 months. Since starting operations in Vietnam in 2003, the Dongfang Corp. has participated in the hydropower plants of Dak Mi, A Luoi, An Khe-Ka Nak, Ban Ve and Song Ba Ha. With a total investment of VND3,423 billion, the project is high priority. Financing has been arranged from various sources including PVN, the national budget, ECAs, and commercial loans (PVFC, BIDV, Credit Agricole) with an Equity/Debt ratio of 30/70. The life of the project will be 40 years.
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vietnam hydro Once completed and put into full operation in December 2013, the plant with a capacity of 125 MW will provide the national grid with more than 540 million kWh per year. Vietnam are also starting to focus on developing pumped storage plants in order to make hydroelectric more profitable. Over a one-day period, power demand fluctuates significantly between the nighttime off-peak and the daytime peak. Flattening that curve makes generating electricity more economic. Because electrical energy cannot be stored, the energy taken from an electrical power supply grid must always be equal to the energy being delivered by the electrical power plants. If this were not the case, the frequency and voltage of the supply grid would deviate from standard values. Following severe disturbances of the supply/load balance, the supply system could collapse. Pumped storage plants solve this problem by storing electrical energy as potential energy: They pump water to an upper reservoir at times of surplus energy on an electrical supply grid, typically at night. This potential energy is then released through a hydro-electrical generator at times of high demand.
Apart from leveling the load in this way, pumped storage has many advantages. The environmental impact of pumped storage stations is usually Dam under much less than that construction, just of a conventional above the Song hydropower station Reservoir ®Da PTE. LTD. since the required water storage is 50 Bukit Batok St. 23 usually much smaller. The need for a pump#06-08 pump storage:Midview Bldg. priming head usually positions the pump-turbine improves energy regulation and operation below the level of the lower reservoir, often Singapore 659578 of the supply grid underground. The typical design life of a pumped delivers ancillary services to the supply storage station is 80-100 years. 6316 3850 duties, Tel.: grid, such +65as standby and reserve Over the period 2016 to 2030, project black-station start, frequency control, and 3851 development will focus on pumped-storage projects. Fax: +65-6316 flexible reactive loading. Vietnam plans to increase its pumped storage creates environmental benefits such as capacity from 1,800 MW in 2020 to 5,700 MW www.sbs-bearings.com.sg reduced gaseous emissions and has little by 2030. Vietnam is expected to build a pumpedenvironmental impact during its operation. info @ sbs-bearings.com.sg storage hydropower plant with total capacity of allows flexible and rewarding commercial 1,500 MW in the country’s northern mountainous operations across a variety of electrical province of Son La in 2013. Vietnamese Deputy power supply scenarios. Prime Minister Hoang Trung Hai has given an in-principle approval to the construction of the plant. The plant will be the first pumped-storage hydroelectric power station in the country and is expected to be operational in 2018. However, it is not all positive news in the hydropower sector. Hydropower projects, whilst technically renewable energy, are constantly Our partners in Germany shrouded in controversy because of their negative impact on their surroundings. Whilst hydropower ® GLT-GleitLagerTechnik GmbH LHG-GleitlagerKomponenten® GmbH & Co. KG projects boost Vietnam’s economy, they will place Münchener Str. 1a Högerstrasse 38a a high toll on citizens living along the rivers, D-85646 Anzing D-85646 Anzing who face displacement, heightened pollution, and Germany Germany reduced water supplies. The country also-(0)8121-2530-0 prone to droughts, such as Tel: +49 -(0)8121 -2233-0 Tel:is+49 the one thatFax: afflicted country in 2010 and 2011 +49the Fax: +49 -(0)8121 -2233-44 -(0)8121-2530-35 and forced the government to take severe water info @ glt-gleitlagertechnik.de info @ lhg-gleitkomp.de consumption mitigation measures such as rationing www.glt-gleitlagertechnik.de www.lhg-gleitkomp.de power and increasing electricity prices by 15%. There have also been multiple earthquakes in the vicinity of Song Tran 2 hydropower plant, damaging property and putting local residents at risk. After investigation, it was discovered that SBS products are manufactured according to these earthquakes were caused by the hydropower DIN EN ISO 9001:2000 and DIN EN ISO 14001 qualityThe assurance! plants’ reservoir. Song Tran 2 plant is built a mere 3km away from the Tra Bong or Hung Nhuong-Ta Vi fault lines, and on top of a weak layer of the earths crust. In addition to this, a number of plants have been scrapped recently because they were poorly planned, managed or because they failed to obtain stable financing. A total of nine hydro power plants planned for the provincial centre of Thua Thien Hue have been scrapped after experts deemed them unfeasible. Another factor that may negatively affect the hydropower market is that Vietnam routinely competes with its neighbors on the lower Mekong River for water, making its reliance on hydropower a contentious political issue. These reasons considered, once Vietnam reaches its hydropower potential, it plans to diversify its power generation profile, which will reduce hydropower’s share to 16% by 2030.
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vietnam renewable energy
Untapped potential: Renewable eneRgy in Vietnam T
here is a common theme in any analysis of renewable resources in Vietnam: The potential is enormous, but that potential remains largely untapped. Despite having a healthy hydro-power program, Vietnam could exploit such resources as wind energy, bio-fuels, solar energy, geothermal and nuclear energy to increase their energy mix. The vast majority of electricity supply in Vietnam in generated from coal-fired and hydroelectric power plants. In addition, natural gas fired power plants have emerged as a major new source. Reports from the state-owned company Electricity of Vietnam (EVN) indicate that 30 % of its generating capacity comes from natural gas. According to the Vietnam Institute of Energy, in 2010 the electricity generating capacity in Vietnam was made up of hydropower at 9% of the mix, gas at 12%, coal fired plants were producing 35% of the generated capacity and oil was contributing 23%. Vietnam also imported 5% of their electricity from other countries. Finally, all renewable energy sources, from solar to wind to geothermal contributed a mere 2%. This 2% generated by renewable energy sources
is only 5% of the potential renewable capacity. With energy demand expected to increase four times from 2005-2030, there are many reasons to increase the production of renewable power sources. Besides their more positive impact on the environment, indigenous fossil resources are exhausting and oil prices are increasing. This means that Vietnam will have to rely on fuel and electricity imports, which comes with high prices and increased geo-political risk. The Vietnamese government has taken note of these considerations and legislated to encourage growth: The National Power Development Plan 20112020 Power Master Plan VII, which includes considerations up to 2030, gives priority to the development of renewable energy. It sets a target for renewables to make up 4.5% of total electricity production in 2020, and 6% in 2030. This means a total installation of about 13,000 MW between 2011 and 2020. The plan also aims to give most households access to electricity by 2020, of which 600,000 households will be supplied with electricity from renewable power sources.
The Government will also provide financial support for the investigation, research, trial manufacture and establishment of pilot locations; and exempts them from import, production and circulation taxes. The Government has provided various incentives for investors in. These include various electricity tariffs for plants and for consumers selling back to the grid, standard power purchase agreements. Despite these positive steps, there are still a number of hurdles to overcome before renewable energy growth can be observed. These obstacles probably account for why Vietnamese targets are so slender: Current incentives are largely beneficial to small hydropower only; they are not creating the appropriate conditions for planning, implementation or sale of renewable energy in Vietnam. The Vietnamese market for energy savings and energy efficiency (EE) is still in a nascent state, which discourages heavy investment. A considerable portion of the materials required in the energy efficiency and renewable energy sectors in Vietnam need to be imported.
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:
m
Other major obstacles include heavy procedures, lack of finance and price distortions in the power sector. There is potential for change, however, and short term prospects are positive. Many private companies are already exploring market opportunities.This overview of the renewables market will take a look at the companies that are currently contributing to the energy mix with renewables, and identify some of the key new projects being developed. solar There is great potential for the development of a successful solar market in Vietnam. Most of Vietnam is situated in the tropical zone, with up to 5,000 hours of sunshine per year. The average solar energy density ranges between 100 and 175 kcal/cm2/year, and generation of solar heat energy can total up to 1744.5 kWh/m2/year. This is equivalent to 43.9 million tons of oil per year. The most reliable location for solar power is in the central and southern provinces. The two main technologies used in Vietnam are solar PV and solar thermal applications. Clients using the solar PV application include families living on islands and in remote rural and mountainous areas which are out of reach from the electricity grid. Solar thermal collectors are mainly used for domestic water heating by city households. Managers and scientists have proposed a program of development for the solar power industry in Vietnam between 2010-2025. The aim is to build
Vietnam’s solar power industry to lead the region and compete in the global market by 2025. The program has drafted four major projects, including a project on 10,000 solar power houses, a solar power plant, and a project on 10,000 public lighting sources. In addition, there are other projects such as the building of a solar module factory. The Vietnamese Government also launched a program to put 30,000 solar-powered water heaters each with a 180-liter capacity on the market by 2013. This could help save 57 million kWh of electricity and cut greenhouse gas emissions by 23,541 tons every year. Though the government has a number of projects in the pipeline, the majority are small in scale and focused on solar thermal. This is the only investment in solar energy that is considered profitable, as the equipment can be produced domestically. Household scale solar PV power is considered economically negative because of high cost but low generation quality. Solar power for the national grid is less profitable for the same reasons, and additionally requires huge upfront investment costs. These costs are so high because of the lack of energy component manufacturing in Vietnam. At present, Vietnam has to import thousands of solar units and accessories every year. Most PV panels are imported from Japan, Australia, Italy and the UK. First Solar, an American solar panel manufacturing company, were due to open a $300 million PV plant this year in HCM City’s Dong Nam Industrial Park. The plant was set to produce panels with a capacity of 250 MW a year, primarily for sale in overseas markets. However, in July 2012, despite the plant being built, First Solar decided to sell the facility and pull out of Vietnam, blaming an over supplied market. Sales agent Cushman & Wakefield is seeking buyers for the 113,000 square meter manufacturing facility.The plant is unlikely to sell within twelve months, because of the huge discrepancy between investment cost and selling price. Investment in large scales power producing solar plants is similarly minimal. The largest solar power plant currently in operation isn’t even connected to the grid. The solar power plant at the Saigon High-Tech Park is run and operated by technology giant Intel. Costing approximately US$1.1 million, the new solar power station is expected to supply about 30% of Intel’s total electricity consumption in a year for the next 20 consecutive years.This new solar power station, can directly provide the company with around 321,000KWh of electricity per year, equivalent to electricity consumed by 500 households in Vietnam. There are now plans to build a solar power plant in Vietnam, however. The US ACO Investment Group hopes to build Vietnam’s first solar plant in central Binh Thuan province. As revealed by the Binh Thuan People’s Committee, the project will be a 50 MW solar power farm. An ACO representative said the firm was working with the Ministry of Industry and Trade to add this project to the national electricity master plan: “We are serious about this project and we
are trying to complete all procedures to push it ahead as soon as possible. A feasibility study is being undertaken,” said a source from ACO Investment Group. “Vietnam has untapped potential for renewable energy, especially solar power. So, we want to be the first investor to develop a solar power project here,” the source added. Binh Thuan and its neighboring Ninh Thuan province are said to have the biggest potential for solar energy, prompting many domestic and foreign investors to express interest in investing into solar power in the province. Despite this, investment in large-scale solar projects are few and far between, with the majority of work on solar power still in the R&D phase. The major organizations active in implementing solar energy systems are the Solar Laboratory of Vietnam Science Institute (Solar lab) based in Ho Chi Minh City, the Institute of Energy in Hanoi and the Renewable Energy Centre of the Hanoi University of Technology. wind Wind energy has been exploited in Vietnam for grain grinding and pumping water for many years. The application in electricity generation, however, is new. Wind power projects in Vietnam include hybrid 2- 30kW wind turbines – diesel generators, family-scale 150-200kW wind turbines installed mainly in off-grid areas, and the new industrial scale wind power stations. Research has shown that Vietnam has great potential for the development of large wind projects. The World Bank’s Wind Resource Atlas confirmed that Vietnam has a theoretical wind energy capacity of 513,360 MW. no.
site
1.1
Mong Cai, Quangninh Van ly, nam dinh
5.80 6.88
6.39
sam son, ThanhHoa Kyanh, Ha Tinh
5.82
6.61
6.48
7.02
Quangninh, QuangBinh Giolinh, Quang Tri phuong Mai, Binhdinh Tu Bong, KhanhHoa phuoc Minh, ninhThuan da lat, lam dong Tuy phong, BinhThuan duyenHai, TraVinh
6.73
7.03
6.53
6.52
7.30
6.56
5.14
6.81
7.22
8.03
6.88 6.89
7.57 7.79
6.47
7.24
1.2 1.3 1.4 2.1 2.2 2.3 2.4 3.1 3.2 3.3 3.4
annual average wind speed at 65 m above ground (m/s) eVn [1] wB 7.35
This differs greatly to EVN’s conclusion of 1,785MW (see table, left). These differences are largely down to a lack of observable data. power insider september/october 2012 31
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vietnam renewable energy
However, both reports agree that the greatest opportunities lie in the central and south central coast, with locations such as Ninh Thuan and Binh Thuan touted as having the most potential. The local government of Binh Thuan has been developing a “Master plan for wind power development in the period 2009-2015 oriented toward 2020”. This province is also the first to establish a wind energy association in 2009. Meanwhile, Ninh Thuan’s master plan is being prepared (as of 2010). According to the Power Master Plan VII, the government targets for wind power generation is to raise the output to 1000MW by 2020 and 6,200 MW by 2030. This modest target reflects the multiple obstacles that restrict large scale development. Despite a high theoretical capacity, potential for profit is marginal. Investment costs are high and the sale price for the electricity is too low, meaning that few companies will see a fast return on their investment. The government has set a wind electricity price of 1,614 VNĐ/ kWh which includes a government subsidy of 207 VNĐ/ kWh.Also, because there is no national plan for wind power, there is no specific procedure for investment in wind power projects. Other obstacles include limited human
resources. Wind energy is still a young industry, so the talent pool is restricted. Equally, the infrastructure in Vietnam is still very backward. Many of the areas identified as having the highest wind potential have the worst infrastructure; the roads are too small, with many super-elevations, and no bridges. For example, it took REVN two months to transport five turbines from the Phu My seaport to the project location on the 300km stretch of road. All of this ramps up the cost of building a wind farm tremendously. Additionally, there is a lack of services providing replacement equipment, repair and O&M, yet again increasing the cost of a project. The Vietnamese government has taken positive steps to encourage investment, however, introducing a set of incentives in 2011. The incentives allow wind projects preferential treatment in terms of funding, tax, fees and with infrastructure, such as exemptions and reductions in land rental. There are now a number of wind projects in the pipeline. There are now 48 wind power projects in Vietnam to date, with a total registered capacity of 5,000MW ranging from 6-250MW. Only the Binh Thanh project has actually started producing electricity for the grid. Wind Power Projects with Confirmed Financing:
30
investment (Us$) 300 Million 42 Million
21
40 Million
50
41 Million
40.5
71 Million
ninh loan 300 Commune, ducTrong district Vietnam Green VinhHai 100 power JsC Commune lien nghia invest- TrungBinh 100 ment JsC Commune
57 Million
investor name/ project name
location
Thanh Tung Group phuong Mai wind power JsC / phuong Main 1 wind power plant
Mau son district nhon Hoi economic Zone, Quynhon City nhon Hoi economic Zone, Quynhon City phu luc Commune, Tuy phong district pleiku City
Central wind power JsC
ThuanBinh wind power JsC / phu lac wind power plant Highland wind power JsC Cavico Transport and Construction
Cong ly Trade and Tourism Co. ltd. Cong ly Trade and Tourism Co. ltd.
Capacity (Mw) 200
238 Million 232 Million
lai Hoa Commune
200
238 Million
VinhTrach dong Commune
99
214 Million
32 september/october 2012 power insider
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This wind energy project is owned by the Vietnam Renewable Energy Joint Stock Company (REVN). The project has completed its first phase of building and will be operational with an installed capacity of 30MW, with twenty 1.5 MW wind turbines, supplied by the German Fuhrkaender company. The project cost 1.5 billion VND, and was connected to the grid in March 2011. A second hybrid project on the Phu Quy island produces power through wind and diesel generators. PetroVietnam’s project has a capacity of 9MW, with three 2MW wind turbines and 6 diesel generators at 0.5 MW each, all turbines were supplied by Vestas. The proposed sale price for the electricity is 13 US cents/kWh, which is considered competitive, and connection to the national grid is underway. Another similar project is located on the Con Dao Island. The project is owned by the German company EAB, and has negotiated a sale price of 25 US cents/kWh. The building is under preparation. In the Mekong delta province of Bac Lieu, there is a wind power project implemented by Cong Ly Trade and Service Company Ltd. The capacity of the first phase will be 16MW, with ten 1.6MW turbines supplied by GE, which are currently being installed. The GE wind turbines chosen for this project feature an 82.5 meter rotor for class
III wind conditions, making it a good match for the Bac Lieu site. The second phase will be completed by 2014 and will bring the plant’s capacity up to 120MW. The project will cost 5.2 trillion VND, financed by loans from the US Import and Export Bank. Cong Ly will also develop a 200MW project in the Can Gio district. If the plans are approved, the company will install 125 GE turbines at a cost of 10 trillion VND over the next three to four years. In addition, a very large investment has been pledged recently by the Belgium-based Enginity Company. The company proposed one windenergy and one solar-energy project in Ninh Thuan province with total investment of US$ 1.3 billion. This investment surpasses all the investments in wind energy to date. What is also heartening for the Vietnamese wind power market is the presence of wind turbine and wind pole manufacturers: GE has a wind turbine generator plant located at the Nomura Industrial Park in Hai Phong City with the investment of US$61 million.With an installed base of more than 2,000 megawatts, GE equipment today supplies approximately 18% of the country’s power generation capacity; Fuhrlaender intend to build a wind turbine plant in the Binh Thuan province with an investment of US$25 million; The CS Wind Tower (South Korea) makes and exports wind towers. The plant is located in the Phu My 1 Industrial Park in the Tan Thanh district; The VINA HALLA Heavy Industries (South Korea) plant is located at the My Xuan B1 Industrial Park, also in the Tan Thanh district. This plant makes exports 400 wind towers a year worldwide; The UBI Tower Sole Member Co. Ltd is a company 100% owned by the Vietnamese, and is located in the Kim Xuyen commune in Hai Duong. The company makes 300 wind towers a year and exported 15 towers to Germany in 2011, 35 to India in 2010 and 125 in 2011. Bio-enerGy There are many reasons for the Vietnamese to invest in bio-energy technology. Because Vietnam has an established agricultural industry, the bioenergy industry has much room to grow. There are three types of exploitable bio-energies, and all have potential in Vietnam. The first of these is biomass. The biomass production in Vietnam is based on forestry and agricultural by-products and solid waste. It mainly includes rice husks, bagasse, coffee husks and wood chip. The biomass energy potential in Vietnam is estimated at 6.4 million tons a year, 60% from agriculture-by-products and 40% from animal manure and solid waste. This is equivalent to 10 million tons of oil a year. Many factories utilise biomass to power their facilities, such as the Go Cat power generation station operates on municipal solid waste treatment and has a 15,587,983 kWh electricity production rate. However, it is clear that the application of biomass technology is small scale; 90% of available biomass is currently used for household energy
needs, such as cooking and heating. In rural areas, biomass is still the main cooking fuel for 70% of the rural population. It is also the traditional fuel for many local production facilities. This may be because investing in biomass energy in Vietnam has faced difficulties in negotiating with EVN on the electricity selling price and getting loans from commercial banks for investment. These hinder the development of biomass for grid-connected electricity production. The second application is biogas. Biogas energy potential is approximately 10 billion m3 a year, which can be collected from landfills, animal excrements and agricultural residues. Biogas technologies have been researched and applied in Vietnam since the 1960’s. There are currently around 222,000 small-scale biogas plants that have been constructed in Vietnam. These biogas plants supply energy for cooking, lighting and electricity generation. Small scale biogas plants are considered the most complete technologies in Vietnam. Bio-digesters made from bricks, concrete and plastic have been tested and applied throughout Vietnam. At the industrial level, biogas is produced from the wastewater from production processes or recovered from landfills. Some of the typical biogas projects are: The Dong Xanh Joint Stock Co.’s Project in Quang Nam Province: production of 65% concentrated methane from discharge of ethanol plants at 100,000-120,000 m3/day. The cost of the project was US$ 5.3 million not including working capital. There are CDM-based projects that use the biogas recovered from waste water treatment in the An Giang Province. Invested in by Hoai Nam Hoai Bac Construction Trading Service One Member Ltd., such projects exist at the My Qui Industrial Zone with total investment cost of US$ 1.9 million and at Binh My at US$ 680,000. The third application is biofuel. Vietnam first began biofuel production around 20 years ago. However, to date Vietnam has had only some initial experience in research, pilot production and commercial production of biofuel. In 2009, the Ministry of Science and Technology issued a roadmap for bio-fuels. From 2011-2015, Vietnam will begin to produce additives, enzymes and other materials for bio-fuels and expand their production, develop new varieties of high productivity, and expand biofuel plant capacity to satisfy 1% of the country’s need for petrol by 2015. From 2016 to 2025, Vietnam will build an advanced bio-fuel industry that will produce 100% of the national requirement for E5 and B5 fuels, providing 5% of the nations fuel. To help achieve this target, many ethanol plants were built in Quang Nam, Phu Tho, Quang Ngai, Binh Phuoc and Dong Nai. Investments have piled up from domestic enterprises including PetroVietnam. For eTHanol planTs soMe TypiCal proJeCTs inClUde: Green Field Co. Ltd.’s production of ethanol in Quang Nam Province: 100,000 tons/year, fixed and working capital of US$ 44 million. This biofuel plant was built in 2007 and began power insider september/october 2012 33
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vietnam renewable energy
operating in 2008. It was the first bio-ethanol production plant in Vietnam. The project was supported by preferential loan from the government of VND 100 billion to invest in a waste water treatment system. PetroVietnam’s plant in Phu produces 100 million litres/year, with a total investment cost of US$ 85 million, this was operational from 2010. Thier plant in Dung Quat, operational from 2011, produces the same amount. Saigon Petro’s plant produces 40 million litres/ year, having invested US$ 5 million. This is by no means an exhaustive list, and they set a precedent for a growing market. Support mechanisms such as state investment, subsidies, tax preferences, and other capacity building programs will help investors to reduce their investment risk and generate satisfactory returns on capital. Additionally, foreign investors have shown interest in Vietnam’s biofuel industry. Many development projects sponsored by JICA, the Netherlands Government, and the Korean Government have supported research pilot production of biofuel. The US-based Golden State Biofuel alone has pledged a US$200 million investment to develop 10 ethanol plants that utilize rice husk.
In the next several years, however, there remain many challenges for biofuel development, many of which apply to all bio-energy applications: Production cost is still high and the sector needs Government support to compete with subsidized cost of fossil fuels; Infrastructure for production and distribution are not yet fully built out; Access to export market of biofuel requires strict compliance with various quality standards and other environmental and social requirements by importing countries that Vietnam does not have to capacity to comply with yet; Biofuel prices in Vietnam are still higher than that in neighbouring countries. Despite a high capacity potential, these obstacles will most likely continue to curb development, restricting projects using bio-energy to small scales. Naturally this will hinder profitability, though biofuel seems to have the main growth market. nUClear Despite not technically labelled a renewable energy, nuclear power is considered by the Government of Vietnam and energy experts as a clean and green source of power generation.
Under the Master Power Plan VII nuclear power is set to generate nearly 1,000MW, accounting for 1.3% of the country’s total power output, increasing to 7% after 2020.By 2030, Vietnam aims to build 10 reactors, hoping to generate enough nuclear power to account for 20-25% of its energy consumption by 2050. Vietnam plans to build a total of 13 nuclear plants across the country over the next two decades with a total capacity of 16,000 MW. Le Doan Phac, deputy director general of the Vietnam Atomic Energy Agency, cited a shortage of conventional fuel supply sources, including imports, as the principal motivation for Vietnam’s pursuit of nuclear power. Between 2009-11, Vietnam received a total of $1.14 million in funding to develop its nuclear power infrastructure.In the next two years, financial support will focus on developing human resources for the sector. Le Dinh Tien, deputy minister of the Vietnamese Ministry of Science and Technology claims that: “The consistent view of Vietnam is to utilize nuclear energy for peaceful purposes in a responsible manner while ensuring safety and security.” This is despite the Fukushima disaster that saw many countries cease nuclear activities altogether. Tien has said that Vietnam was addressing issues related to its nuclear power program, including developing sound nuclear infrastructure, establishing a technical support organization and enhancing international cooperation to ensure safety, security and nonproliferation. In May 2010 the prime minister established the Ninh Thuan Project Management Board which functions under EVN. EVN will be responsible for building and operating Vietnam’s first two nuclear plants, and will be the sole investor for both. The estimated $11 billion for the projects is to be financed with up to 25% EVN equity and the balance borrowed from countries supplying the technology. Russia and Japan have won bids to build these plants; South Korea is expected to be selected for
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vietnam renewable energy the third. Russia will provide $8-9 billion to build Vietnam’s first nuclear electricity plant, the Ninh Thuan 1 plant. Vietnam awarded the contract to Russian Atomic Energy Corp.(Rosatom), with construction scheduled to start in 2014. The plant is expected to be operational by 2020. EVN has signed a contract with the Japan Atomic Power Company ( JAPC) to conduct a feasibility study into the construction of a nuclear power plant in the southern Ninh Thuan province, as well as a memorandum of understanding with the International Nuclear Energy Development of Japan Co ( JINED). The two companies will now cooperate in designing, building and operating the proposed plant. EVN submitted six criteria which are to be addressed by the MoU. These include the supply of reactors using the latest technology, a stable supply of nuclear fuel, and support for the disposal of radioactive waste. In addition, JINED must support Vietnam in developing a nuclear energy industry, training workers and providing financial support. The requirements are in line with a May 2008 cooperation agreement, under which Japan agreed to help Vietnam prepare and plan for the introduction of nuclear energy, educate experts in nuclear power and help the country formulate nuclear safety regulations. GeoTHerMal The approximate potential for geothermal energy in Vietnam is variable. With more than 300 hot streams with temperatures ranging from 30 °C to 148 °C, mainly situated in Northwest and Central
Vietnam, there is an estimated geothermal power potential of 1,400 MW. Whilst only limited data on geothermal reserves for power generation is available, rough estimates indicate that a capacity of 400 MW could be reached by 2020. Vietnam’s first geothermal power plant has now been approved. The 25-MW plant will be located in Quang Tri Province’s Dakrong District. The project will cost around US$46.3 million. The geothermal plant can operate 24 hours a day without being affected by weather conditions such as sunlight, wind or sea wave. It’s reported that the geothermal power plant will use Hot Dry Rock (HDR) heat mining technology to mine the heat from the hot rock found almost everywhere at some depth beneath the surface of the earth. Water is pumped into hot, crystalline rock via an injection well, which becomes superheated as it flows through opening joints in the hot rock reservoir, and is then returned through production wells. At the surface, the useful heat is extracted to generate power and the same water is recirculated to mine more heat . The technology has been used by many countries in the world including the US, Germany and Iceland. This pioneering project aims to promote exploration of new sources of energy throughout Vietnam. Exploration and research will be key words in Vietnam’s geothermal future, as little data exists that can validate potential capacity or support the development of a market. sUMMary Vietnam’s attitude to renewable energy is curious. Like other nations, plenty of electricity
could be generated using a mix of renewable energy. For Vietnam in particular, wind and solar resources that could provide enormous value if properly exploited are practically lying dormant, whilst the government pour money into unsustainable industries such as coal and gas, and negotiate deals with foreign partners for the import of energy and fuels. A perfect example of Vietnam’s peculiar approach is the way in which bio-energies and nuclear power are being promoted. Despite 70% of the country’s population using bio-energy in their homes for domestic applications, few moves have been made to nationalize production as an industry. Conversely, nuclear power is the only renewable energy source that is attracting large scale development and investment, despite the fact that Vietnam has no nuclear infrastructure or expertise. This focus on nuclear proves that the Vietnamese government doesn’t fear entering a market in which they have no experience, so the relative youth of renewable energy markets cannot be cited as the reason for holding back. What Vietnam seems to prefer is large scale power projects. With the deficit between supply and demand so high, huge projects that produce thousands of megawatts, such as thermal, hydro and nuclear, will address that deficit quickly. Whilst this is an understandable attitude, and one that provides numerous opportunities for profitable investment, the development of renewable energy is still essential, as Vietnams approach to power generation cannot be sustainable in the long run.
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3S modultec caSe Study
Passionate about PV – Committed to systems T
he nuclear disaster at the Fukushima reactors in March 2011 sparked a fresh political debate about an exit from nuclear energy and the need for more renewable energy sources. Some countries have already decided to pull out of nuclear power and are now seeking suitable opportunities within the energy mix to cover the consistently growing demand for electricity. In the long-term, we are convinced that photovoltaics will remain a strong growth market and that solar power will be an increasingly important energy source in the future. We will use innovation, highly developed systems and first-class services to make an important contribution to the reduction of manufacturing costs of solar systems so that grid parity can be reached worldwide. We are in an excellent financial and strategic position from which to profit sustainably from a recovery in demand in the photovoltaic equipment market in the years to come. swiss Quality for solar energy 3S Modultec is a member of the Meyer Burger Group. 3S Modultec develops and produces both solar modules and the production equipment needed to manufacture them. A strategy of mutual interaction between both areas of business fosters an environment of continuous innovation and permits synergies between departments. It gives us a unique perspective and expands our knowhow of the whole solar module manufacturing process. So we are familiar with both, the perils of mechanical engineering and the practical everyday requirements of module production. This enables us to find solutions for you where others fail. We go to the very edge of the feasible to satisfy your needs. New systems are tested rigorously by us in our own module production facilities before they are released for sale. Many of our highly qualified personnel have been involved in photovoltaic technology since its very beginning and between them have an immense cumulative knowledge. As a customer, you benefit from a comprehensive knowhow transfer for the entire process, as well as from innovative solutions, which take into consideration all relevant aspects of efficient, reliable production. Swiss specialists with top-notch education and years of experience deal with our customers’ concerns personally, and that, together with a clearly arranged organizational structure with rapid communication channels, guarantees your total satisfaction with all our products. 3S Modultec is a member of the Meyer Burger Group. We have for years been the world’s technological market leader for production plant for the manufacture of solar modules.
Know-How all over tHe solar Module production The key components in our product range are automatic soldering machines (define the electrical
output excellence of your module over its lifetime), laminating lines (deciding on the lifetime of your product) and module testers (measuring your real module efficiency). Production equipment from 3S Modultec guarantees stable, reliable processes, a high throughput and outstanding product quality. Know-how transfer and many additional services are available only to our customers, an added value you find only at 3S Modultec – we offer more than the production equipment, we offer entire solutions for the whole module production system. Know-How in cell connection In solar module production, cell connection is a critical process which determines the duration of electrical output, i.e. the performance and lifetime of the module. Due to the proven Soft Touch soldering process and the precise temperature management system of the Meyer Burger Group company Somont we deliver excellent soldering results every time. We have realized a high-speed soldering and handling concept: a unique modular system offering solutions for every capacity. Our machines are used by the leading solar module producers all over the world, as they have come to trust our well engineered solutions.
Fully automated for highest electrical output
Know-How in laMination The reproducibility of the lamination process determines the quality and thus the lifetime of the PV modules. Our lamination lines are equipped with our patented hybrid heating system to guarantee unmatched temperature homogeneity, compatible for all cell technologies. Furthermore, it guarantees highest process stability and though best module quality. The solar modules are able to operate over a long period without any significant power degradation even under most extreme climatic conditions. For example, we developed extremely weatherproof solar modules for the Monte Rosa Lodge in Switzerland, which is almost 3000 meters above sea level and must therefore bear up under most extreme weather conditions. Through the aesthetically appealing integration of the solar panels into the façade, the result is a perfect synthesis of a robust, weatherproof building shell and efficient, environmentally friendly generation of electricity. Know-How in testing Pasan, also member of the Meyer Burger Group, is the worldwide technological leader in testing systems for solar cells and modules and sets the industry standard. Their testers have a unique light uniformity on the illuminated surface and outstanding light stability during the flash. Only with this accurate testing system an appropriate quality control is warranted. Furthermore, testing decides on your profit. Testing is decisive for sales because this is where the solar modules that have been produced are classified and sold in relation to their performance. The more precise the measurements are, the more the producer can restrict the target values. This is
Europe’s highest solar power station on the ‘Klein Matterhorn’ at an altitude of almost 4000 metres
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how we offer our customers a decisive advantage in the classification of their products, with a sustained effect on the revenues. get swiss Know-How in Module production Module manufacturers who develop new products benefit from our know-how in production. The module production and process know-how is the true source where 3S Modultec has been coming from and where a long term experience has been accumulated. This is a unique value, where others can hardly compete. With our assistance, new customers can position themselves better on the market. We show our customers how to produce solar modules efficiently and the materials with which good solar modules are produced. By dedicated training sessions we support their personnel in an optimum way as well as how clients can sustainably improve their income and the quality of production. In certification, we are able to support our customers in such a way that their own module certificate becomes available as quickly as possible after production of the modules has begun. The process of certification begins with us parallel to production of the equipment that has been ordered. That is possible because we are able to process important partial steps of certification on our own automated production line at the factory in Switzerland. froM solar silicon to solar systeMs witHin one group The present Photovoltaic module mass market is clearly dominated by the crystalline technology,
We transfer our know-how to our customers which is our focus. 3S Modultec makes important efforts to improve the module production equipment and optimise the module design to continuously lower the module costs and enhance its quality as well as lifetime. As a part of the Meyer Burger Group, 3S Modultec is able to act on a broad part of the photovoltaic value chain. This results in a global view of the whole process from the solar wafer to the solar module. Therefore, collaboration with other companies in the solar value chain is for us part of the daily business. New developments as e. g. the highly efficient HJT-cells, developed by Roth&Rau, member of the Meyer Burger Group, can be integrated in the machine and module design development process at a very early stage. Herewith, the market introduction of the latest technologies can be done on a most efficient way. As we always strive to be a premium supplier, we never make any compromises. Our products are innovative, reliable, long-lasting, rock solid, they are Swiss quality.
‘AS A PART OF THE MEYER BURGER GROUP, 3S MODULTEC IS ABLE TO ACT ON A BROAD PART OF THE PHOTOVOLTAIC VALUE CHAIN. THIS RESULTS IN A GLOBAL VIEW OF THE WHOLE PROCESS FROM THE SOLAR WAFER TO THE SOLAR MODULE. THEREFORE, COLLABORATION WITH OTHER COMPANIES IN THE SOLAR VALUE CHAIN IS FOR US PART OF THE DAILY BUSINESS. NEW DEVELOPMENTS AS E. G. THE HIGHLY EFFICIENT HJT-CELLS, DEVELOPED BY ROTH&RAU, MEMBER OF THE MEYER BURGER GROUP, CAN BE INTEGRATED IN THE MACHINE AND MODULE DESIGN DEVELOPMENT PROCESS AT A VERY EARLY STAGE. HEREWITH, THE MARKET INTRODUCTION OF THE LATEST TECHNOLOGIES CAN BE DONE ON A MOST EFFICIENT WAY.’
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business in vietnam
DOING BUSINESS
IN VIETNAM Vietnam: Culture overview Located in Southeast Asia, the Socialist Republic of Vietnam is a culturally rich country. With a population of nearly 92 million, Vietnam is a communist state that has recently embraced a burgeoning presence in the global economy. Vietnam has experienced severe economic turmoil in the past century due to the inefficiencies of a centrally planned economy as well as the trade embargo from the United States and parts of Europe. The 1980s brought about economic reforms that allowed for substantial growth until Vietnam faced the woes of the Asian financial crisis in 1997. Now a member of the World Trade Organisation, Vietnam has taken progressive steps to transform itself into a market based economy which has seen its economy grow significantly. As such, Vietnam is becoming an increasingly attractive market for international investments. Vietnam’s diverse cultural mix reflects its historical status as a nation almost always at war or in subjugation. The country was under Chinese rule for 1000 years, colonised by the French in mid-1800’s, and gained independence in 1945 only to lurch into vicious civil war nine years later. This civil war resulted in the victory of the Communist Party, which has ruled over and overseen the
development of Vietnam ever since. Because of Vietnam’s turbulent history, traces of many cultures persist in Vietnamese values, and the influence of the French, Chinese, and the Russians can be seen throughout the country.Vietnam also has 54 ethnic groups of its own, including the Tay, Thai, Muong, Khmer and the largest, the Kinh, which makes up 87.17% of the population. Having a comprehensive understanding of Vietnam’s unique cultural values and traditions is essential if you want to develop strong and successful business relationships with Vietnamese businessmen.
Key Cultural Concepts HierArCHY Like a great deal of Asian countries, business organisations in Vietnam tend to be hierarchical. Decisions and ideas are generated at the top, and more often than not, the person with the highest status has the most influence over the decision. Status is important in Vietnamese society and it is obtained with age and education. In Vietnamese culture it is very important to respect more senior individuals, whether by education, job position or age. The Vietnamese business world is dominated by men. The majority of Vietnamese women work as secretaries, assistants or other similar
administrative roles. Men are accustomed to working with foreign women in more senior roles, however, and will treat them equally. ConFUCiAnisM Based on the teachings of the early Chinese philosopher Confucius in the 6th century BC, Confucian teachings emphasise the importance of relationships, responsibility and obligation. This philosophy is still a vital component of Vietnamese society and is prevalent in Vietnamese business culture in conserving the harmony of the collective good. ColleCTiVisM Vietnam is a collectivist society in which the needs of the group are often placed over the individual. Family and community concerns will almost always come before business or individual needs. This is reflected in their political system, which is communist republic. THe ConCepT oF FACe The idea of saving face is an important concept in Vietnamese society. The Vietnamese will do anything to prevent loss of face, even if it means to avoid confrontation or telling others what they want to hear rather than dealing with immediate issues.
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language when possible, so have all written documents translated into Vietnamese. It is also useful to employ a translator, as your business counterparts in Vietnam will not necessarily indicate when they do not understand. MeeTinG & GreeTinG Initial introductions in Vietnamese business are formal. A handshake is the normal greeting and should also be exchanged upon leaving. Occasionally a slight bow will accompany the handshake. Handshakes usually take place only between members of the same sex. Always wait for a woman to extend her hand. If she does not, bow your head slightly. There are several traditional greetings that differ depending on the status and title of the person you are meeting. If you are confident you are using the correct one, your Vietnamese counterpart will be impressed to hear it. If you are not confident, the safe alternative is xinchao (pronounced seen chao) which is a very polite way to say hello and good bye without identifying titles. nAMe And personAl Address Vietnamese names start with the surname followed by the middle and then the first name. For example: in Phan Van Khai, Phan is the family name, Van is middle name and Khai is the first name It is always a good idea to ask a native speaker to help you identify which name you should use. It is important to use titles whenever possible. This formality is a sign of respect, and it is advisable to clarify how you will address someone very early in a relationship, generally during your first meeting. The correct structure for titles is the appropriate title followed by the first name, not the surname.
Term: Ch� (f) when addressing a woman who is slightly older than you em (m or f) when addressing some younger Ông(m),Bà(f) when addressing an elderly man(ong) or woman(ba) Cháu ( m or f) when addressing a child
pronounciation chee em ong/ba chow
If a person does not have a professional title, there are others that are acceptable. You must address a person using his or her first name after a title that properly conveys their status. The table (right) provides a helpful guide. A married Vietnamese woman always retains her maiden name; she will use her husband’s last name on formal occasions only. If you are a Communist you can refer to someone as “Comrade”. CoMMUniCATion There are a number of verbal and non-verbal types of communication that are essential to understand during meetings to maintain good business relations: Maintain a soft voice during presentations and negotiations, as loud voices and excessive hand gestures are often perceived as rude and make Vietnamese uncomfortable. Vietnamese negotiations are punctuated by long periods of silence during negotiations, as the Vietnamese tend to wait a while before responding. Your Vietnamese counterparts may also remain silent if there is a disagreement in order to save face. In Vietnamese culture,direct eye contact, especially when this person is of a higher
It is important to avoid unintentionally causing a loss of face, so be aware of your words and actions. Understanding how face is lost, saved or given is critical. Criticising someone in public, not keeping promises, accusing someone of poor performance or reprimanding them publicly will lead to a loss of face. Someone can be given face by complimenting their hospitality or business acumen. lAnGUAGe There are a number of spoken languages in Vietnam. The official language is Vietnamese, which is a tonal language. This means that with each syllable, there are six different tones that can be used which change the definition. It is a very difficult language for vistors to pick up. Although there are some similarities to Southeast Asian languages, such as Chinese, Vietnamese is thought to be of a separate language group.There are other languages spoken as well, such as French, Russian,Chinese, Khmer, Cham and the languages spoken by tribes inhabiting the mountainous regions. International business in Vietnam is mainly conducted in English, and many members of the business community have a decent command of the language. It is however polite and appreciated when foreigners use the native power insider september/october 2012 41
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business in vietnam status or of a different gender, usually means a challenge or an expression of deep passion. The proper respectful behaviour is to avoid eye contact. The smile is a non-verbal symbol that has a number of connotations which can be misunderstood. For the Vietnamese, the smile is a proper response in situations in which verbal expression is not needed or not appropriate. It can convey respect or is a substitute for “I’m sorry”, “Thank you” or “Hi!” A smile is also used instead of a“yes” to avoid appearing over-enthusiastic. A smile can be used as a proper response to scolding or harsh words to indicate that one does not harbour any ill feelings toward the interlocutor, or that one sincerely acknowledges the mistake or fault committed. Additionally, the Vietnamese smile can be used to show all sorts of emotions, from happiness to anger or even grief. The Vietnamese use of the word yes can sometimes cause confusion. As well as simply meaning yes, it may be a polite way of saying “Yes, I am listening,” or “Yes, I am confused,” or “Yes, I do not want to offend.” If given a compliment is proffered by a Vietnamese colleague, be polite and deny it. Modesty is considered a blessing, and not overly promoting yourself or your associates is often better received and can lead to smoother relations with your counterparts. This table below gives a brief overview of some of the most significant gestures and their meanings: non-Verbal Communication Bowing
dress For THe oCCAsion Business attire in Vietnam is professional and conservative.Suits and ties in subdued colours are most acceptable, and bright colour of any kind is deemed inappropriate. A dark coloured suit and tie are customary for men, and women should wear conservative suits or dresses; a blouse or other kind of top should have a high neckline. Women must take care that their skirts are not above the knees. Good quality jewellery that is neither ostentatious nor overly expensive is recommended for making the right impression. Flat shoes or very low heels are the main footwear options for women, especially if you are taller than your hosts. High heels are acceptable only at a formal reception hosted by a foreign diplomat. relATionsHips Relationships are critical to successful business partnerships. Business relationships in Vietnam begin relatively formally, as the Vietnamese may be suspicious of those they don’t know well. If you spend time during the first few meetings getting acquainted these relationships will develop. And the Vietnamese business relationship inevitably becomes a social relationship after a while. Therefore, any initial meetings should be solely used as a “getting to know you” meeting. The more you share your personal life, including family, hobbies, political views, aspirations, the closer you are in your business relationship. Meaning Greeting; great respect.
Touching child’s head
not appreciated, but not offensive.
Avoiding eye contact
showing respect
winking
not decent
pouting
disdain
Frowning
shows frustration, anger, or worry
palm of right hand out, fingers moving up and down several times
“Come here.” not used to people senior in age or status
Middle finger crossing over forefinger or forefinger crossing over middle finger with the other fingers closed over the palm
obscene gesture
Thumb down, other fingers closed Thumb upright, other fingers closed
no meaning no meaning
Forefinger and top of thumb meet to form circle, other fingers upright
“Zero.” poor quality
palm of right hand facing oneself, forefinger crooked and moving back and forth
offensive to adults; threatening to children
Holding hands with or putting an arm over the shoulder of a person of the same sex
Friendly gesture, no sexual connotation
Holding hands with or putting an arm over the shoulder of a person of the opposite sex
not usually done in public
Crossing arms patting a person’s back, especially those senior in age or status pointing to other people while talking Touching someone’s head
sign of respect disrespect disrespect, threatening extremely rude; the head is considered to be the centre of a person’s spirit
putting one’s feet on a table or sitting on a desk while talking
rude
placing one or both hands in the pockets or on the hips while talking
Arrogance, lack of respect
MeeTinGs Vietnamese prefer to schedule all meetings ahead of time, usually by several weeks. This arrangement will suit both local and foreign parties, as there are many national holidays and festival days in Vietnam. The most important festival of the year is Tet, a week-long event in late January or early February that heralds the new lunar year and the advent of spring. In addition to Tet, there are about twenty other traditional and religious festivals each year. The Vietnamese are also sticklers for punctuality. They strive to be on time, and you should always aim to arrive at the stated time. However, if running late, let your business partners know as soon as you can. This will be received with politeness and understanding. The exchange of business cards is a common practice in Vietnam, so ensure you have a plentiful supply. It is polite to have your business cards printed in both English and Vietnamese. When offering your card for the first time, give it using both hands with the Vietnamese side facing up. Negotiations and business dealings can move quite slowly in Vietnam. The Vietnamese will want to examine everything as well as consult their group before reaching an agreement. There is also often a lot of bureaucracy to go through before any deal can be made.The application process to establish a local office can be time-consuming, taking up to 18 months. Additionally, even nonreligious individuals will often consult astrologers to find out whether a deal is made in auspicious circumstances. In business meetings, the eldest member of the group enters the room first, and members of the meeting will usually be sat hierarchically. You will usually be served tea and something to eat. Generally this will be Vietnamese green tea or soft drinks. Be sure to sample them, as failure to taste or drink a small amount of anything is considered impolite.
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business in vietnam eATinG Business meetings in Vietnam often include a lunch or conclude with a dinner. Most business luncheons and dinners are held in hotels, restaurants, or government facilities. Usually your host will arrange for a dinner during the early part of your visit. You are expected to reciprocate by arranging for a return dinner. Business is not usually discussed at dinners, although it may be at luncheons. Dinner in Vietnam usually consists of several courses. Several dishes will be put on the table and you will be expected to take some from each. Chopsticks and flat spoons are most commonly used in Vietnam, but most modern restaurants also have Western eating utensils. The end of the meal is usually signalled by a plate of fruit or other sweet dish. After waiting a respectful period after the last course is consumed, the guest is expected to make the first move to leave. Be sure to shake hands with all Vietnamese participants and conclude by thanking your host profusely. Vietnamese dining is not as formal or ritualised as other Asian cultures, but there is some culinary etiquette that would be advisable to follow: • Wait to be shown where to sit. • The oldest person should sit first. • Pass dishes with both hands. • Chopsticks should be placed on the table or a chopstick rest after every few mouthfuls or when breaking to drink or speak. When you are finished eating, rest your chopsticks on top of your rice bowl. Don’t stick the chopsticks vertically into the rice, as this is a deadly omen. • People hold bowls close to their faces in their hand; it is considered lazy to eat from a rice bowl that is on the table. • Hold the spoon in your left hand while eating
soup. • Try to finish everything on your plate. • Cover your mouth when using a toothpick. Alcohol is also popular in Vietnam. Vietnamese beer or imported wines and liquor are usually served with a meal. It is appropriate for you and your host to exchange toasts, with the host usually going first. Individual toasts can also be expected during the meal. When toasting your host or guest, stand and raise your glass with both hands in the direction of the senior or oldest Vietnamese present. Give a short but complimentary speech about Vietnam, the friendship of your hosts, and prospects for a successful business venture.
GiFTs Because of the significance of interpersonal relationships in business culture, gift giving is a common practice in Vietnam. Gifts do not need to be expensive and should be a simple token of appreciation or gratitude. Common gifts include fruit and flowers, items with your company name on them and wrap the gifts in colourful paper. Avoid giving handkerchiefs, anything blackas it isassociated with funerals, yellow flowers or chrysanthemums. Gifts such as scissors, knives and other sharp objects should be avoided as they symbolise the cutting of the relationship. If it is a gift for one Vietnamese partner you should give the gift at private occasion or at a business meeting if no-one else present. If you have a gift for the whole office or company, you should give it after the business meeting with the whole office’s employee. Vietnamese may or may not open gifts when they are received; leave the option to them. You should also defer to your host as to whether you should open a gift when received or not. Regardless of when it is opened or what it is, profuse thanks are always appropriate.
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vietnam waste water & desalination
WASHING AWAY W
Water Treatment and Desalination In Vietnam
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WASTE
V
ietnam doesn’t suffer from the kind of water shortages that plague industries in locations such as India and China, but guaranteed availability of a fresh water supply is still not without its challenges. Obstacles include polluted and exhausted water sources, high urban water losses (33% or 1.3 million m3/day), water shortage in the dry season, and shortage of desalinized water sources in coastal cities. This combined with a water supply infrastructure that is behind economic development and a water tariff that is not aligned to business needs creates a difficult climate to ensure supply. Naturally, demand for fresh water is on the rise, with water consumption set to rise from 2545 liters/person/day to 120-150 liters/person/ day by 2020. Over half of that water comes from groundwater. Vietnam has ambitious plans for water consumption also, aiming for 100% of rural inhabitants to have access to a fresh drinking water supply by 2020, up from 75% now. In order to meet both targets and demand, the Vietnamese government aim to develop the wastewater treatment and desalination market. Currently, only 43% of industries in Vietnam
have water treatment facilities, and only 13% of industrial zones have water treatment plants with sufficient capacity. The production of electricity, gas and water production sectors make up 28.4% of industry wastewater plants, and only 6 cities in Vietnam having wastewater treatment plants. Additionally, many businesses tend to dump untreated wastewater back into sewers, rivers and lakes despite environmental laws prohibiting the practice. Wastewater is a particular problem in Ho Chi Minh City (HCM City), which is one of the most polluted cities in Vietnam. Until now, only half of the industrial wastewater generated in HCM City has been treated to set standards before final disposal. In addition, high water stress has been observed due to over exploitation of freshwater resources for industrial and domestic uses in HCM City and the surrounding provinces that have experienced rapid industrial growth. To help tackle the problem, a pilot scheme has been set up by the Ho Chi Minh City University of Technology (HCMUT) in Vietnam, the Thailandbased Asian Institute of Technology (AIT) and the Institute National des Sciences Appliques (INSA) in France. The project aims to create a scheme of sustainable water resource management and wastewater reuse.
“Our focus is developing membrane-based wastewater reuse activities in Vietnam,” said Professor Visvanathan, a membrane technology expert from AIT and project coordinator. Visvanathan hopes that this joint industryacademia project will develop local technical and research skills and promote membrane-based wastewater-reuse activities in the country. The project set up a membrane-based wastewater treatment unit at the Le Minh Xuan Industrial Park in HCM City. Field data is being collected to identify the wastewater reusability potential in the region. The project has brought out “very good results” with the treated wastewater from Le Minh Xuan Industrial Park, one of the most polluted zones in HCM City. The treated water is used to water trees and clean roads, said Dr Bui Xuan Thanh of HCMUT. There are plenty of other wastewater treatment plants being commissioned, with expansions or developments of projects at Thuy Van, Thai Binh, Hong Linh, Cao Lanh, and Chau Doc. The figure below shows the projects worked on by the Saigon Water Corporation: power insider September/october 2012 47
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vietnam waste water & desalination project name expansion of Thu duc water plant phase iiii expansion of Thu duc water plant phase iii expansion of Thu duc water plant phase V sludge Treatment project for Thu duc water plant Tan Hiep water plant phase 2 Tan Hiep water plant phase 3
investment duration 2009-2011 2010-2014 2020-2024 2010-2013
2011-2013 Beyond 2020
Additionally, a new seawater desalination technology has been demonstrated by Taprogge GmbH in the Can Gio District, HCM City. The German firm claims that the technology can solve drinking water issues in the country’s remote areas. The new technology, named Taprogge Terrawater, has been applied successfully over the two months in the coastal district, with about 5 cubic meters of potable water produced daily at the firm’s demonstration plant. While most desalination developments concentrate on the improvement of energy consumption in large-scale desalination plants, Taprogge Terrawater focuses on small-scale desalination that is useful in “decentralized desalination” applications, such as remote areas and islands where residents cannot get access to regular water supply networks. “Especially in small and remote areas like the Mekong Delta it is excessively expensive for the Government to build water supply grid,” said Detlef Taprogge, President of the company. “There is a definite need for ‘stand alone’ systems which can produce safe drinking water from seawater, brackish water or even from wastewater.” Taprogge Terrawater technology is also
estimated Cost
project Capacity
1000 billion Vnd 1000 billion Vnd 2500 billion Vnd 200 billion Vnd
300,000 m3/day
864 billion Vnd -
300,000 m3/day 500,000 m3/day with sludge treatment water supply capacity is estimated to be 2,150,000 m3/day from stations of Thu duc water plant 300,000 m3/day 300,000 m3/day
exceptionally green, as it only uses waste heat or solar energy to run the system. This cuts down on the costs of running the system, as the fuel sources are free and is ideal for remote locations. Desalination technology has also been brought to the population of An Binh. Located 30km off the coast of Quang Ngai in central Vietnam, the islanders have suffered water shortages for a long time, and have to pay prices up to 30 times higher for water than in other places in Vietnam. This issue has now been remedied by the inauguration of a US$1million desalination plant on the island. Under an MOU signed between Doosan Vina and the Quang Ngai provincial government in August 2011, the Korean company donated funding to build two desalination plants, each capable of filtering and desalinating seawater to produce 200 cubic metres of fresh water every day. Construction of the plants on An Binh Island began on May 4, 2012 and was completed in only four months. It is expected to end the island’s century-long dependence on rainwater and provide residents with access to fresh water. To ensure the safe and efficient operation of the facility, Doosan Vina will dispatch a technical
team to train local operators for one year.To date, Doosan Vina has spent nearly US$2 million on community programmes in Vietnam, mainly in Quang Ngai province. The plant was opened with a ceremony in August this year. The ceremony was held by Doosan Heavy Industries Vietnam (Doosan Vina), and attended by authorities, representatives from the Republic of Korea (RoK) embassy in Vietnam, the RoK International Co-operation Agency (KOICA), as well as local residents of An Binh Island and domestic and foreign media. Doosan Vina, a subsidiary of Doosan Heavy Industries, also has a high tech industrial complex in the Dung Quat Economic Zone of Central Vietnam’s Quang Ngai Province. The company manufactures and supplies huge infrastructure products, including the equipment required to build desalination plants. An additional project that the Doosan Vina industrial complex is working on, is the manufacturing of three of the eight Multi Stage Flash (MSF) units for Saudi Arabia’s Ras Azzour desalination project. Each evaporator will weigh 4,000 tons. The SR6.6 billion ($1.76 billion) plant will have a total production capacity of 1,037,000 m3/d (274 MGD), approximately 70% of which will be produced using MSF. The balance will be produced using SWRO. Doosan has said it will complete the project by January 2014. Desalination and wastewater treatment technology is on the rise in Vietnam. There are vast opportunities for desalination facilities in tandem with the mass of costal thermal power plants being constructed, utilizing seawater for critical processes in cooling and steam generation, in addition to critical waste water treatment processes for key industrial sectors across Petrochemical, Steel and Cement. Aside from the large scale projects there is also opportunity for investment in smaller projects, such as the plants for communities in rural and remote areas.
50
48 September/october 2012 power insider
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desalination round table
DESALINATION: SOLVING ASIA’S WATER PROBLEMS
AS CoUNTrIES THroUgHoUT THE ASIA PACIFIC CoNTINUE To DEvELoP AND groW, AS DoES THE DEMAND For CLEAN WATEr SUPPLIES boTH For THE PEoPLE AND INDUSTry. WATEr TrEATMENT, AND DISTrIbUTIoN NETWorKS rEQUIrE ENHANCEMENT AND NEED To bE DEvELoPED IN orDEr To MEET DEMANDS To ALLoW For SUCH CoNTINUAL ProgrESSIoN CATErINg For THE EvEr INCrEASINg PoPULATIoNS, bUSINESSES AND PoWEr UTILITIES IN ASIA. PoWEr INSIDEr HAS ALLoWED For THoSE INvoLvED IN SUCH ProgrESSIoNS To voICE THEIr DEvELoPMENTS AND EXPLAIN WHAT EXCITINg MovEMENTS ArE HAPPENINg IN THE MArKET.
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welcome Mr. ong to the current issue of pi Magazine Asia. Thank you for taking time to speak with us.
Mr SAM oNg, HyFLUX’S groUP DEPUTy CEo
PI: Can you provide us with a brief outline of your operations in the Desalination business throughout Asia? SO: In the area of desalination, Hyflux provides membrane-based solutions to our key markets in Asia and the Middle East and North Africa (MENA) region. To date, we have secured and/or completed seven large-scale municipal desalination projects in Asia and MENA which are capable of producing some 1.7 billion m3 of water per day with project costs of more than USD2.5 billion. Of the seven plants, four are operating – they are in Singapore, China, Algeria and Oman. Another plant in Algeria which is also the world’s largest seawater reverse osmosis (SWRO) plant is close to completion. We are currently developing Singapore’s second desalination plant, and we have recently signed a codeveloper agreement to build a desalination plant in India, pending the water purchase agreement and the project’s financial close. Six of the seven plants are design-buildown-operate (DBOO) projects with longterm concessions with the respective municipal governments. The project in Oman was to design and supply a desalination facility to an independent integrated water and power project. Each desalination project that we have developed is distinctive for different reasons. Our first municipal desalination project was in Singapore which also happened to be the country’s first Public-Private-Partnership (PPP) initiative. We secured the project on a 20-year build-ownoperate arrangement in 2003 and completed the plant six months ahead of schedule in 2005. Named SingSpring Desalination Plant, the desalination technology adopted for the plant is reverse osmosis. The plant’s capacity is 136,380m3/day and is able to meet some 10% of Singapore’s current water
needs. When it was completed in 2005, SingSpring held a number of distinctions, such as the largest SWRO desalination plant in the region and one of the most energy efficient desalination plants in the world. It earned Distinction at the Global Water Awards 2006, with the judging panel calling it “a brilliant work of engineering which has challenged the global perception that desalination is a high cost source of water”. The project financing deal was awarded the Euromoney Asia Pacific Water Deal of the Year in 2003. It would be right to say that SingSpring boosted Hyflux’s profile in the global water industry. From SingSpring, we went on to develop the Tianjin Dagang Desalination Plant in northern China. With a designed capacity of 100,000m3/ day, it is China’s largest SWRO. It is also the first SWRO desalination project to incorporate Hyflux’s proprietary Kristal® ultrafiltration (UF) membranes in the pre-treatment system before the RO process. Thereafter, all other desalination plants that we have developed feature Hyflux’s UF membranes in the pre-treatment system before the RO system. Our first project in Algeria is a 200,000m3/day capacity plant in Tlemcen, while the second which is located in Magtaa is the world’s largest SWRO with a designed capacity of 500,000 m3/day. Tuaspring Desalination Plant, Singapore’s second desalination plant, has the distinction of being the first desalination plant to incorporate an on-site power plant which will supply electricity to the desalination plant. PI: How do you envisage the Desalination market continuing its development in Asia? SO: Rising industrialisation and urbanisation have placed tremendous stress on water resources. Water pollution and contamination, wastage, overexploitation, changing climate patterns, prolonged droughts, excessive rainfall, competing demands and depleting supplies – all these are common challenges that countries have to grapple with. It is
Hyflux’s SingSpring Desalination Plant, Singapore. Images supplied by Hyflux
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desalination round table well acknowledged that fresh water shortage places constraints on economic and social development. Increasingly, Asian countries are looking at recycling of used water and desalination as alternative and sustainable sources of water. Where desalination has been seen as expensive previously, it is now accepted as a viable and affordable water source due to technology advancements, particularly membrane-based desalination technologies. In some areas, desalination is used to produce potable water; in others, desalinated water is used by industries, thus freeing natural fresh water resources for potable use. China and India remain two key Asian markets for desalination. Clearly there is strong support by the governments of these two countries to beef up desalination capacity. China is committed to increase government spending as well as to encourage private sector participation in desalination. This commitment to water management and sustainability extends to the provinces. While these initiatives spell opportunities for desalination providers, the emphasis on building up local Chinese desalination technologies and expertise would also mean rising competition andKendal, pricing pressures. The onus is on KENDAL project, South Africa – 6x690MW Coal Fireddesalination Power plant – suppliers Indirect Dryto Cooling Systemto be foreign continue innovative and cost-efficient. Unlike China where the central government drives desalination policies, in India, the decision making lies with the individual states. States such as Tamil Nadu, Gujarat, Maharashtra, Karnataka and West Bengal are key markets for desalination. While foreign investments and private sector involvement are encouraged for infrastructure projects in India, the Public-Private-Partnership (PPP) model is not widely understood at the working level as is the concept of water purchase agreement which is fundamental to a successful PPP. Financing for projects can also be a key constraint as long-term financing and instruments are not readily available in India and financing terms may not be favourable. The funding challenge can be overcome by working with strategic partners and tapping on financing from international financial institutions. We also see tremendous opportunities in the Middle East and North Africa which are traditional markets for desalination. In MENA, the trend is moving from thermal desalination to more energy efficient membrane-based desalination. The current global economic slowdown will have an impact on new desalination projects coming onstream in Asia – projects could be delayed, scaled down or even cancelled. In the long term however, the desalination market in Asia continues to be a fast growing one. PI: What advances have you had in your technology? SO: We embarked on developing our proprietary membrane technologies in the late 1990s. We have since launched various membrane products and systems with different treatment capabilities for wide-ranging applications such as for aquabased industrial waste streams, water purification, wastewater treatment and recycling and seawater desalination pre-treatment. Our flagship range of ultrafiltration membranes called Kristal® which have been proven to effectively remove impurities such as
UF building at Tianjin Dagang Desalination Plant, China. Images supplied by Hyflux
suspended particles and micro-organisms to produce a consistent, high-quality filtrate, making it suitable for feedwater that has high turbidity. Kristal® membranes are widely used in seawater desalination pre-treatment for large-scale SWRO desalination projects, such as the desalination plant that we have built in China and Algeria and in an on-going project in Singapore. Our other proprietary membrane products include PoroCep® hollow-fibre and Petaflex® flat sheet membrane bioreactors for municipal and industrial wastewater treatment and reclamation and FerroCep® stainless steel tubular membrane which is capable of handling difficult industrial streams and extreme conditions. We continuously push for new membrane applications, products and systems. PI: What are the most successful projects you have been involved in recently? SO: We are especially proud of the SWRO plants that we have developed in Algeria and our on-going project in Singapore. In Algeria, our desalination project in Magtaa is almost completed. With a designed capacity of 500,000m3/day, it is the world’s single largest ultrafiltration and reverse osmosis desalination plant. It employs Hyflux’s proprietary Kristal® UF membranes for the pre-treatment process before the RO. In Singapore, we are developing the country’s second desalination plant and also South East Asia’s largest. When completed in 2013, Tuaspring Desalination Plant will be able to produce 318,500m3/day of fresh water. An innovative feature of Tuaspring, other than Hyflux’s Kristal® UF pre-treatment, is the integration of an on-site combined cycle gas turbine power plant which will supply electricity to the desalination plant. Excess power that is generated will be sold to the national electricity grid. Integrating both facilities will bring about added operational and cost efficiencies. This is the first project in Asia that showcases integration of a desalination plant with a power plant. PI: When looking at reliability and efficiency of Desalination systems and plants, what are the most important factors an operator should consider? SO: One factor that an operator should consider
include optimising energy consumption as energy cost is the largest single component and makes up some 40% to 50% of the operational costs of an SWRO desalination plant. It is therefore imperative that as an operator, we would want to incorporate an energy optimisation program to ensure that the plant operates efficiently. Another factor to consider is the quality of the intake water. The operator has to constantly monitor for fluctuations in seawater parameters as these will determine the performance of the membranes. We also stress the importance of an effective pretreatment system which is integral to ensuring the optimal performance of the downstream RO system. A robust pre-treatment system, such as Hyflux’s Kristal® UF pre-treatment membrane system, has been proven for its ability to produce consistent, high quality permeate for the RO process. This will protect the RO membranes from fouling, maintain membrane flux, reduce cleaning frequency, extend their lifespan and minimize plant down-time. In addition, continuous optimisation of posttreatment is required to ensure that the product water meets specifications. In short, a well-designed plant combined with suitable equipment will ensure a desalination process that operates efficiently for maximum recovery to deliver reliable sustainable water supply. PI: How do you see the correlation between Desalination and the Power Industries developing in the future? SO: As desalination is an energy intensive process, one way to reduce capital and operating costs of a seawater desalination plant is to co-locate the desalination plant on or adjacent to a power plant. The general concept behind this is to utilise the cooling water that is discharged from the power generation station as a source of seawater for the desalination plant. As the cooling water discharge is of a higher temperature, it will take less energy to drive the RO process in the desalination plant. We see more of integrated power and water projects in the Middle East and less so in Asia. We are building one such project – incorporating a power plant with our desalination project in Singapore. This landmark project will be a springboard into the IWPP sector particularly in the MENA markets.
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welcome Mr. Felber to the current issue of pi Magazine Asia. Thank you for taking time to speak with us.
Mr. AvSHALoM FELbEr, CEo- IDE TECHNoLogIES
PI: Can you provide us with a brief outline of your operations in the Desalination business throughout Asia? AF: IDE is a world leader in both thermal & membrane desalination solutions and is the largest MED supplier in APAC. Over the past decade, IDE has deployed some of the APAC region’s largest and most advanced desalination plants. With subsidiaries and representative offices in both China and India, IDE is able to meet the requirements of, and provide services and support to, the local markets in this important region. IDE’s proven track record spans 400 plants, 40 countries and 4 decades. The company has installed more than25 units in APAC only, providing a cumulative capacity of ~500,000 m3/day to this key market, and a total capacity of over 2,300,000 m3/ day worldwide. PI: How do you envisage the Desalination market continuing its development in Asia? AF: The desalination market in Asia is expected to grow significantly, realizing its great potential in this key region. The future of desalination in Asia is based upon both thermal and membrane desalination, which will provide high quality affordable water serving the various needs of the industries as well as the ever
growing population. There are very strong driving forces in Asia that are increasing the demand for clean water. These include the growth of the middle class population, modernization, increased consumption levels and industrialization. In many cases desalination provides the only solution for increasing the amount of available clean water. PI: What advances have you had in your technology? AF: IDE has many industry firsts to its credit and is responsible for the following technological breakthroughs: • IDE PROGREENTM - an eco-friendly, innovative, cost-effective and compact Reverse Osmosis (RO) desalination system, eliminating the use of chemicals during the pre-treatment & desalination, via proprietary chemical free filtration and a patented Direct Osmosis Cleaning (DOC) system. • Breakthrough technology in Reverse Osmosis (RO) desalination – IDE is implementing 16 inch membranes in a vertical array of Pressure Vessels (PVs) in a large scale facility – Sorek, Israel - for the first time, enabling increased water output, cost savings, smaller footprint and reduced energy consumption. • Pressure Centre Design –the unique IDE ThreeCenter Design is an arrangement where high pressure pumps, energy recovery devices and China’s largest desalination plant – 100,000 m3/day, Tianjin
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desalination round table India’s largest desalination plant – 160,000 m3/day, Jamnagar
membrane banks operate independently, flexibly and efficiently, resulting in reduced energy consumption and reliable operation. Unique high efficiency thermal distillation technology implemented in the largest desalination plant in China, uses a proprietary IDE process that allows cost effective materials of construction, lowest energy consumption and a fully recyclable process that allows the discharged water to be used as the raw material for the production of table salt. PI: What are the most successful projects you have been involved in recently? Tianjin SDIC - China’s Largest Desalination Plant AF: Tianjin SDIC is a state-of-the-art power plant that leverages IDE’s unique desalination technologies to reduce its dependence on external fresh water resources. The plant uses IDE MultiEffect Distillation(MED) units to create the highly pure water needed in its steam boilers from the region’s plentiful seawater, and powers the units with the waste heat generated by the electricity plant, an advantage that reduces the plant’s desalination costs while improving its environmental profile. So far, IDE has successfully deployed 4MED units with a total capacity of 100,000 m3/day, and has
been chosen to deploy 4additional units, currently under construction (to be completed during 2012), doubling the capacity to 200,000 m3/day. Reliance Industries - India’s Largest Desalination Plant The Reliance Group is India’s largest private sector enterprise, and its petroleum refinery is one of the world’s largest refinery complexes. Reliance has installed 9IDE MED desalination units with a total capacity of ~160,000 m3/day, to provide high-quality feed water for its boilers and drinking water for local residents. Cape Preston, Australia: One of the World’s Largest Membrane Plants In 2008, the giant Cape Preston magnetite iron ore mine, the first of its kind in Western Australia, selected IDE to deploy an advanced Sea Water Reverse Osmosis (SWRO) desalination plant on an Engineering, Procurement and Construction Support Services basis. The plant will supply 140,000 m3 of fresh water per day. PI: When looking at reliability and efficiency of Desalination systems and plants, what are the most important factors an operator should consider? • Proven track record in implementing desalination
plants around the world. • High reliability and availability - smooth operation of desalination plants for over a decade. • Low energy and chemical consumption. • Increased capacity of high quality water. • Reduced cost of desalinated water. • Cost-effective plants - increased efficiency. • Simplified erection and easy operation – reduced operational costs. • Greater operational flexibility. PI: How do you see the correlation between Desalination and the Power Industries developing in the future? AF: The correlation between desalination and the power industries is expected to be high in the future due to several reasons: • Water is essential for the operation of power plants, and power is essential for a smooth desalination process. Hence, co-location of these activities will lead to highly efficient processes. Advanced desalination facilities, such as the Hadera plant, enable water production that varies according to peak and off-peak hours of electricity consumption, thus creating a more optimized and cost-effective solution.
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welcome Mr. Bruzzone to the current issue of pi Magazine Asia. Thank you for taking time to speak with us.
Mr. MArK brUzzoNE, MWH MANAgINg DIrECTor – govErNMENT & INFrASTrUCTUrE, AUSTrALIA & SINgAPorE
PI: Can you provide us with a brief outline of your operations in theDesalination business throughout Asia? MWH Global is a strategic consulting, technical engineering and construction services firm leading the wet infrastructure sector. Desalination services are one of the many things offered by our 7,500 employees in 35 countries. In the Asia-Pacific region, we have provided support to both public and private clients for a variety of desalination projects. Our support for seawater, brackish water, advanced water treatment and recycled water has spanned concept development, planning, pilot testing, design, construction phase services and Owner’s Engineer representation. PI: How do you envisage the Desalination market continuing its development in Asia? The desalination market in Asia can be divided into several applications: • Seawater desalination is pursued to supplement and ‘drought proof ’ coastal cities. • Brackish water desalination is applied for the recycling of industrial process water. • Municipal wastewater recycling and advanced treatment is used for drinking water reservoir augmentation, landscape watering and/or irrigation. Population growth in Asia-Pacific, combined with climate change and continuing climate variability, will keep desalination at the forefront as an option for meeting water demands, but the
shape it will take will vary from place to place. In places where the majority of the population live on the coast seawater desalination will be a viable option. Across the board effluent reuse will be seen as a more important part of integrated water cycle management solutions. A new and continuing challenge will be the management of associated water from the gas and mining industry, which is becoming a major part of the water sector in Australia. Another trend we have identified is in the future more desalination technology will be developed, designed and constructed by local Asian companies. PI: What advances have you had in your technology? As a technical services firm known for innovation we have assisted clients in the enhancement and development of new desalination processes through our Research Department based in the United States, as well as through the scientific and engineering expertise at our local Asia-Pacific offices. Our applied research capabilities, bench-top laboratory studies and pilot plant field trials help us apply and develop water technologies, including desalination for our client’s projects. In addition, MWH provides technical and economic feasibility studies for the application of desalination processes. MWH is not a technology provider, however, our technologists have excellent knowledge of the latest technology in the market. We remain independent and offer unbiased advice on technology selection on a best-for-client, project-to-project basis. We conduct independent assessment, including literature review, as well as laboratory and pilot trials to form the basis of technology selection.
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desalination round table
PI: What are the most successful projects you have been involved in recently? For seawater desalination, MWH is providing technical advice as an owner’s representative for a government agency. This includes design review, construction surveillanceand plant commissioning monitoring. We are also serving as technical advisor to the new private owner of a seawater desalination plant acquired through a privatisation process, with services including technical due diligence, payment claim review, defects rectification managementand audits of operation and maintenance progress. MWH has helped a gas company test and select a treatment process to enhance the performance of desalination and minerals recovery technologies applied to associated or produced water for beneficial use of the water and minerals. We can conduct testing of desalination processes at the laboratory scale, pilot plant size and demonstration plant capacities, which provide real world results for innovative technologies or standard processes pushedto the edges of their technological envelope. In addition, MWH has provided planning and detailed design services for full-scale desalination plants in the recycling, brackish/produced water, and seawater desalination sectors. PI: When looking at reliability and efficiency of Desalination systems and plants, what are the most important factors an operator should consider? The most important factors an operator should consider related to reliability and efficiency of desalination systems are: • Having a robust design based on an adequate historical water quality data, pilot testing and a
failure mode and criticality analyses. • Ensuring that plans and specifications are followed during construction. • Energy minimisation of the desalination plant using proven, reliable and robust energy recovery technology. • Skilled labour force that is familiar with and technically capable of properly operating and maintaining all the processes and equipment in the desalination plant. In addition, the retention and on-going training of these skilled individuals is also paramount for continued successful operation of the desalination plant. • Selection and use of proper materials that meet the durability, longevity and corrosion resistance requirements for the equipment use. • Understanding the source water (feedwater) quality and designing an effective and robust pretreatment system that will prepare the water for the desalination step; this is particularly important for membrane based desalination processes. We often get fixated on the desalination technology,however, both thermal and reverse osmosis processes are now quite mature and the ongoing improvements are generally incremental and primarily around greater efficiencies. Often it is the ancillary systems that provide the greater challenges, such as the intake and outfall and potential changes to feed water quality, seawater pre-treatment and desalination water potablisation systems. Durability and quality control of materials have been issues for some plants and selection of the wrong materials or poor manufacture can lead to significant problems with corrosion, resulting in plant down-time and costly rectification. It’s important to be aware of the potential for these
issues from the outset of a project to avoid them down the track. PI: How do you see the correlation between Desalination and the Power Industries developing in the future? As is often discussed energy and water are closely linked with the management, pumping and treatment of water and wastewater requiring significant amounts of energy. This is especially true for desalination techniques since they have higher energy consumption than most non-desalination processes. Technologies for reducing the energy consumption within a desalination plant have advanced and lowered the overall energy usage of the plant by recovering and reusing energy that was once wasted in the process. This energy recovery, along with smart designs for the ancillary works has made, and will continue to make, desalination a more affordable water supply solution. Planning desalination plants together with power stations and integrating the coordination of the power supply with the desalination plant’s power demand, should be further explored for optimisation and increased efficiency of the combined system. Additionally, since desalination plants are relatively large energy users there is the need for these projects to be linked with renewable power sources These include such alternatives as wind turbine farms which off-set energy demands and carbon emissions. There are also opportunities to use desalination plants to help dampen the daily peaks and troughs in electricity usage by establishing a base load power demand. This base load consumption may provide operating efficiencies and cost savings for the power provider.
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desalination round table welcome Mr. sonawaneto the current issue of pi Magazine Asia. Thank you for taking time to speak with us.
Mr. rAHUL SoNAWANE, XyLEM’S gENErAL MANAgEr For TrEATMENT
Can you provide us with a brief outline of your operations in the Desalination business throughout Asia? Xylem touches every part of the water cycle and our products & systems for the desalination market include: • Custom-engineered Reverse Osmosis (RO), Nanofiltration (NF) and Ultra Filtration membrane technologies including standard systems, products and components to produce high-purity or potable water from brackish or seawater sources. • Pretreatment prior to desalination of seawater using dissolved air flotation in conjunction with media filtration systems in combination or standalone to remove contaminants that clog membranes. • Ozone systems for oxidation of raw water contaminants (e.g., taste, odor, and color-causing compounds) to enhance the overall desalination treatment process. • UV systems between filtration steps prolong service life of membranes by reducing bio-fouling. How do you envisage the Desalination market continuing its development in Asia? Desalination market in Asia is expected to grow at 7% and in that China and India are expected to grow at CAGR of 18%* and 22%# respectively. The membrane based desalination plant would constitute almost 85% of the new desalination capacity addition and that augurs well for the Xylem as component supplier and system integrator. Source: *“China Water desalination Plants Market Forecast & opportunities, 2017”. #“indian Water desalination Plants Market Forecast & opportunities, 2017”.
What advances have you had in your technology? Xylem has developed two desalination pretreatment system technologies - Leopold ® Clar-DAF® dissolved air flotation and Leopold ® FilterWorxTM rapid gravity granular media filter systems , that can be used in individually or in combination to provide the cleanest influent to feed the RO. Not only can Leopold® desalination pre-treatment systems remove TSS, free oil, colour and organics but Leopold® offers the only system that can remove harmful algae blooms(HABs/red tide). Further we are bringing our Clari-DAF® pilot plant in India to showcase the recent pretreatment technology development for the rough seawater that is present on the east and west coast of India. What are the most successful projects you have been involved in recently? After successful construction of the SWRO Desalination Plant at Jebel Ali Station G in 2008 for DEWA, Xylem has completed in 2010 one of the world’s largest ClariDAF®systems for the Shuwaikh SWRO Desalination Plant which provides the robust pretreatment to the SWRO ensuring the near optimum operation even during the red tide condition. Xylem is on course to complete another Clari-DAF®pretreatment system for Ghalilah SWRO Desalination Plant at Ras Al Khaimah, UAE by 2013. When looking at reliability and efficiency of Desalination systems and plants, what are the most important factors an operator should consider? “Most SWRO Desalination system failures are actually pretreatment failures and that most pretreatment failures are biofouling related”, (WDR Vol. 46No. 32). This is why to have a reliable, efficient and maximum availability of the desalination systems proper selection and design of the pretreatment system becomes the most important factors an operator should consider. Xylem Inc.’s Leopold® desalination pretreatment systems are in place and operating RO plants located in Middle East and Australia treating raw water supplies with SDI of 8 to 10, with excursions as high as 15. The effluent SDI out of the pretreatment is consistently below 3. How do you see the correlation between Desalination and the Power Industries developing in the future? Power Industries has played a critical role in development of the Mega Desalination Projects either as independent water Project (IWP) or integrated Water and Power Project (IWPP) and bringing down the cost of the desalinated water. However there is further scope in the improvement of the optimization of the energy in the Power Plant and Desalination Plant to achieve the lowest cost of per m3 of desalinated water. Co-location, Integrated Hybrid Desalination process are some of the methods where power industries will help desalination industry to achieve this.
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indonesia electrification
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electrifying a nation A Look into the indonesiAn Power MArket with the secretAry GenerAL of the Ministry of enerGy And MinerAL resources, Mr. wAryono kArno
I
ndonesia faces several challenges with electrification. This rapidly developing economy has a challenging geographical layout, with a scattered population. This means that Indonesia has to heavily develop key infrastructure for gas pipelines, transmission networks and other key utilities to cater for the countries fast growth. Pi Magazine Asia asked Waryono Karno, the Secretary General for the Indonesian Ministry of Energy and Mineral Resources, to give our readers an insight into the current state and future outlook of the power sector for Indonesia, and how Indonesia’s unique geography is having an impact on technology. Mr. Karno started by giving us an overview of the power sector in Indonesia. Up to early September 2012, the total capacity of power generation in Indonesia reached 43,507 MW. Of this capacity, PLN has contributed 31,933 MW, IPP’s have generated 9,845 MW, and PPU’s have contributed 1,729 MW. The total transmission line length is about 37,301 kmc and distribution line length is about 679,424 kmc. The transmission system that have been already interconnected and matured is in the Java-Bali and Sumatra systems. As of July 2012, energy mix for power generation consists of coal at 51%; Gas at 21%; Oil at 16%; Hydro at 7%; Geothermal at 5%; and Bio diesel & other new renewable energy at 0.1%. Indonesia’s electrification ratio is still relatively low. At the end of 2011 it was about 72.95%, missing the Government’s target of 80% by 2014. Additionally, electricity demand in Indonesia is still growing at approximately 9% per year. Therefore the Government has big challenges to prepare and develop power infrastructure for the future, not only to fulfill the electricity demand but also to increase electricification ratio. Based on PLN’s Electricity Business Plan (RUPTL) 2011-2020 that has already been stipulated by the Minister of Energy and Mineral Resources, the additional capacity of power generation that will be developed up to 2020 is about 55 GW, the transmission lines will be about 49,162 kmc, and the distribution lines are 434,011 kmc. Mr. Karno also highlighted that Indonesia is a great place to be investing in. The last year has seen many big developments, with PLN undertaking a mandatory coal FTP, IPP’s gaining presence, huge incentive and focus for the growth of geothermal and CNG development. In order to accelerate the diversification of energy for power generation to non-fuel and also to meet the needs of electricity, the Government had assigned PLN to implement 10,000 MW Fast Track Program Phase I (FTP I) in 2006. This is where all the projects utilized primary energy sources of coal. Even though these projects have met some obstacles in their implementation stages, some projects are already in the operation stages. As of September 2012, the total capacity already in commercial operation is 4,450 MW, or 45% from the total of capacity of FTP I. We expect that by the end of 2012 the total of capacity could reach 6,338 MW. And step by step, all the projects will be completed by 2014. The progress of FTP II is not as advanced as FTP I, as it was only
launched in 2010. Only 5 projects with the total of capacity about of 1,354 MW are under preconstruction and construction stages, namely HEPP Upper Cisokan PS 4x260 MW, HEPP Asahan 3 (2x87 MW), CFPP Parit Baru 2x50 MW, CFPP Ketapang 2x10 MW, and CFPP Bau-Bau 2x10 MW) and the COD plan is in 2013-2017. Despite this unsatisfactory progress, Mr. Karno believes that all projectes will be completed. FTP II will not only focus on developing coal or gas fired power plants but also on encouraging the utilization of renewable energy, such as geothermal and hydro. In order to boost the utilization of geothermal, The Ministry of Energy and Mineral Resources announced a “feedin-tariff ” and regulations, namely the assignment to PLN to purchase electricity from geothermal and the ceiling price of geothermal. Through this ministerial regulation, the electricity purchase price from geothermal may be stipulated differently from Island to Island depending on the availibility of resources. The price range is USD 10 – 18.5 cent/kwh. Mr. Karno believes that with this new feed-intariff, the development of geothermal will grow rapidly. The Ministry of Energy and Mineral Resources now are preparing a feed-in-tariff for other renewable energies. The Indonesian government will also encourage PLN to reduce their consumption of oil for power generation, not only by utilizing renewable energy but also by developing CNG/LNG, especially in eastern region of Indonesia (Sulawesi to Papua). Indonesia consists of more than 17,000 large and small islands, with a population of more than 230 million scattered across the country. It is a big challenge for the Government to provide electricity to all the islands and people. Mr. Karno also addressed the issue of finding electricity solutions for the geographically remote regions, such as Kalimantan, Sulawesi, Maluku and Papua. In order to increase the electrification ratio level as well as rural electricification ratio, especially in the eastern part of Indonesia, the Ministry of Energy and Mineral Resources always allocate
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some of the budget through the state budget/ APBN to develop power infrastructure, which is implemented by PLN every year. The focus on infrastructure developments under this APBN is to increase the electricification ratio in provinces by at least 60%. If the electricification ratio level of provinces is less than 60%, that province’s power infrastructure should be developed more than those that obtain the electrification ratio above of 60%. So, the budget allocation for such the province like that will increase. Karno hopes that through this scheme, the electricity needs of the eastern part of Indonesia will be fulfilled as well as increasing the rural electricification ratio. Besides that, Indonesia will also encourage PLN to develop the interconnection system in Kalimantan and Sulawesi and investigate the possibility in others islands. As well as increasing the electrification of rural areas, it is also essential for Indonesia to ensure reliable supply to mission critical applications. In order to fulfill the electricity needs for entities such as hospitals, municipal water, telecommunications and data centres, reliable back up power generation is vital and should be considered by all management of these facilities. The Ministry of Energy and Mineral Resources and all stakeholders have a plan to develop power infrastructure rapidly in the future. Mr. Karno also spoke about Indonesia’s domestic use and global export of LNG. Gas is steadily seeing an increase in use across Asia, and Indonesia is one of the world’s largest exporters of LNG, but is facing challenges to increase the domestic use of LNG. The main problems faced by Indonesia is the location of gas fields, which are in remote areas far from the demand. Additionally, domestic demand has increased, making the development of gas infrastructure an absolute necessity
In order to fulfill the domestic gas demand, the Ministry of Energy and Mineral Resources will build LNG storage facilities in Arun, Lhokseumawe, South Sumatera, and Central Java. The MEMR will also soon complete the installation of gas pipelines from Arun to Belawan, Semarang to Cirebon, and Semarang to Gresik. Because of this, the backbone of the Sumatera – Java will be interconnected. With this infrastructure established, gas from Natuna block, Kalimantan, Papua, Masela, and Sulawesi will be distributed to industries and power plants in Java and Sumatra. Indonesia will also play a key role in strengthening the solidarity of the ASEAN community. Indonesia has plenty to contribute, being the largest in size, having the most abundant natural and human resources, and a large energy potency. Recently, the Minister of Energy and Mineral Resources of Indonesia led an Indonesian Delegation to participate in the 30th ASEAN Minister on Energy Meeting (AMEM) and it’s Associated Meetings, held at Phnom Penh on 10 - 13 September 2012. Indonesia is supporting the ASEAN Economic Community as an energy cooperation, with an APAEC 2010 - 2015 (ASEAN Plan of Action on Energy Cooperation). Mr. Karno names two major flagship projects that are under high priority in ASEAN concerns; the APG (ASEAN Power Grid) and TAGP (Trans ASEAN Gas Pipeline). The APG is a power electricity interconnection among ASEAN member countries, and TAGP is a gas pipeline interconnection. There are 2 APG projects bilaterally connected with the Indonesia region, and they are in Peninsular Malaysia - Sumatera Interconnection which is planned COD on 2017, and in West Kalimantan - Sarawak Interconnection which is planned COD on 2015. There are also 3 projects of TAGP bilaterally
connected with Indonesia region, they are West Natuna - Duyong, West Natuna - Singapore, and South Sumatera - Singapore. Whilst the energy cooperation among ASEAN member countries under APAEC are advancing and expanding, internally Indonesia also has a domestic market obligation of national significance, which is ensuring energy resilience for the Indonesian people. The Government of Indonesia welcome foreign and domestic investors to build energy resilience and security. Mr. Karno also noted a few other energy policies new to Indonesia. In order to follow up the implementation of Law No. 30 Year 2009 on Electricity, the Government has stipulated 3 Government Regulations on Electricity Supply Business Activity, Sale Purchase of Electricity Across the State, and on Electricity Supporting Service Business. All of these regulations will provide a legal framework for private businesses in the power sector. In terms of the electricity selling price, particularly for power generation that utilizes renewable energy (such as hydro as well as biomass), and excess power, the government also has already issued the Ministerial Regulation on Electricity Purchase Price by PLN for Small and Medium Scale Power Generation that utilize Renewable Energy, and Excess Power. All in all, Mr. Karno has highlighted that it is essential for Indonesia to develop its power infrastructure. This is because of the growth in electricity demand coupled with the challenges in getting the electricity from fuel source, to power station, and finally into peoples homes. This need is reflected in the Indonesian government’s plans to increase electricity generation in tandem with advances in the country’s infrastructure, but what remains evident is the huge role that distributed generation has to play in a nations growth.
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Cummins interview
Cummins Gensets Play a CritiCal role for indonesia’s Power seCtors PI: Welcome Mr Hairuddin Halim, Director, Product Sales and Marketing, PT Altrak to the September-October Issue of Pi Magazine Asia. Thank you for taking the time to talk with us. Can you tell us about your operations across the Indonesian power sector at the moment? HH: PT Altrak was incorporated in 1978 and is the sole authorised distributor for Cummins products in Indonesia. We have vast experience in distributing heavy equipment products, such as Cummins generator sets, which range from low kVA (43kVA) to high kVA (2500 kVA and above). Cummins Power Generation gensets are used in almost every market segment in Indonesia which includes Mining (Refinery/Processing), Infrastructure, Plantation, Healthcare, Independent Power Producer (IPP), Telecommunications and Manufacturing industries.
PI: Indonesia boasts an impressive mining industry that really is booming at present, but many sites are located in extremely remote locations, with no chance of grid connection. What is the value package that you offer for this segment? HH: The mining industry in Indonesia, especially for coal, places a high standard and expectation on product reliability and after sales support. As a global leader with more than 90 years of experience, Cummins is dedicated to increasing the reliability and availability of electric power with a responsive service and support network.To sustain a continuous operation at your mining site, it is crucial to have reliable power support to minimize downtime. Cummins QuickServeÂŽ offers our customers an entire service network geared to providing fast reliable service with quality parts. We have
the state-of-the-art repair tools, and electronic hardware and software with technicians trained on the latest advances in engine design, diagnostics and repair techniques.As the operations of your business depend on the gensets, our technicians are dispatched to site promptly for each service call. Our technicians utilize the Cummins software diagnostic tools and factory recommended processes to perform thorough checks to determine the root cause of the problem and resolve it in a timely manner. There have been cases where we have supported our customers by replacing a failed engine with a spare engine from our warehouse. We are committed to supporting our customers and ensuring minimum interruption to their operation.
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PI: What is the key differentiator for Cummins as compared to the other players in the market? HH: The key differentiator is that Cummins engines are used in a whole host of heavy equipment operated in the mining industry, so many customers know exactly the quality of our engines and gensets. Furthermore, we also have a full team of service technicians available on site and a parts warehouse to exchange failed components when necessary. As the world leader in pre-integrated power systems which comprises of generator sets, Power CommandÂŽ controls, automatic transfer switches, switchgear, digital paralleling and networking, Cummins Power Generation is able to provide complete power system accountability. We bring application know-how, design engineering and service capabilities to the forefront of our offering, delivering value beyond equipment features and benefits by delivering fail-safe performance with a system engineered to work flawlessly every time. This is because complete power systems from Cummins reach system stabilization faster than multi-vendor systems. PT. Altrak offers a broad range of services which includes comprehensive installation and commissioning services, testing and validation, as well as responsive and inclusive service capabilities. We provide continuous local service support to protect key operations from costly or life-threatening power outages. PI: What successes and references have you recently had in the mining industry? HH: Many big operators have used Cummins Power Generation products to sustain their mining plants. This includes powering the motor that drives the conveyor belts, lighting in the office, stock pile
Sultan Iskandar power plant, Pasir Gudang, Johor
and port terminals. Recently, we have supplied another 3 units of C2250D5 2000kVA prime rated gensets to PT. Tapin Coal for their project in Indonesia. The primary reason why Cummins was chosen, is the proven consistency of performance demonstrated by our gensets in the harsh environment, frequently found across Indonesian mining sites. PI: Besides the successes in the mining segment, what are the other segments that Cummins is focused on? HH: We are very focused in IPP-rental companies as Cummins has a large population of gensets for this market. The IPP operators also choose Cummins gensets because of the high value they fetch on the resale market. This high price is due to the continued excellent performance of the gensets when correctly maintained. We are also focused in the plantation market,
as Indonesia is the largest crude palm oil (CPO) producer in the world. As most of the gensets in the palm oil mills/refineries and rubber processing facilities run for long hours, our customers require gensets that are tough and reliable. As Indonesia displays rapid growth and the development of many provincial cities, the property segment also becomes an important market. We see many more high rise buildings, gigantic shopping malls, famous hotels, new modern hospitals being built not only in Jakarta, but in many provincial cities such as Surabaya and Bandung. Most of the gensets installed in this market are used for standby purposes to backup the building loads when utility supply is interrupted. Our customers in this market require not only a single reliable genset but a fully integrated power system including gensets, paralleling (synchronising) switchgear, transfer switches and communications capability to integrate the power system with their sophisticated Building Management System (BMS). Facility managers require real time information on the power system via operator interfaces or SMS alerts during utility interruption or emergency mode. Upon the return of the utility supply, facility managers require the standby power system to transfer the building loads back to the utility supply without any interruption to the facility loads. Cummins gensets utilize a digital paralleling system specifically designed by Cummins to achieve fast synchronization with the utility feeder and allows control ramping of the building loads back to the utility supply safely. PI: Yes it’s true that many Indonesian cities are seeing a rapid growth, and building management systems are important in energy efficiency. In addition to this, infrastructure requirements are heavy, and there are also many mission critical applications that need absolute reliability. Are these focuses for Cummins also? HH: We are seeing many development projects in the Infrastructure sectors. In this market, our gensets are applied to support critical loads with special characteristics such as cranes with regenerative load characteristics. Similarly, many manufacturing plants, for example glass factories also have equipment with specific load characteristics, and we have engineered the power system capable of supporting these loads. Cummins gensets offer one of the best transient response performances to load acceptance and load rejection. power insider september/october 2012 65
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Cummins interview Cummins also has a special focus in critical protection segment namely in data centers and hospitals. This is a segment where power availability is critical and a loss of power supply will result in significant loss of revenue, severe interruption to the business, or possibly even loss of life if hospital procedures interrupted. Apart from reliability, our customers in this market also require a power system that is able to support the specific loads such as medical imaging equipment in the hospitals, and UPS and servers in the data centers. These loads are known for their high harmonics distortion. Cummins gensets have the capability to perform well and support these loads during any emergency situation. PI: Many key players in industries such as chemical, textile and food processing have heavy steam usage and hot water usage, and are keen to have a reduction in OPEX.What services can you offer to a potential client looking to explore their options with the installation of cogeneration? HH: Co-generation appears to be popular amongst the big industries where the customer can achieve benefits by recovering the heat generated from the gensets and channel that heat back into their operations or processes. We encourage customers who run their gensets continuously to explore this application, as the heat recovery will be most efficient when the gensets run at a constant load for a prolonged period of time. Some customers have a preference to use gas gensets for co-generation application as they know it is very expensive to run
a diesel genset continuously due to the high fuel price. However, lack of gas pipe line infrastructure, accessibilities and gas supply quality in Indonesia pose some challenges to our customers who are keen to explore co-generation application. PI: You have an extensive portfolio of generator sets ranging from 10KW – 2.5MW across gas and diesel. What new products can we expect to see available on the Indonesian market place in the near future? HH: You can expect Cummins Power Generation to continue to develop bigger generator sets with better performance at a smaller footprint for the Indonesian market. We expect power requirements to increase across all markets and the availability for a larger power node is definitely a plus. We are also running some development projects on our existing range of gensets to have better connectivity to make it easier for our customer to monitor the performance of gensets installed in a remote area. PI: How do you envisage the Indonesian energy mix shaping up as we head towards 2020? HH: The government is already planning to expand the use of cleaner fuels such as natural gas
and renewable energy. Conversion to natural gas for industrial uses is expanding in Indonesia but there are some areas where gas supplies remain underdeveloped. We expect this to change when the government provides better incentives for efficient use of energy and optimize the energy mix in Indonesia. Diesel gensets will continue to be an important power source to critical facilities where interruption of power supply is unacceptable, as an emergency standby where the primary electricity supply is taken from the utility and as the prime source where there is no connection to the utility grid. Gas gensets will be increasingly utilised in areas where gas supply is constantly available. 3 units of Cummins C1400 D5 generator sets installed to power a coal mine in Indonesia
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CO2577
FROM EAST TO WEST, STAY CONNECTED
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• Applications including generators, heavy machinery, water pumps and cellular networks
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www.comap.cz 11/10/2012 22:55 10:38 24/10/2012
asia thermal power
Minding AsiA’s TherMAl Power PlAnTs PT Bumi ResouRces ouTlook
A
s the energy industries demand for coal continues to soar, one country has been pivotal to the supply chain across Asia. With abundant resources and enviable access to costal terminals for overseas dispatch, Indonesia has been a key supplier for major utility thermal power projects in China and India. Indonesia has coal reserves of 21 billion tonnes, accounting for around 3 pct of the world total, which is fairly moderate, in comparison to some of the vast resources in China, Australia and India. Despite this figure, Indonesia is the world’s biggest thermal coal exporter, seeing an incredible boom in coal production in the past decade, and output is forecast by the industry to reach 390 million tonnes this year. This is something that could potentially change in the near future as the government look to secure domestic demand for the long term, by implementing duties on its exports of the raw commodity. The countries largest coal miner is PT. Bumi Resources, a prominent player with operations across Indonesia. The company is a centre piece for the powerful Bakrie Group, and in September of this year reserves were estimated to be 2.6
billion tonnes, a phenomenal increase of 85% from 1.1 billion tonnes in Sep 2005. Last year just over 66m tonnes of coal was mined. The coal mining activities of PT. Bumi Resources are split into 3 major business units, PT Kaltim Prima Coal, PT Arutmin Indonesia & PT Pendopo Energi Batubara. pT KalTim prima Coal KPC own mining concessions of approximately 90,938 hectares in East Kalimantan. Their deposits are divided into two blocks called Sangatta and Bengalon, separated by the Bengalon River in the centre of KPC’s lease. KPC extensive operations include a series of open pits, where mining is by conventional truck and shovel where between six and twelve open pits are in operation at any one time. There are extensive preparation facilities where coal is crushed in five crushers with a total capacity of 6200 tonnes per hour (tph). All are set to crush coal to a top size of 50 mm. Dirty coal is processed through a washing plant which produces 1 Mtpa of Prima product. Overburden and coal are removed in sequence
according to a detailed mine plan designed to ensure final product quality parameters are met. An average of 9.0 bank cubic metres (bcm) of overburden is removed for each tonne of coal mined. Overburden is generally dumped in mined out areas or out of pit prior to rehabilitation and reforestation. At present there are 9 open pits in operation, 4 of which are operated by KPC and 5 by mining contractors. For the Sangatta mine, tra nsportation takes place over a phenomenal 13.2 km journey to the coast. The OLC is a single stage, covered overland belt conveyor with a rate of 4200 tph. The coal’s travel to the coast takes about 26 minutes, passing over ridges and stretches of low lying ground. The OLC is protected by 140 drift switches and a continuous leveling & alignment process ensuring that the conveyor operates at maximum efficiency. Tanjung Bara Coal Terminal, a world class marine terminal, capable of handling bulk carriers of up to 220,000 DWT, awaits at the end of the OLC. The Sangatta mines produce bituminous and sub-bituminous coal, where certified measured reserves come in at 2,447(Mt) and proven marketable reserves exceed 564 (Mt). Lead contractors on the site include KPC, Thiess and PAMA. The other major coal source for KPC is the Bengalon Mine. This holds reserves of bituminous coal, where certified measured resources are approximately 560 (Mt). PT Darma Henwa is the main contractor, and the mine is also close to the coast, being linked to port facilities by a 22km haul road. The close proximity of all the mines to the ports provides KPC with a distinct advantage of low mine to port transportation costs, adding another competitive edge to their operations. KPC have the sole and exclusive rights in connection with the exploration and exploitation of coal deposits in the assigned concession areas in Kalimantan and there is large potential for reserves expansion; KPC only partially explored open cut mining with captive coal processing facilities. With the dedicated infrastructure such as the coal loading terminals, port facilities and conveyors in place, in addition to the segmented coal and non coal businesses, BUMI are going to concentrate on increasing thermal coal dominance
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in the operatons. The majority of coal produced at the KPC sites finds it’s way to the boilers of Asia’s biggest utilities including: • Huaneng power international • Taiwan power Company • pT. pln • Chubu electric power • Clp • J-power • TnB • dayou pT aruTmin indonesia PT Arutmin Indonesia is the second major coal mining subsidiary of PT. Bumi Resources. They operate in a 70,153 hectare concession area of Kalimantan Block 6, covering narrow strips of land in the southeast of Kalimantan and the Northern tip of neighbouring island Pulau Laut. Arutmin operates 5 open cut coal mines: Senakin, Satui, Mulia, Batulicin, and Asamasam, all strategicially located near Arutmin’s port facility – North Pulau Laut Coal Terminal (NPLCT) in the north shore of Pulau Laut, with handling capacity of 4500tbh. Major mining contractors include Thiess, CK & Dama Henwa. The Senakin mine produces bituminous coal. Senakin coal is crushed and apart from a small portion washed to lower the ash content and heighten marketability. Satui mine also produces bituminous coal that require crushing but does not require washing due to its low ash content. Mulia and Asam Asam mine produce eco-coals which mainly used as fuel for domestic and foreign steam-energy power stations. Those mines produce sub-bituminous coal with extremely low ash and sulphur contents and therefore are environmentally friendly.
Batulicin mine consists of Ata, Mereh, Saring and Mangkalapi deposits. Ata coal is characterized by low ash, high sulphur, high CV, while the coal from Mereh and Saring coal is characterized by high ash, low sulphur and low calorific value. Mereh coal is crushed and apart from a small portion washed to lower the ash content and heighten marketability. In 2011 Arutmin’s total coal mined reached 24.7 million tonnes, which increased significantly by 18.5% in comparison to the 20.4 million tonnes in 2010. Major destinations for Arutmin’s coal include Japan, China & Korea to customers such as: • Kospo • China Qinfa Group • Tohoku electric power • pT. pln • nippon steel Corporation • nippon paper Group • Yuehe asian Coal ouTlooK 2011 was a year of realignment. The late 2010 spinoff of non-coal properties into Bumi Resources Minerals awakened management resolve and assembled the necessary focus to build these potentials into productive properties. PT Bumi Resources Tbk have made a remarkable impact on power markets in Asia and with plans and people in place, the priorities of each coal mine are fully in line with reaching new production targets and building relationships with new customers Demand for thermal coal increased heavily throughout 2011, with a heavier demand increase in the first part of the year and prices falling slightly in the end period. There still remains an overall feeling of economic uncertainty in regards to the debt crisis in Europe and the slow growth with the economy of USA. Coal prices emerged from a low point of US$
75 midcrisis in 2008, to reach US$ 90 at the year end 2011. Through a rollercoaster year of prices PT. Bumi Resources have maintained a favourable pricing through dynamic spot modelling and confirmed sales mostly in long or medium term contracts. Given this pricing uncertainty, it remains important for the company to uphold operations as a low cost producer but forecasted government tax export increases are bound to have an effect. Within this environment, PT Bumi Resources is striving to remain a leading exporter of seaborne thermal coal, especially with such strong demand from key export markets in China, India and key East Asian countries. The ideal location of Bumi serves as a real focal point in meeting targets as much of world’s increasing coal demand is centred within a relatively small shipping radius. In 2011, China was the world’s top importer of thermal coal, but Indonesia is rapidly increasing it’s demand. Domestic coal consumption grew quickly from the late 1990’s to the late 2000’s and with more coal fired power plants expected on line in 2013, demand is expected to increase approximately 65-70 million tonnes per annum. Domestic coal production has readily met local demand until, but consideration of fuel security for the future has to be made. A government regulation for Domestic Supply Commitment will be met by miners all over Indonesia in a way that will hopefully provide predictability for everyone in the coal production and heavy consumption industries PT. Bumi Resources are ramping up production with an aim for 100 million tons production per year by 2014. As part of this industry-leading thermal coal growth strategy, Bumi will access the fastest growing thermal coal markets which happen to be in East Asia, in China and India especially. With a general positive outlook for global thermal coal prices, PT. Bumi Resources are going to be pivotal in keeping power stations firing in Asia. power insider September/october 2012 69
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COMAP CASE STUDY
ADVANCED GENERATOR MANAGEMENT FROM COMAP E
uropean electronics specialists ComAp, who are known globally for their range of Generator and engine controllers, offers a unique cloud based remote monitoring service . TYPICAL COMAP CONTROLLER The Websupervisor cloud based system allows the user to minimise the operating costs associated with running remote assets. Downtime is reduced and faults are quickly recognised and in some cases rectified remotely. Fuel theft problems can be identified and addressed. Customers using the system report that up to 50% of monitored faults can be resolved remotely. Where this is not possible site visits can be arranged before the energy consumer even is aware of the problem. Customer satisfaction is measurably increased as a result of actions based on the information being provided by the Websupervisor. The WebSupervisor system allows equipment fitted with various types ComAp controllers to be monitored and controlled via the internet from a remote PC or other web enabled device such as smart-phone, iPhone, Ipad, webbook,etc.
The advanced cloud based system tackles many of the problems associated with monitoring the status of a large number of assets in the field, by centralising the data onto a secure central server which can then be accessed by the client locally. The operator simply browses to the WebSupervisor webpage and enters their username and password. Once authorised it is then possible to view the remote assets registered to that account. WebSupervisor is not just a single web page however, it is a system comprising many elements all working together to overcome the issues normally associated with remote monitoring systems. WEBSUPERVISOR – ACTIVE MAP VIEW In addition to being able to view the status of the fleet and respond instantly to any changes from optimum, the system can also issue email status updates should the operator need it. “In the modern competitive world, fleet operators are looking to save operating costs anyway they can. WebSupervisor helps them meet this goal by co-ordinating service teams with real time requirements” said Product Manager Mirek Novotny, of ComAp. Clients using the service have the ability to add or remove individual users and remote equipment
assets to their accounts and control the rights of each user. This means that remote support teams can view the fleet in their area and co-ordinate activities locally without needing local infrastructure connected to the remote assets, or complex connections to head office, just a PC with web access. “User access management is an important feature when operating a fleet monitoring system such as WebSupervisor, so we have developed our system to make this as simple as possible” Said Jarda Palan, one of the design team behind the WebSupervisor development. WEBSUPERVISOR – USER LOGIN PAGE An additional feature of the system is a full range of reporting options, which allow detailed reports to be created for the individual fleet assets. Such reports can be used for maintenance management or even client billing. The system even has capability for energy production reporting for Co-generation plants so that efficiency and availability can be monitored. Asset utilisation and energy production can be easily measured and recorded. WebSupervisor also has the option of controlling multiple embedded generators when they are installed into a ‘Smartgrid’ or similar short term operating reserve (STOR), used by the electricity utility providers to meet peak grid demands. A simple system allows the operator to remotely select which of his embedded generators are part of the scheme, and then start them as requested by the utility company within the required time limits. The system provides regular updates via the internet cloud and web browser software. Graphic representation of the location of the assets provides at a glance peace of mind. Individual equipment can be further interrogated to find operating parameters, alarms and general status. WEBSUPERVISOR – ASSET OVERVIEW Important historical data is also maintained allowing detailed operating logs to be created and local trends to be monitored. The WebSupervisor system operates with a range of standard controllers provided by ComAp. For generator applications, InteliLite NT, InteliCompact NT, provide solutions for single machines, standby generators, or for simple parallel applications such as multiple parallel rental sets on one site, or parallel to mains operations. InteliGen NT and the flagship InteliSys NT products are suited to more demanding applications such as complex multi set / multi mains parallel systems or co-generation plants. For engine drive applications where fleets of
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pumps, or compressor are required to be monitored, then InteliDrive Lite and InteliDrive DCU Industrial provide powerful solutions. WEBSUPERVISOR – DETAILED ASSET VIEW The ComAp controllers fitted with a suitable internet connection report to the central server, allowing large number of sets to be connected without requiring dedicated phone lines. The internet connection to the remote asset can be either traditional Ethernet or mobile GPRS connection as required by the application. PLUG-IN GPRS MODULE FOR COMAP CONTROLLERS The ComAp controls incorporate the powerful AirGate connection technology to make access to the internet as simple as possible. AirGate technology was designed to overcome the issues commonly faced when trying to connect remote equipment using internet based communications.. “AirGate is amazing technology developed by ComAp, it allows our controllers to connect to the internet using the existing network infrastructure, capable negotiating firewalls and VPN systems and removing the requirement for static IP addresses. Once the AirGate technology in the controller is activated even if the IP address changes, WebSupervisor will keep track of the remote equipment.” Said Miles Revell, the Sales Director at ComAp. WebSupervisor is specifically of benefit to operators of large remote fleets of equipment, such as Cellular Telecoms generator sets, remote power systems, rental generators, pumps and compressors. Owners or operators of CHP’s or embedded power generation systems. Plant equipment service providers or just standby sets wanting a simple ,yet powerful monitoring solution. The system also is supplemented by an Iphone App and Android App which allows personnel to follow the status of the fleet from their pocket phone all the time, without needing access to a PC. The system also supports ComAp’s LOCATE technology which works with the GPRS module to provide location information on the equipment. LOCATE will show the client the current location or track history of the equipment and even works indoors, meaning that equipment can be monitored and recovered quickly should theft occur. Further information on WebSupervisor can be found at www.comap.cz. Or contact Marketing@comap.cz
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tenaga nasional berhad interVieW
A NEW AGE FOR TNB DATO’ IR AZMAN BIN MOHD, cEO TENAGA NASIONAl BERHAD
PI: Welcome Dato’ Ir Azman Bin Mohd to the current issue of Pi Magazine Asia, we are honoured to have your presence, thank you for taking the time. It has been an exciting year for you, with much new responsibility. can you tell us some highlights over the last year for TNB? DAB: Thank you for giving me the opportunity to be featured in this issue of P1 Magazine Asia. Some of the prominent highlights over the last year includes: Gas Compensation under Government decision on cost sharing mechanism, Tariff Review in June 2011, continuous operational and technical excellence such as SAIDI, system minutes & improvement of system losses. However, even as we faced financial constraints and global challenges, TNB has forged ahead with numerous electricity supply projects that promise not only to boost our generation capacity but are also environmentally-friendly, and will contribute to a greener energy landscape in the country.This includes: 250MW Hulu Terengganu Hydroelectric Project in Terengganu, 372MW Ulu Jelai Hydroelectric Project in Pahang and the development of the nation’s 1st supercritical coal-fired power plant (1000 MW) plant in Manjung. On the customer side, we have launched a new customer charter to reinforce TNB’s commitment in meeting the customers’ requirement. The customer charter addresses the standard performance requirement such as Minimum Service Level (MSL) & Guaranteed Service Level (GSL). We also value staff contribution and commitment in ensuring continuous, reliable and sustainable electricity supply. In handling the misperception by certain stakeholders & customers and also to enhance our success of meeting the targets of our long term strategic plan, I have also introduced 4 main thrusts to move the company forward and realise a vibrant workforce and productivity revolution. These 4
thrusts are: building trust & relationship, building capacity, building performance and building growth. PI: The gas curtailment in Malaysia has been a frustrating period for power generators, can you explain the current situation and outlook here? DAB: As early as 2010, the power industry experienced major interruptions in gas supply. As a result, in order to keep the lights on, TNB has had to meet its demand by burning alternate fuels (oil and distillate) which are 5 to 6 times more expensive than gas. TNB had to even purchase more expensive electricity from our neighbouring utilities to ensure that all customers will still get electricity. In line with Government decision for cost sharing mechanism for the gas curtailment, TNB was compensated the two third portion amounting RM2,046 million in January 2012 for the additional fuel cost incurred in the period January 2010 – October 2011. In addition it has also received the compensation of RM356 million for the additional fuel cost incurred in the period November 2011 to March 2012. TNB is also expected to receive compensation for the differential cost incurred in FY2012. Moving forward the gas supply to power sector is expected to improve in particular with the completion of re-gasification terminal (RGT) by end of 2012. The first 1,100 mmscfd gas supply will be based on government’s regulated gas price and any additional import of LNG will be based on actual LNG market price. A fuel and electricity pricing mechanism to reflect the increase of fuel cost will be developed by Government to ensure that TNB shall not be burdened with it i.e. TNB will be financially neutral to any additional fuel cost increase. PI: The challenges surrounding finite fuel resources for power generation are clear, how are TNB improving efficiency across key plants
such as Sultan Iskander, connaught Bridge and Tuanku Jaafar to reduce fuel usage? DAB: Fuel cost is the biggest portion of operating cost in the generation business. Hence, it is in the industry interest to reduce fuel utilization by improving plant efficiency. At TNB power plants, the initiative to improve plant efficiency involves upgrading power plant components for better component performance, as well as improving overall plant efficiency. For example, at Sultan Iskandar Power Station, we have upgraded our 13DM gas turbine plant and replaced the compressor blades with the latest state-of-the-art Controlled Diffusion Airfoil CDA profiles. The second gas turbine at the same station is planned for upgrading in November 2012. Our frame 9E gas turbines components sealing has also been improved with the upgraded sealing technologies, while the turbine blades will be replaced with the New Advanced Aero design. We have also installed High Efficiency Particles Arrestor (HEPA) air filter to ensure minimum fouling of gas turbine air intake and compressor. At the air intake area, we are replacing the original lower pressure Compressor Water Washing System (CWWS) with a high pressure CWWS that enables both On-line and Off-line water washing. The compressor efficiency can be sustained for a longer duration by regular On-line water washing. Connaught Bridge Power Station is among our power stations fitted with this new system. To improve the overall plant efficiency, we are currently evaluating efficiency improvement programs at our Tuanku Jaafar Power Station. We are looking into Cooling Optimization Package (COP), Enhanced Compressor Package (CEP) and Plant Optimization Module for our frame 9FA gas turbines. We are also developing Plant Efficiency Monitoring module to allow us to monitor the overall plant efficiency.
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PI: The unregulated power market in key Asian countries, presents a lot of opportunity for services in plant operation and maintenance, cable laying, commissioning. We understand this to be key growth market for TNB, can you explain some of your capability in this area? DAB: One of the aspirations detailed in our 5 year strategic plan is ‘Visible Presence in Energy Related Business Regionally & Internationally’. In FY2011, TNB’s non-regulated business achieved its total targeted revenue of about RM1.8 billion. We leverage our expertise in the area of providing operation & maintenance, consultancy and training services. Currently, we have made footprint in these areas of services in Middle East and Asia. We already have a presence overseas via our wholly owned TNB Liberty Power Limited in Pakistan and with our investment in Shuaibah IWPP, Saudi Arabia’s largest green field independent power and water project which was completed on schedule in August 2010. Several of our subsidiaries managed to export their expertise as follows: • TNB Repair and Maintenance Company (REMACO) • Awarded contract to be the operator for Laraib Energy’s 84 MW hydropower plant in New Bong, Azad Jammu & Kashmir,Pakistan. • Minor inspection for three units of V94.2 gas turbine at Yemen’s Public Electricity Corporation (PEC) Maarib Power Station • Exploring O&M contracts within the target market: 860MW co-generation (power and water) plant in Shuaiba North, Kuwait, 225MW diesel combined cycle plant in Lahore, Pakistan, 80MW bagasse and coal-fired power plant in Rahim Yar Khan, Pakistan TNB Engineering Corporation Sdn. Bhd. (TNEC) is involved in the EPC of District Cooling System plant for the Building Material City and Al Reef Development in UAE. Tenaga Switchgear Sdn. Bhd. (TSG) is the only manufacturer of HV switchgears in SE Asia that offers turnkey contracting of transmission and distribution substation services, substation engineering and design services, and specialised maintenance and repair of high, medium and low voltage equipment services. TSG has secured
Sultan Iskandar power plant, Pasir Gudang, Johor
contracts and supplied gas circuit breakers (GCB) to Pakistan, Vietnam and Indonesia. Exploring new market in India, Sri Lanka, Bangladesh, Australia and middle east. Malaysia Transformer Manufacturing Sdn. Bhd. (MTM) supplies transformers to Saudi Arabia and Brunei Tenaga Cable Industries Sdn. Bhd. (TCI) – penetrated market in Jordan and other middle east countries. Exploring opportunities in Saudi Arabia, Kazakhstan and Uzbekistan Our training arm, TNB Integrated Learning Solution Sdn. Bhd. (ILSAS), and Universiti Tenaga Nasional Sdn. Bhd. (UNITEN), also successfully marketed their training and development programmes overseas. PI: The FTJ Bio Power Sdn Bhd joint venture with the Felda Global Group is an exciting initiative, EFB in Malaysia offers huge potential for biomass if utilized properly in preparation and combustion. How can the biomass prospective of Malaysia be realised? DAB: We believe biomass can have a significant role to play in Malaysia’s energy mix. In fact, with the introduction of National 5-Fuel Policy and Renewable Energy Act in 2011, renewable energy is recognised as one of the main fuel for power generation. Malaysia, being the second largest of palm oil producer, has an abundant supply of Empty Fruit Brunch (EFB). Considering the sustainability and the availability of biomass resources, it is natural that we should actively explore the potential of biomass. In fact, we are partnering with Felda Global group to plant a 12.5MW biomass plant in Jengka, Pahang. Under the RE Act further, a Feed in Tariff (FiT) has been implemented since December 2011, to be paid for by consumers by the allocation of 1% of electricity bills into the RE fund. With the FiT scheme introduced, the Renewal Energy (RE) development in Malaysia will be expanded and improved to make up to 5.5% of the generation mix by 2015. In support of this scheme, TNB plays the role as a FiT fund collector which is derived from the 1% of electricity bill (kW & KWh Charge) collected from end-use electricity consumers.
Under the Small Renewable Energy Programme (SREP), TNB has signed REPPA with RE developers for a total of 337 RE projects with potential 166MW connecting to Grid and 13 projects have been commissioned with total installed capacity of 3.05 MW as of Mar 2012 PI: We understand that you have been invited to participate in the development of a 1320MW coal fired project at Maheshkali with the Bangladesh Power Development Board, can you give us an update on proceedings? Are there any other countries that you are looking at for overseas plant development? DAB: At the moment TNB and BPDB is still negotiating the MOU. Discussions have been ongoing and the plan is for the parties to meet up between the middle to the end of October 2012 to finalise the MOU. We have sent official invitation to the Chairman of BPDB & the Power Secretary, Ministry of Power, Energy & Mineral Resources of Bangladesh. Once the MOU is signed the parties will proceed to carry out a due diligence based on the roles set out in the MOU. Other countries that we are currently looking at are Saudi Arabia, Indonesia, India, Sri Lanka, Egypt as well as several others in MENA region and Asia.
Tuanku Jaafar Power Station, Port Dickson PI: Development of the smart grid is key to fuel conservation, can you tell us about TNBR’s work in this area? DAB: TNB as the fore-runner of Green Initiative in Malaysia is developing TNB Research Green & Smart Technology Centre by the year 2015. This research centre will accommodate TNBR Advanced Research Programs encompassing: • Low carbon power generation technology • Emission & Waste management technology • Smart grid and green energy technology TNB as of now has already identified and embarked on smart grid demonstration projects for low network loss and higher reliability. The main objective of Smart Grid Demonstration Project is to gain operational experience for conceptualizing a Smart Grid Roadmap for Malaysia. Three sites have been identified for test systems representing three categories of customers: • Bayan Lepas (North); represents industrial customers • Bukit Bintang (Central); represents commercial centre • Medini (South); represents green field area PI: Renewable implementation for Malaysia dictates enhanced operational efficiency at T & power insider september/october 2012 73
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tenaga nasional berhad case study
JanaManjung Power Plant, Manjung, Perak
D control centres to cope with fluctuating supply. What actions are being taken by TNB to ensure a quality service? DAB: To ensure quality of power supply, TNB requires that Power System Study (PSS)/ Connection Confirmation Check (CCC) to be conducted to assess the potential impact of the Distributed Generation (DG)/Renewable Energy (RE) plant on TNB grid system. The PSS will assess technical impacts of this interconnection in terms of: Voltage profile, System Adequacy (e.g. power flow & overload conditions), System Losses, Fault level and other existing operational constraints. If the connection is not technically feasible, TNB will propose alternative mitigation plan to the DG/ RE providers. For example, when there is a voltage rise due to long interconnection cables, TNB will propose on generator installation with the capability to control power factor (able to supply or absorb reactive power in the system if required). If the generator does not have the capability, an additional reactor or capacitor will be needed. Otherwise, the RE generation capacity shall be reduced accordingly. In order to enhance grid system monitoring, TNB requires DG/ RE plant with a generation capacity of more than 2MW to be equipped with Supervisory Control and Data Acquisition (SCADA) system. Other technical operational requirement includes: protection relays installations for conditional disconnection upon any divergence of operating limits or developer’s internal fault, compliance to TNB’s latest specifications and Interconnection Operation Manual (IOM).
PI: The colossal 1000 MW supercritical coal fired power plant at Manjung 4 is a very exciting project. As the countries first supercritical development, with less emissions and enhanced combustion, can we expect to see anymore plants of this nature come under development in the near future? DAB: The next coal fired power plant which is scheduled to come on stream is the IPP’s Tanjung Bin Energy in the state of Johor which will be the second supercritical coal fired power plant in the country. Moving forward, for any new power plant development, the Energy Commission is responsible to conduct a competitive bidding process in order to meet the electricity demand of the country. In view of our Prime Minister announcement during the 15th Conference of the Parties (COP-15), Malaysia is going to adopt an indicator of a voluntary reduction of up to 40% in terms of emissions intensity of GDP by year 2020 compared to the 2005 levels, subject to assistance from developed countries, we believe the future competitive bidding process will result in power plants with less GHG emissions and enhanced combustion technology. As such, if coal is
an option in the future, a more efficient supercritical type of plant will likely to be preferred. PI: Malaysia’s first competitive bidding procedure has just been announced with TNB winning the Prai combined cycle power plant, do think the format is a success for new projects? DAB: We are of the view that the competitive bidding process that is currently being conducted by the Energy Commission is a transparent and efficient one. This process will drive the future price offered by power plant developer to be at the most competitive level. The utmost important thing is, at the end of the day the consumer and public will gain from this process since it is one of the most effective ways to partially mitigate future electricity tariff increases. Moving forward, all future plant up development has to be based on competitive bidding process. We trust through this process, the Malaysian Electricity Supply Industry (MESI) will be more transparent, robust and sustainable. TNB as one of the key players in MESI supports this initiative as regardless of who wins the bid, the price will be competitive whilst adhering to the criteria and guidelines imposed for future power plants.
‘ON THE cuSTOMER SIDE, WE HAvE lAuNcHED A NEW cuSTOMER cHARTER TO REINFORcE TNB’S cOMMITMENT IN MEETING THE cuSTOMERS’ REquIREMENT. THE cuSTOMER cHARTER ADDRESSES THE STANDARD PERFORMANcE REquIREMENT SucH AS MINIMuM SERvIcE lEvEl (MSl) & GuARANTEED SERvIcE lEvEl (GSl).’
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china wind power
Wind PoWer overvieW:
By Rachael Gardner-Stephens
China Encouraging Boom, Fighting thE Bust
W
ind power makes sound economic sense. As a massive indigenous power source,wind energy available virtually everywhere in the world. In contrast to other generation sources, the price for the fuel needed over the total lifetime of a wind turbine is well known: it is zero. Additionally, there’s no geo-political risk and no supply import dependency, and it is completely carbon neutral. Such advantages of wind power are being increasingly recognized. The Global Wind Energy Council (GWEC) estimates that the global wind industry will install more than 46GW of new wind energy capacity in 2012. Total installations for the 2012-2016 period are expected to reach 255GW, with cumulative market growth averaging just under 16%. Since the first commercial wind turbines were deployed, their installed capacity, efficiency and visual design have all improved enormously. Wind turbines can operate across a wide range of wind speeds - up to the equivalent of gale force 9 or 10 – and extreme sites, such as the desert or the freezing arctic. Wind turbines have also grown larger and taller. The generators in the largest modern turbines are 100 times the size of those in 1980. Over the same period, their rotor diameters have increased eightfold. The largest turbine currently in operation is the Enercon E126, with a rotor diameter of 126 meters and a capacity of 6MW. Although the Alstom Haliade, Siemens SWT- 6.0 150 and Sinovel SL 6000 are all close on Enercon’s heels with 6MW models. This growth in size and proliferation in number has caused some outcry, and wind power is not without its disadvantages. Reliability is hit and miss; mother nature unfortunately does not cater to demand. Local populations have raised objections to the aesthetics of the wind turbines, and naturalists have suggested that the turbines damage ecosystems. However, the development of advanced turbine technology brings the tools to circum navigate some of these issues, and the benefits of wind power are currently outweighing
the sacrifices. Asia is the world’s fastest growing market, installing 118GW between now and 2016. Over the next couple of issues, PiMagazine will begin to collate a detailed overview of this market, starting here with China. China is the biggest market in the world for wind power. The key word for the wind sector in China is ‘growth’, with government and industry throwing their weight behind wind power’s potential. According to the third National Wind Energy Resources Census, China’s total exploitable capacity for wind energy is around 700-1,200GW. This outstrips most Asian and European markets. The China Wind Energy Association (CWEA) announced the country’s position as the world’s wind power leader in 2011, with 17.6GW of wind turbines installed in 2011. Though this was down 6.9% from the previous year, it took China’s cumulative wind power installed capacity amount to 62.4GW, up 39.4% year-on-year, by the end of 2011. The Chinese wind power sector has expanded overseas capabilities as well as domestic. In 2010, four Chinese wind turbine manufacturers, Sinovel, Goldwind, UnitedPower and Dongfang Electric, became part of the world’s top ten largest wind turbine manufacturers. The scope of this overview will cover a number of aspects of the Chinese wind sector. It will look at the Chinese government’s wind power targets, the potential of offshore wind power, regional power base developments, and some of the negative factors affecting the wind market before giving an overview of the major utilities and turbine manufacturers. Chinese Government tarGets 2011 has been considered a slow year for the industry. This has been attributed to global economic factors, the rise of smaller, competitive companies and to delays in construction. However, there is no shortage of funds for wind power, and the government has published an array of targets and roadmaps.
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The breathtaking growth of the Chinese wind industry has been driven primarily by national renewable energy policies. The first Renewable Energy Law was announced in 2006 by the National Energy Administration (NEA), and was implemented in 2007. In addition, the government implemented the “Medium and Long-term Development Plan for Renewable Energy in China” in 2007. It was the first time the Chinese government set explicit quantified goals for renewable energy development. The plan set out the government’s long term commitment and put forward national renewable energy targets, policies and measures for implementation. The plan establishes a national renewable energy target of 10% of total primary energy consumption by 2010, and 15% by 2020. In addition, specific development targets for different types of renewable energy technologies were set, including a 5GW target for wind power by 2010, and 30GW by 2020. These targets have been adjusted upwards since, in order to accommodate for the tremendous pace of renewable energy development. In 2009, China finally introduced a feed-in tariff for wind power generation, which applies for 20 years of a wind farm’s operation. There are four different categories for the tariff, depending on the region’s wind resources, ranging from 0.51 RMB/ kWh to 0.61 RMB/kWh. The NEA also set a series of development goals for the country’s renewable energy sector during the 12th Five-year Development Plan. It dictates that by 2015 the country’s wind power capacity will reach 100GW. Another recently issued government roadmap plans to bolster China’s wind power capacity to 200 GW, 400GW and 1,000GW by 2020, 2030 and 2050 respectively, making wind one of the five major sources of electricity across the country. the roadmap suGGests the followinG timeline: Before 2020, give priority to the development of onshore wind power projects, supplemented by near-shore offshore demonstration projects; From 2021 to 2030, lay equal stress on the development of onshore and near-shore wind power projects, supplemented by far-offshore demonstration projects; From 2031 to 2050, realize synchronous development of all three types of projects. On 11 August 2008, the Ministry of Finance issued “The Management Regulations on Special Fund for Wind Power Manufacturing Sector in China”. The document specified guidelines for the establishment of a special fund in support of domestic research and development of MW-scale wind turbine systems. Wang Zhongying, director and research fellow at the Center for Renewable Energy Development of the Energy Research Institute, has stated that “by 2050, wind power projects are expected to address 17% of the power demand in China”. Based on this target, by 2050 China’s investment in the wind power sector is expected to reach RMB 12 trillion. The wind energy sector has benefitted enormously from government targets and quota policies, measures in support of the domestic industry power insider September/october 2012 77
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china wind power and a protectionist tax incentive and tariff policy. Combined with the relative maturity and reliability of technology as compared to other renewable energies and the country’s potential for wind capabilities, a stable, foreseeable environment for wind power investment in China has been cultivated. offshore wind The development of offshore wind is in its infancy. So far, China has developed only 138MW of offshore wind, which is less than 1% of the country’s total potential; and these are mostly demonstration projects. However, as we can tell from the government’s roadmap, the future of the wind sector focusses on offshore. The current national plan calls for China to boost offshore wind to 5GW by 2015 and to 30GW by 2020. This is due to the huge potential capacity; according to the China Meteorological Administration, the country has 750GW of exploitable wind resource offshore - three times that on land. Offshore also presents a reduced impact on the human population (visual, noise pollution, etc.), and gives better output and more consistent generation than onshore wind turbines. Additionally, there is more opportunity for profitable investment, with onshore power all but tapped out. The country’s first offshore wind turbine was erected in a pilot project in Northern China’s Bohai Bay in 2007. In June 2010, China completed construction of its first large-scale offshore project, the 102MW wind farm near the East Sea bridge of Shanghai city. The project was the only offshore wind farm outside Europe. Three months later, the National Energy Bureau (NEB) announced a public tender for four offshore projects totaling 1GW in Binhai, Sheyang, Dongtai and Dafeng in East China’s Jiangsu province. The ideal sites for offshore wind farms are on the eastern and southern coastlines, near China’s economic powerhouses. Key locations’ local governments and leading power companies have announced targets for offshore wind. Shanghai aims to develop 1GW by 2015, and Guangdong plans to develop 2-3GW before 2015, with another 7-8GW by 2020. Other key projects include an agreement between Huadianand the Xuwen county government in Guangdong to develop a 300MW offshore wind farm. Additionally, Huaneng Renewables has signed a contract with Dafeng county government in Jiangsu to develop a 300MW offshore pilot, with an investment of CNY 6 billion. Meanwhile, Guodian Power signed a CNY 9 billion contract with the Zhoushan government for a 500MW offshore wind farm. Naturally, no energy technology is perfect, and there have been a number of issues plaguing the development of offshore wind. These issues range from the technological to the bureaucratic, and financial: A key obstacle to offshore wind is the high development cost. XieHongwen, a senior engineer at China Hydropower Planning and Design Institute, states that offshore wind farms are two to three times more expensive than onshore. To be effective, offshore wind turbines need to bigger than onshore. Fixing large foundations
in the sea bed, collecting the electricity and transmitting it to the shore all increase the costs of offshore development. Therefore, the turbines need to collect as much electricity as possible to make it cost effective. Last July, NEB and the State Oceanic Administration (SOA) issued regulations states that offshore wind farms must be constructed no less than 10 kilometres from shore, and in waters no less than 10 metres deep. This will limit the development of inter-tidal projects. These regulations have hampered the progress of the four offshore projects tendered by the Chinese government, meaning that they all had to be relocated. According to industry officials, the Feed in Tariffs (FiTs) provided for offshore wind projects are too low for developers to make a profit. Winning companies are sacrificing economic gains to win development rights. Despite these issues, offshore wind is likely to present the most opportunities for investment in the coming years. Taking into account the new technologies, government subsidies, and the country’s potential capacity, big companies seem willing to negotiate the issues thrown up by wind farm development. Zhang Yuan, deputy general manager of Longyuan Power, says China’s 5GW offshore target for 2015 is actually conservative, and hopes that China will fulfill this objective ahead of time. reGion Based development At present, grid connection and rapid need for generated energy are the two major factors restraining the development of China’s wind power industry, both onshore and off. In order to drive wind power development, the NEA selected locations from the provinces with the best wind resources and set targets for each of them to be reached by 2020 (see table below). Wind 2010 2015 2020 Power Base Heibei 4,160 8,980 14,130 Inner 4,211 13,211 30,811 Mongolia East Inner 3,460 17,970 38,320 Mongolia West Jilin 3,915 10,115 21,315 Jiangsu 1,800 5,800 10,000 Gansu 5,160 8,000 12,710 Jiuquan Xinjiang 0 5,000 10,800 Hami Total 22,706MW 69,076MW 138,086MW According to the plan, wind power bases will add up to 138GW of wind power capacity by 2020, on the assumption that a supporting grid network is established. So far the Chinese government has confirmed seven GW-scale Wind Power Bases, which amount to 83 projects. Some of the key projects are detailed below. fujian provinCe China’s Fujian province is a hotspot for domestic wind turbine makers. State-owned firms including Datang Group, China Huadian Corporation and China Longyuan Power, as well as province-
level companies such as Fujian Investment and Development Group and Fujian Energy Group, have all launched wind power projects here. Fujian province is a key province for offshore wind development. Fujian’s winds brought by the frequent tropical storms attribute to abundant resources along its coastal areas. Noticeably, the high, consistent average wind speed makes Minjiangkou, a locale in the province, an ideal location for harnessing wind resources. Fujian province is the location of China’s first 5MW direct drive permanent-magnet generator wind turbine. Once the project is completed and connected to the grid, it will be able to generate 15GW of power annually. The 5MW generator was developed by XEMC Wind Power and Zhongmin Wind Power. Such advanced wind turbine technologies bring significant economic benefits. The 24 2MW units of Zhongmin Wind Power’s Jiaru project generated more than 130 million kWh of power in 2010 and 150 million kWh in 2011. XEMC has installed 239 such units in Fujian province to date, with 12 wind power plants in operation or under construction. To further consolidate and expand its presence in the province, XEMC has joined hands with Datang Group to construct a turbine manufacturing plant in the area. the hexi Corridor - Gansu provinCe China is seeking to develop the Hexi Corridor, part of the ancient Northern Silk Road, into a demonstration zone for renewable energy.Gansu province is rich in renewable energy resources, with enough wind to provide 80GW of capacity. The average annual effective wind power density in the area is upwards of 150 W/m2, while the duration of effective wind speed exceeds 6,000
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hours per year. Gansu has excellent geographical, climate, and transportation conditions for the establishment of large scale wind farms. jiuquan provinCe Development here is very healthy. By 2015, total wind power capacity in Jiuquan is expected to top 14GW. In addition, the province has also planned a number of supporting facilities, including pumped storage power stations and peaking power plants, all of which will be completed by 2015. In the Jiuquan province, preliminary work on the second-phase of an 8GW initiative is now underway. Jiuquan is also now planning a 650MW wind power transmission project. Gansu Electric Power Design Institute of the China Energy Engineering Group is undertaking the project and sailed through design and planning review by the Gansu Electric Power Corporation of State Grid in early 2011. The project’s transmission system, which covers 14 wind farms from China Guangdong Nuclear Power Group, China Datang Corporation, Huaneng Renewables Corporation, China Power International New Energy Holding Ltd. and other domestic key industry players, passed firststage review last September and is currently under second-stage review. In addition, Jiuquan’s New Energy Equipment Manufacturing Industrial Park attracted 35 domestic major renewable energy equipment providers; 17 have an output value of over 100 million yuan. The park has become the largest of its kind in the country. As of the end of 2011, Jiuquan’s wind power equipment manufacturing sector recorded 43.2 billion yuan in sales revenue, becoming a new driver of local economic growth.
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heBei provinCe The focus in the Hebei province is offshore wind. An offshore wind farm with an installed capacity of 300 MW, the largest such project in China, is currently being planned. The wind farm, built with a total investment of 5.76 billion yuan, will comprise of 100 units of 3MW offshore turbines. It will be located near Puti Island in the Bohai Sea. Authorities will complete procedures to sanction the project at the end of the year, and the project will be connected to the grid before the end of 2015. When it goes into operation, the wind farm will generate 752 million kWh of electric power annually, as well as 730 million yuan in annual sales revenues. Additionally, a Chinese news agency has reported that the government may issue a second request for tenders for offshore concession projects, totaling two GW, in 2012. ChallenGes: the saturated market Unfortunately, China’s positive plans don’t reflect the reality of developing wind farm sites, and wind turbine manufacturers in general were experiencing serious financial decline in 2011 and the beginning of 2012. The rest of this article will focus on the main power generators and turbine manufacturers, at their performances this year, their current capacity and their upcoming projects. It would be difficult to look at these companies without setting the economic context by summarizing the issues that have plagued the market. In 2011, all the incentives and grants plus an unhealthy global economy led to a glut in the market for wind turbine and component manufactures. This drove down the price of wind turbines by 23% since 2009, squeezing turbine makers’ margins and
intensifying competition. This has created a shrinking market in onshore wind, causing the major manufacturers to refocus their investments in low speed wind, and offshore and intertidal turbines. Turbine manufacturers are also looking to expand their global export markets, but this too has been challenging, largely because of China’s escalating trade dispute with the USA. China exported $301 million in wind towers to the U.S. in 2011, but the U.S. Commerce Department (USCD) isnow setting tariffs as high as 73% on imports of wind towers. The USCD claim that the Chinese producers sold the utility-scale towers below production costs. The department acted on a complaint by U.S. manufacturers, who had been presumably priced out of the market. In response, Chinese wind energy companies established plants in Europe and India, hoping to circumvent the duties. Last month, Titan Wind Energy announced it would acquire a factory in Denmark. The seller in the deal is Vestas, which is trying to reduce its costs, after job cuts and huge losses. Utility companies and plant contractors have also been facing major challenges in China in the last two years. It appears as though the targets set for wind power by the government were for capability only; not for actual electricity produced. This means that wind farms all over China were being erected at breakneck speed with competitive costs without actually being connected to the grid. As a result, the state is curbing construction so that grids can catch up. Additionally,progress in general is slowing on projects in China, as wind projects are being required to go through a stricter approval process, and there are fewer subsidies available. That is not to say that the Chinese wind
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china wind power as Bayan Nur, Baotou, Ulan Qab, Chifeng, and Xing’an League. • A total installed capacity of 106,300kW has been put into the Hebei Wind Power Base and wind farms are distributed in Zhangjiakou and Chengde. • A total installed capacity of 1,097,950kW has been put into the Wind Power Base in three provinces in Northeast China, becoming the first among China Longyuan Power’s wind power bases with a total installed capacity of over 1 million kW. • The Southeast Coastal Wind Power Base is mainly in Jiangsu, Zhejiang, Fujian, and Guangdong, where a total wind power installed capacity of 581,000kW has been put into production.
market is bleak; quite the opposite. Industry insiders suggest that this decline will plateau, leaving a stable market for wind power investments. There is also no doubt that the Chinese government and industry are serious about continuing to expand the wind power market. industry: utilities China longyuan power Group Corporation limited China Longyuan Power was one of the first domestic power enterprise engaged in the development of renewable energy, as well as a leading enterprise of China’s renewable energy industry. China Longyuan Power focuses on the development and operation of wind farms. In 2011, the groups installed capacity reached 10,573MW. The company also takes the lead in offshore wind power, and wind power at high altitudes and low wind speed area. By the end of 2011, Longyuan wind power storage had amounted to 63GW. China Longyuan Power have a number of ongoing projects. The Xinjiang Dabancheng Wind
Farmfor a long time was the largest wind farm in China. The Shantou Fuao Wind Farm was the first wind power project commercially developed in China. In December 2009, Longyuan Group obtained the right to develop and manage three national concession projects: the Bayin Concession Project at Baotou, Inner Mongolia, the Phase-I Concession Project at Tongyu, Jilin, and the PhaseII concession Project at Rudong, Jiangsu. China Longyuan Power has also proposed a strategy to build up six major wind power bases all over China. So far: • A total installed capacity of 223,800kW has been put into China Longyuan’s Xinjiang Wind Power Base, and wind farms are distributed in the area of Urumchi. • A total installed capacity of 307,800kW has been put into the Gansu Wind Power Base and wind farms are distributed in the area of Jiuquan. • A total installed capacity of 844,900kW has been put into the Inner Mongolia Wind Power Base and wind farms are distributed in such places
According to the Clean Development Mechanism Executive Board (CDM EB) of the UN, eight wind power projects of China Longyuan Power Group Corporation Limited have been approved by the CDM EB and successfully registered. By now, the company has registered 145 CDM projects with an accumulated installed capacity of 7,730MW. China Longyuan Power also has a number of new projects in the pipeline: • The Chuzhou Dingyuan Dajinshan Wind Power Project has been approved by Anhui Development and Reform Commission (ADRC). The proposed project is located in Dingyuan County, Chuzhou City, Anhui Province. The installed capacity of the proposed project is 49.5 MW. • Expansion of Jiangsu Rudong Pilot Offshore (Intertidal) Wind Power Project has been approved by Jiangsu Energy Bureau. The project is located in Rudong County, Nantong City, Jiangsu Province. The approved capacity of the project was 150MW of which 99.3MW was put into operation in 2011. An additional 50MW installed capacity is now approved and the total capacity of the project will be increased to 200MW. • Yunnan Luliang County Longtan Wind Power Project has been approved by Yunnan Development and Reform Commission. The proposed project is located in Luliang County, Qujing City, Yunnan Province. The installed capacity of the proposed project is 49.5 MW. • Seven Wind Power Projects of China Longyuan Power Group Corporation Limited have been approved by local Development and Reform Commission. The proposed projects are located in Shaanxi Province, Yunnan Province, Inner Mongolia Autonomous Region, Guizhou Province and Jiangsu Province, respectively. Total installed capacity of the projects is 330 MW. China Longyuan Group has built up a prolific portfolio to become China’s largest power provider. Moving forward in the wind power sector, China Longyuan Group is focusing on the development of offshore wind projects. China datang Corporation renewable power Co. limited Datang Renewable is the subsidiary company of Datang Group. Datang, the country’s secondlargest wind-power producer, has a total installed
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wind power capacity of 4,142MW. The company plans to expand its capacity by 2,000MW annually from 2012, after raising the capacity to at least 5,500MW by 2011 from 4,000MW at end-2010. Capacity may increase to as much as 6,000MW by the end of 2012. The company owns the Saihanba GW wind farm in Inner Mongolia, which is the world’s largest wind power project in terms of installed capacity. Datang also own the first offshore wind farm in China, Shanghai Donghai Bridge Wind Farm, which has a capacity of 102MW. Datang Renewable is also pushing ahead with developments at Binhai and Sheyang in Jiangsu province and Lingao Cape in Hainan. Datang Renewable president Hu Yongsheng recently stated that the company is close to starting construction of a 300MW project off Binhai, awarded during the first round of national government offshore concessions. Datang is also increasingly undertaking projects in low wind speed regions in central and eastern China as well as along the south coast. Investment in low wind is going ahead despite an 8.6% decline in utilization hours at the company last year. Datang Renewable has attributed this decline to “intensified transmission limitations in certain regions” and lower than average wind speeds in China during 2011. One of the low wind projects going ahead is in the Hubei Province. Datang Renewable has teamed up with Vestas to install the V100 turbine. The introduction of the newest addition to the 2 MW platforms in China took place in 2011. The 27 units of V100-1.8MW turbines with a total capacity of 48.6MW will be installed in the Long Ganhu wind farm, a site with an average wind speed at 5 m/s. The Long Ganhu site is situated close to an intensively energy consuming area. The first turbines were scheduled to be delivered in the second quarter of 2012. location
% of installed total Capacity Capacity (kw)
Northeastern China
61
945,000
North China
99,000
East China
22.6
349,700
Western Inner Mongolia
9.6
148,500
ShaanxiGansu-Qinghai Circle
148,500
299,900 in Trusteeship
Xinjiang South China
kw under Construction 600,000
49,500 6.9
106,600
64,500
huanenG renewaBles Huaneng Renewables is a major force in the wind power industry. In 2009, the installed capacity of wind power generators held by Huaneng had amounted to 1.55 million KW, accounting for 9% in the national wind power market. This placed them third domestically and thirteenth internationally in
the wind market. It is estimated that the Huaneng’s installed capacity will take up over 20% in the market share by 2020. Huaneng owns 10 wind farms that have won the title of “Chinese Excellent Power Engineering Projects” and the “Silver Award for National Outstanding Projects”. It has made many landmark contributions to the industrial development, such as building China’s first indigenous experimental wind farm with a capacity larger than 1MW, the first large-scale wind farm with domestic equipment, the first wind farm built on plateau as well as a wind farm built with the fastest speed. Huaneng also boast of a quicker than average construction period, with wind farms going up within just eight months. More than 90% of Huaneng’s projects use turbines produced domestically in China. Huaneng now plans to increase its installed wind capacity by 45% to about 5.1GW this year, with most projects located in Liaoning, Inner Mongolia and Shandong provinces. At the end of last year Huaneng set a target of 73.5GW of projects. Huaneng also entered into a Joint Venture agreement for the development of wind and solar projects in China with China Ming Yang Wind Power Group (Ming Yang) in July 2012. Controlled by Huaneng Renewables, the JV will see 1GW of projects completed within three years. Though Huaneng and Ming Yang have not yet decided on the amount of capital to put into the venture, they are planning to build a 100MW wind farm in China this year. industry: turBine manufaCturers vestas Vestasis a Danish company, but their contribution to the wind industry globally and in China is worth noting. Vestas installed China’s first wind turbines in Shandong in 1986. As of June 2011, Vestas has installed more than 3,000MW of clean energy across 13 provinces. This makes Vestas one of the biggest suppliers of wind power plants in China. Vestas is a company with caliber, delivering their first wind turbines in 1979. Since then the company has installed 43,000 turbines in 66 countries across six continents, making them the world’s biggest wind turbine manufacturers. Over the past few years, Vestas has established a firmly rooted presence in China with more than RMB 3.5 billion worth of investments and more than 3,000 employees. Vestas has its largest integrated manufacturing complex in Tianjin, its China headquarters in Beijing, a factory in Hohhot, a global procurement office in Shanghai and a foundry in Xuzhou.Furthermore, Vestas has a Technology R&D Centre in Beijing. However, Vestas have been struggling with the downturn in the economy and are finding it difficult to maintain profitability; no one is buying wind turbines. Vestas installed only 501MW worth of wind turbines in China in 2011, down 42% from a year earlier. Vestas are having to shed assets and downsize globally in order to stay afloat. According to Reuters,Vestas is now closing a factory in China just three days after scrapping plans for a factory in Britain. The closure of the Hohhot factory, which makes small V52-850 and V60-850 kilowatt turbines, will result in 300-350
job cuts and generate annual savings of 10 million euros, leaving 2,600 employees in China. Vestas is now a possible target of takeover bids from two of its chief Chinese rivals, according to a report published by Danish newspaper JyllandsPosten. Sinovel and Goldwind are each working toward taking over the struggling wind giant. sinovel wind Group Company limited Sinovel researches, develops, manufactures and sells large-scale wind turbines. The company’s main products include the 1.5MW and the 3MW series wind turbines. Sinovel were the first to introduce China to globally advanced MW-level wind turbine technologies, and the first to realize the mass production of the 3MW wind turbine series. They were the first to construct and 5 and 6MW offshore wind turbine. Sinovel also supplied 34 sets of 3MW wind turbines for the Shanghai Donghai Bridge Offshore Wind Farm, China’s first demonstration offshore wind farm. All turbines have been put into operation and connected to the power grid. Sinovel is one of China’s, and the worlds, largest producer of wind turbines. China installed a total of 18,928MW of Sinovel turbines in 2010, giving them a 23% market share. However, this rapid growth has been followed by a speedy decline. Sinovel estimated that its net income for FY2011 declined by more than 50% compared with 2010 profits of 2.856 billion Yuan. The decline in profitability was attributed to several factors: intense competition, delays in the development of projects and a series of mishaps that adversely affected the grid. The situation does not seem set to improve in 2012, as Sinovel recently revealed a 96.25% yearon-year decline in their profits. Sinovel stated that net profits totaled 24.67 million yuan in the first six months of 2012. Sinovel also revealed that operating revenues dropped 42.04% year-on-year to 3.09 billion yuan. In response to these challenges, Sinovel are trying to reduce production costs and tap the overseas market. In August, the board of directors also voted to replace the president of the company, Han Junliang, with board member and joint founder of Sinovel Wei Wenyuan. Junliang will keep his post as chairman of the board. Though Sinovel’s current situation seems difficult to recover from, market experts have predicted that China’s saturated turbine manufacture market will soon begin to level out. It is estimated that the number of domestic turbine makers will steadily drop, leaving a pool of respected domestic and foreign players.Despite poor financial performances in the last eighteen months, Sinovel are a large and established company, with the stability and the quality of products to be left as a major player. Additionally, Sinovel are heavily investing in offshore wind. In February this year, Sinovel announced it would supply 17 offshore turbines of 6MW for the first stage of Shanghai Lingang offshore pilot project. With its enormous potential combined with the glut on power and resources in onshore wind, offshore wind seems like the right horse to be betting on, making the investments less of a gamble for cash strapped Sinovel. power insider September/october 2012 81
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china wind power
Goldwind Goldwind is an international, multi-faceted wind power company based in Beijing. Since the company was founded in 1998, Goldwind has expanded across six continents. With strong international R&D capabilities, Goldwind has become the world’s largest manufacturer of Permanent Magnet Direct Drive wind turbines. From 2011, Goldwind’s installed capacity of wind turbines reached over 12GW, equivalent to 9.6 million tons of coal saved per year, 23.94 million tons of carbon emissions reduced per year, or 13.11 million cubic meters of newly planted forest. In April 2011, Goldwind’s first GW87/1500 PMDD high altitude turbines were successfully connected to the Chinese grid. Goldwind have not been immune to the malicious market forces, however, and the consequences of the economic climate are almost identical to the woes heaped upon Sinovel. Net profits for Goldwind in the first six months of 2012 came in at 72m yuan, down 83% from a year earlier. This caused turbine sales volumes to drop 42% to 721MW, while revenues on the equipment slid 37% to 3.2bn yuan. Goldwind attributes this massive decline to a number of issues, including a change in government policy last year that slowed commissioning of projects, and the huge competition in the turbine market, particularly amongst the 2MW or higher market. However, Goldwind points out that it is generating a higher portion of sales from overseas projects, as well as from services and wind farm operations.Services revenue increased by 261% to 162m yuan while revenue from power generation
G P
by wind farms operated by the company was 101.5m yuan, up 114.3%. Looking forward, the company sees selling prices “steadily returning to a more reasonable level”, while market competition is increasingly focused on core technologies, product quality and services.Prices of raw materials such as rare-earth magnets, copper and steel have decreased, helping to control costs. Over all Goldwind, like Sinovel, are most likely to survive the declining market.
(together the W. Power), respectively, for two wind power projects with a total capacity of 125MW in Bulgaria. Ming Yang are rapidly expanding despite the economic climate, and rumors abounded about their involvement in a possible takeover bid for struggling Vestas. However, as reported by Reuters, Ming Yang have no plans to acquire troubled Vestas, denying a report that it was in talks to buy its Danish rival for up to $2.5 billion.
China ming yang power Group Ming Yang is a leading and fast-growing wind turbine manufacturer.The company’s products consist of two basic models of wind turbines, each with a rated power capacity of 1.5MW designed to cater to the wind and other weather conditions and power grids in China. Ming Yang cooperates with aerodyne Energiesysteme, one of the world’s leading wind turbine design firms based in Germany. Ming Yang’s key customers include the five largest stateowned power producers in China, with an aggregate installed capacity accounting for more than 5.5% of China’s newly installed capacity in 2010. Ming Yang also obtained licenses from aerodyn Asia Co. Ltd. to manufacture and distribute wind turbines utilizing its advanced super-compact drive (SCD) technology, with a rated power capacity ranging from 2.5MW to 3MW and a rated power capacity of 6MW. Ming Yang also announced in 2011 that the company has entered into EPC contracts with W. Power EOOD and A1 Development EOOD
summary In sum, the Chinese wind market is a diverse and vast market. This article, though covering a range of topics, barely scratches the surface of the industry. A number of conclusions can be drawn, however, which gives one a feel for the market. Firstly, the Chinese government is keen to promote renewable energy and wind power is seen as a key part of their national targets. Secondly, this drive from the government created a boom period for Chinese wind power which reached its height in 2010, increasing drastically China’s installed capacity as well as the amount of turbine manufacturers making the parts. Thirdly, combined with a global economic crisis the wind market became saturated and competitive, leading to a spectacular decline in profits for manufacturers and utilities alike. Finally, and probably most significantly, this slump in the market is not deterring Chinese companies from developing more wind farms and investing in more projects. Wind energy has a stable market with staying power in China.
82 September/october 2012 power insider
Glo
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Global Lightning Protection Services A/S - a worldwide provider of Lightning Protection to the Wind Turbine Industry
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GLOBAL LIGHTNING PROTECTION SERVICES CASE STUDY
LIGHTNING THREAT FOR THE WIND INDUSTRY WITH MR. KIM BERTELSEN OF GLOBAL LIGHTNING PROTECTION SERVICES
PI: We know that damage to turbines from lightning and other electromagnetic fields can be a devastating factor to key electrical components, how do you assist in combating these negative effects on wind turbines? KB: First of all we are defining the overall lightning protection concept that from an overall point of view is protecting the entire wind turbine from blade tip to tower foundation. We need to be sure that all lightning strikes are entering on the right locations and are not causing interruptions or damages to other components and systems in the wind turbine. Based on our knowledge we understand physics of lightning and are educating our customers to understand the implications of lightning strikes and we are explaining how we see the specific wind turbine or sub system being protected. Our services ranges from taking complete responsibility over a lightning protection design to assisting experienced customers with detailed design and verification testing on specific areas.
edition recently giving better description on how to test and verify SPD/TVSS to be more safe and robust components, which is what is needed in wind turbine applications where lifetime of all components are getting more and more critical. On large wind turbines the consequence of a failure due to lightning can be catastrophic in terms of repair cost and loss of production. It is our recommendation that also the Asian wind turbine manufacturer and their sub suppliers of main components and systems are considering this development and are using stronger protection solutions and document this by testing. We as a company are often testing and evaluating existing lightning protection designs in accordance with the IEC 61400-24 standard and we can issue an ‘Attestation of Conformity’, which can then be used by the manufacturer as documentation.
the SPD is no longer protecting and the wind turbine continues to operate it will not be protected and surges and transient can have direct access to the vital parts of the system. We recommend that SPDs are lasting longer than the components that it has to protect.
PI: What are the key factors wind turbine operators should consider when specifying Lightning protection? What problems have you seen in the past? KB: The wind turbine operator must specify verified lightning protection solutions where computer simulation and laboratory tests in combination are used to verify that the components and systems can withstand the real effect. Such tools and tests are available now and it is important to use what is available to secure the also lightning protection is being better. It is important that tests are done in as close to PI: As offshore demand grows and becomes full scale to simulate as many aspects of lightning as more competitive, composites are developing possible. We are seeing requests for full scale blade to be more advanced, lighter and stronger, does testing and also full equipped and operating nacelles PI: Can you tell us about some recent benchmarks this have implications for the lightning protection are being tested with artificial lightning to verify that that you have reached in the Asian market place, market also? no weak components or wrong installation practice and successful examples of where simulation has KB: As the turbines grow in size and are located are coursing interruptions or failures. Many of the been used effectively to verify engineered solutions offshore the consequence of failures are also subsystems in a large multi megawatt wind turbines in surge protection? growing. The accessibility on offshore turbines is has an important role and in case these systems are KB: It is generally being more accepted to actually limited due to weather constraints and therefor a failing the consequence in terms of turbine safety can verify solutions for lightning and surge protection. stop or failure – or just a damaged SPD that has to be very critical. During full scale testing we have seen Also more of our Asian customers are asking for be replaced can result in longer standstill periods many cases where very small details as poor EMCverification done by computer simulation and/ being very costly for the wind turbine operator. shielding, wrong installation methods or weak SPDs or laboratory testing to simulate the real effect of Modern wind turbines are being more and more can have a high importance to the immunity of the lightning on a specific wind turbine solution. We advanced using advanced materials and complex systems. Details that are relatively cheap to handle consider this as a strong development to the wind control systems, which are making the wind turbine during the early design process but sometime maybe industry in direction of using modern tools that has more sensitive to damages and interruptions. We impossible or at least very expensive to correct when been developed over the last years. We see a growing are seeing constantly increasing requirements and the turbine are in operation. interest from Asian manufacturers to use our skills interest in our services in protecting both the Another thing the operators must specify is to and services to reach another level of protection. mechanical components against the direct lightning have proven performance on the blade lightning effects but also in increasing the protection protection. It is becoming more and more critical PI: Can you tell us your views on the UL & efficiency on indirect effect protection on electrical when blades are not strong enough protected. It IEC standards, and how Asian wind turbine power and control systems. The efficiency and is important to realize that all blades are hit by manufacturers can work towards these for lifetime of the protection solution is something we lightning several times during its lifetime and most growing exports? are working a lot with to secure that the lightning embedded components in the protection system KB: We have been involved in the development protection system has a high performance but are cannot be changed during the entire lifetime – and of the new IEC standards for lightning protection also withstanding several lightning strikes without even not inspected. This gives very requirements and especially IEC 61400-24 on lightning degradation or erosion. We are i.e offering 10 years to the design in terms of lifetime durability. Also protection for wind turbines. Using these standards of warranty on SPD’s were we have been involved mechanical fatigue issues are to be taken into will bring the manufacturer in the direction of in securing the right component selection and consideration when designing and testing a blade stronger and more reliable wind turbines. IEC installation method. We believe that the SPD is a lightning protection system. We see too often 61400-24 is describing how to perform testing too passive and inexpensive component that should blades that are failing because no one really believes and are much stricter than its predecessors guiding not cause problems in terms of efficiency and too what force and power that the lightning strike can the manufacture really to develop turbines that short lifetime. We often claim that these SPD’s apply to the blade. It is just important to realize can withstand a direct lightning strike without should last longer than the system or component that it is not acceptable that the blade is requiring even taken notice of it. The UL standard UL 1449 that they are put in place to protect. Otherwise is repair or replacement just because of a lightning for surge protection has been released in a 3rd case of malfunction in the surge protection where strike – especially not on an offshore location. 84 SEPTEMBER/OCTOBER 2012 POWER INSIDER
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engentech case study
Case studies:
D
NEw CONtrOL SyStEm, OLD EqUipmENt, SEamLESS OpEratiON OF pLaNt
ue to an unstable grid power supply in Sabah, Malaysia, the palm oil refineries in this region experience unpredictable or untimely power interruption leading to huge loses, process downtime and production in-efficiency. Despite having in house generation capability (Mixture of Diesel Generator and Steam Turbine Generator), these refineries face challenge switching between the two power sources without interruption to the refinery process. Sandakan Edible Oil Refinery Factory (SEDO) is located at Sandakan and were constantly disturbed with power outage on monthly or occasionally weekly basis. They have one Steam Turbine Generator (TG) and four Diesel Generators (DG) to backup four Mains Switch Board (MSB) each powering different section of the plant when the grid supply fails.
Figure 1 - SEDO Single Line before Upgrade The old open transition change over system has no provision to seamlessly change over from grid power source to in house generating capacity with each change over causing unwanted process shutdown and plant tripping. Running permanently with in-house generating capacity is cost prohibiting as such a system to allow seamless changeover has to be adopt to allow transfer of power supply both directions. During peak period, when electrical supply from grid become unstable, plant need transfer the in house consumption to in house generating unit while during off-peak period, load will then be transferred back to grid supply. The grid supply voltage to the plant also deviates hugely throughout the day with voltage dip as low as 380V and as high as 440V at some instances, to ensure proper change over system must be able to match not only the frequency and phase of both the power source but also capability to match the voltage amplitude of the power sources. The changeover panel of each plant is located in a separate room approx 200m away from the in house generators room. Provision has to be taken to ensure a reliable and rapid communication between all the change over system and the generators sync, load and control systems to ensure smooth power transition and loading transfer between power sources. The turbine generator gets its steam from a biomass boiler which does not produce a very stable output pressure due to the nature of fuel. This occasional fluctuation for steam disturbs the turbine
power supply reliability and provision has to be made to ensure that sufficient diesel generator is online to cater for the pressure fluctuation. The client has intention to ensure the turbine are loaded as much as possible and whenever possible (high steam boiler pressure) while reduce running hours/reduce fuel consumption of diesel generators. The governing system on the Turbine generator is a mechanical hydraulic type (Woodward UG8D), the limitation on the governing system due to sluggishness and unresponsiveness of the speed setting motor has to be overcome to prevent over/ under shoot of speed set point during pressure fluctuation as well as during load transfers. The old system was upgraded to a more flexible and more reliable backup power supply scheme. Digital Power Management System involve Synchronizer, Load Sharer (both Active Power and Reactive Power) for all DG and TG are introduced; MSB were upgraded to have Close Transition Auto Transfer Switching System; Master Control Centre (PLC, Touch Screen, and SCADA) to monitor, control, and record/trending of the operation of the electrical supply system of the plant. All the data transfer using communication with Fiber Optic to minimize the data lost/delay and optimize the timing of transfer. The old design of manual synchronizing and load sharing system were upgraded to become an Intelligent Power Management System for both Diesel Generator and Turbine Generators section; Auto Transfer Switch with Communication with Master PLC for active synchronizing at ATS; Master Control Centre and SCADA. The new control system schematic as below:-
Figure 2 - New Control Schematic
Figure 3 - Operator Station after Upgrade An simplified operator interface via Master Touch
Screen were part of the upgrade system which allow single point information access, user friendly operation and also secure operation for authorize personal only. Operator Station also offer event logging and alarm logging to facilitate troubleshooting. The MSB now has ATS Function with an ATS Controller integrated and communicate with Master PLC. The ATS Controller communicates with Master PLC to allow System to match Frequency and Voltage to against Grid supply for Make before Break Transfer (Sync and Transfer). The system does not only perform the SYNC CHECK function, but it actively instructs downstream to match with the Grid. The load transfer is controlled in Soft Unload scheme. An advance turbine control system was introduced with following control functions:• manual power Set point mode • inlet pressure based Loading Control mode • Back pressure based Loading Control mode • Virtual Load Sharing Control mode These several modes allow operator to decide best mode of turbine operation with respect to plant need, when secondary heating is required, back pressure base loading control in use. Additional position transducer was introduced to prevent over/under control of speed setting motor during low pressure delay lag. This allows more responsive speed set point setting on the mechanical hydraulic governing system. The new control system also comes with an Intelligent Power Management Function to calculate the plant load and decide numbers of Diesel Generator capacity to be online. The minimum DG running is “0”, meaning TG can stand alone if the load is very low. The operation of the TG are always boiler pressure sensitive, in other word whenever the boiler pressure/furnace temperature falls, the system will automatically call in diesel generator to come online and relief the TG at all control mode. This prevents nuisance tripping due to a derated turbine and allow operator to concentrate on production process. All the operation is user friendly via a Master Control Centre Touch Screen, as well as a SCADA. The SCADA has the function of recording Alarm and Event History, Trending of all previous electrical data of all DG, TG, and ATS. This ease the management or maintenance to monitor, operate the factory DG and TG, as well as trace the status of previous operation during troubleshooting or other data retrieving purpose. The SCADA can also be linked to Management Information System (MIS) to allow analysis of plant power consumption as well as operational habits. The Intelligent Power Management System plus coupled with Transfer Switch has minimized the down time of SEDO. Where production time means Profit! Reduce tripping due to boiler fluctuation were overcome to ensure reliable in house power source while minimizing diesel consumptions, automatically done with the new control system.
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PI_SepOct_Tenaga_Case_Study_Rev.indd 75
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24/10/2012 23:08
morgan thermal ceramics case study
Superwool pluS™ inSulation iS independently teSted to have the loweSt thermal conductivity ®
M
organ Thermal Ceramics’ Superwool® Plus™ high temperature thermal insulation has been independently tested and is proven to have a thermal conductivity up to 40% lower than comparable insulation products at 1000°C. As such, it is confirmed as being more energy efficient than its alternatives, allowing users to make significant energy cost savings and reduce their carbon footprint. Superwool® Plus™ blankets of density 128 Kg/ m3, 96 Kg/m3, 80 Kg/m3, were tested against competitor blankets of density 128 Kg/m3 and 96 Kg/m3 by a French laboratory in accordance with the ASTM C201 – 93(2009) standard test method
for thermal conductivity of refractories. Results show that Superwool® Plus™ insulation has outstanding thermal conductivity, with all the Superwool® Plus™ blankets having lower thermal conductivities than competitor products. Consequently, customers can ‘drop a density’ of insulation and achieve the same high insulation performance when compared to competitor products. The lighter Superwool® Plus™ 96 kg/m3 blanket can be used in place of a competitors’ 128 kg/m3 blanket, or a Superwool® Plus™ 80 kg/m3 blanket in place of a competitors’ 96 kg/m3 blanket, enabling users to make significant weight and cost savings.
Superwool® Plus™ fibre is simple to install and delivers excellent insulation in high temperature environments with a classification temperature of 1200°C. It has high tensile strength with good handling ability and does not tear easily. Superwool® Plus™ insulation also has health and safety benefits compared to traditional refractory ceramic fibres (RCF) as it is a low bio-persistent fibre insulation and is exonerated from the carcinogen classification in the EU under the terms of Nota Q of Directive 67/548/EEC. “Third party testing of our high performance insulation provides invaluable data and proves that
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morgan thermal ceramics case study our Superwool® Plus™ blankets really do have the lowest thermal conductivity,” says Ron Wainwright, Technical Director, Morgan Thermal Ceramics. “Customers can now be assured of a high quality thermal insulation which provides exceptional energy efficiency and enables them to make associated energy cost savings,” Wainwright adds. “What’s more, the independent data backs up our own thermal conductivity values and validates the accuracy of our testing and data sheets. At Morgan Thermal Ceramics we have a long history and experience in thermal conductivity measurement and as such, our customers can be confident in our values being correct and genuinely representative.” The insulation is ideal for high temperature applications in the power and chemical processing industries. For example, it is used in various insulation applications throughout heat recovery steam generators. It is also used in high temperature processing applications to line kilns and furnaces in many industries including ceramics, iron & steel and aluminium, as well as insulation in automotive exhaust heat shields and domestic ovens. For more information about Superwool® Plus™ insulation visit http://www.morganthermalceramics. com/products/Superwool-fibre/
Graph 1 shows the thermal conductivity of Superwool Plus 128 Kg/m3 blanket compared with competitive 128 Kg/m3 blankets
Sultan plant, of Superwool Plus 80 Kg/m3 blanket Graph 3 shows theIskandar thermal power conductivity PasiraGudang, Johor compared with competitive 96 Kg/m3 blanket
Graph 2 shows the thermal conductivity of Superwool Plus 96 Kg/m3 blanket compared with competitive 128 Kg/m3 blankets
‘MorGan TherMal CeraMICS’ SuPerwool® PluS™ hIGh TeMPeraTure TherMal InSulaTIon haS been IndePendenTly TeSTed and IS Proven To have a TherMal ConduCTIvITy uP To 40% lower Than CoMParable InSulaTIon ProduCTS aT 1000°C. aS SuCh, IT IS ConfIrMed aS beInG More enerGy effICIenT Than ITS alTernaTIveS, allowInG uSerS To MaKe SIGnIfICanT enerGy CoST SavInGS and reduCe TheIr Carbon fooTPrInT.’
90 september/october 2012 power insider
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