Top Story of the Week: US, Vietnam sign nuclear trade agreement
LOOKING AHEAD
- USABC Business Mission to Indonesia - November 11-13, 2013
- USABC Business Mission to Malaysia – November 20-22, 2013
U.S. and Vietnam Sign Nuclear Trade Agreement
Among the feverish talk of an Iran nuclear deal, the United States has signed a nuclear trade agreement with Vietnam, according to Reuters. In order to build its nuclear capacity, Vietnam will deepen its energy links with Russia, who according to Reuters will help build the nation’s first nuclear power plant. According to Secretary of State John Kerry, President Obama is expected to look over the agreement and send it to Congress for approval by the end of the year. This agreement comes at a time when Vietnam’s rapid economic growth is increasing its energy demands. The production of nuclear energy is considered a mechanism to provide for the country’s increasing energy needs. The Vietnam energy market has seen an increase in foreign investment and interest. However, given Vietnam’s practice of subsidizing non-nuclear energy sources potentially lowers incentives for potential investors.
ASEAN’s Increasing Demand for Energy
Since 1990, the ASEAN region has increased its energy usage by two and half times. While the epicenter of energy shifts to the Asian region, ASEAN countries are seeking to address the environmental impacts. This month at the 2013 APEC summit, ASEAN leaders talked about its commitment addressing climate change and to reducing negative environmental impacts of energy use.
IN THIS UPDATE:
ASEAN
Pacific fuel demand is high but alternatives are in sight: ADB Islands Business 15 Oct 2013
The Pacific region’s primary energy demand is projected to more than double from 3.6 million tons of oil equivalent in 2010 to 8.8 tons of oil equivalent in 2035 at an annual rate of 3.7%, the Asian Development Bank’s (ADB) says in its latest Energy Outlook for Asia and the Pacific, which notes that while these high energy demands present significant challenges, energy efficiency and renewable energy options hold great promise. “Reliance on imported fuels for power generation hinders development in the Pacific, where electricity prices are among the highest in the world and, on average, only around 30% of households have access to electricity,” said Robert Guild, Director of the Transport, Energy and Natural Resources division in ADB’s Pacific Department. The new ADB report aims to identify policy, social, infrastructure, and technology issues that need to be addressed to meet future energy requirements of member countries and examines the impact of taking action versus operating with “business as usual” scenarios.
Asean’s growing Thirst for Energy Thailand Business News 22 Oct 2013
Energy demand in Southeast Asia has expanded by two and a half times since 1990 – and is still only about half the global average as the global energy epicenter shifts to Asia, according to a new report released this week by the International Energy Agency. Particularly troubling for the environment, energy related emissions of carbon dioxide by the 10 members of the Association of Southeast Asian Nations is expected to nearly double, reaching 2.3 gigatonnes – 2.3 billion tonnes. That bleak assessment comes just a few days after the UN’s Intergovernmental Panel on Climate Change warned that global warming, caused by greenhouse gases, is likely to accelerate and called climate change “the greatest challenge of our time.
Brunei
China, Brunei agree to seek closer maritime energy cooperation Xinhua Net 11 Oct 2013
China and Brunei said Friday that they are content with their ongoing energy cooperation and will encourage closer joint exploration and exploitation of maritime oil and gas resources. The two countries expressed their satisfaction in a joint statement released after talks between visiting Chinese Premier Li Keqiang and Bruneian Sultan Hassanal Bolkiah. Particularly, the two sides welcomed the recent signing of a deal between China National Offshore Oil Corporation and Brunei National Petroleum Company Sendirian Berhad on establishing a joint venture on oil field services. The two leaders added that they encourage their officials to study other aspects of joint exploration and exploitation of maritime oil and gas resources by relevant enterprises of the two countries in line with the principles of mutual respect, equality and mutual benefit. In the document, the two sides recognized each other as a close cooperation partner, saying they are committed to pursuing common development and prosperity. They also underscored the importance of resolving territorial and jurisdictional disputes through peaceful dialogue and consultations by sovereign states directly concerned.
Cambodia
Cambodia to feel an energy crunch, but growth to remain stable: report Phnom Penh Post 3 Oct 2013
Energy demand in Southeast Asia is expected to increase by more than 80 per cent by 2035, fuelling some $240 billion in oil spending, a new report from the International Atomic Energy Association (IAEA) shows. In its "Southeast Asia Energy Outlook" published yesterday, the Paris-based IAEA estimates that oil imports will climb to more than five million barrels per day, doubling dependency and making the region the world’s fourth-largest recipient after China, India and the EU. The increased reliance on oil in the region “will impose high costs and leave it more vulnerable to potential disruptions”, the report said, suggesting that for Association of Southeast Asian Nations (ASEAN) member states like Cambodia, which imports all its oil and has yet to tap natural resources, the price shocks could hit hard. The IAEA also noted that between 2002 and 2011, the number of people with access to electricity in Cambodia doubled. But that still leaves nine million, or 66 per cent of the population, without access. Thirteen million Cambodians, a staggering 88 per cent of the population, are relying on traditional biomass methods for cooking, according to the IAEA report. On the same day of the energy association’s gloomy outlook, the Asian Development Bank released an upbeat forecast for growth in Cambodia, keeping the rate steady at 7.2 per cent.
Indonesia
Indonesia prepares regulation to allow limited exports of minerals Antara News 18 Oct 2013
The Indonesian government is preparing a regulation which will allow limited exports of minerals by companies from 2014. Deputy Minister of Energy and Mineral Resources Susilo Siswoutomo said here on Friday his office will discuss the regulation with the Parliament. "(We will discuss) a legal umbrella for export recommendations which does not go against the law," he said. From 2014, the government will consider granting export permits to mining companies that are committed to building smelting plants, he stated. The permits will be issued for a certain period of time, until the smelters become operational. "It takes about three years to build a smelter," he explained. The government will not grant export permits from 2014 to companies that are not serious about building smelters, he added.
Indonesia’s fuel future Borneo Post 20 Oct 2013
With oil and gas imports weighing on its trade balance, Indonesia is taking steps to reduce domestic demand for fuel and boost local refinery capacity. These moves come as the International Energy Agency (IEA) has released a report projecting that energy demand in the Southeast Asian country is set to nearly double over the next two decades. Improving the trade balance Imports of oil and gas for the January to August period amounted to US$29.9 billion, while exports stood at US$21.4 billion, according to data issued by the Central Statistics Agency in early October. This US$8.3 billion gap more than accounted for the eight-month trade deficit of US$5.5 billion, a bill that could become even more expensive if the rupiah continues to lose ground against the dollar. Imports are also trending up, rising by 8.7 per cent year-on-year, while export earnings dropped by 17.3 per cent. Looking to reduce its foreign purchases of hydrocarbons, the government has implemented measures to reduce domestic consumption of fuel. These include a regulation issued in August that raises the amount of palm oil blended into biodiesel, from 7.5 to 10 per cent, a move that the deputy energy minister, Susilo Siswoutomo, said was to cut spending on oil imports. The rate will be even higher for biodiesel used by power plants, where the mandatory level of palm oil has been raised to 20 per cent.
Indonesia's Geothermal Energy Potential May Be Tapped from 2014 Indonesia Investments 22 Oct 2013
Good news for Indonesia's geothermal power potential. The Indonesian government is getting closer to issuing a new law that will make it easier for investors to tap the country's huge geothermal energy potential. A committee of Indonesia's House of Representatives (DPR) supports a bill that was proposed by the government, which aims to spur investments in the country's geothermal energy sector through providing a better legal framework. Indonesia is estimated to contain the world's largest geothermal energy reserves. Despite having 40 percent of the world's total geothermal potential, Indonesia only utilizes about four to five percent of its vast geothermal reserves. The main problem for geothermal energy development in Indonesia is the legal framework. Currently, geothermal activities are lawfully defined as 'mining activities' (Law No. 27 2003), which implies that it is prohibited to be conducted in protected forest and conservation areas (Law No. 41 1999), even though geothermal mining activities have a small impact on the environment (compared to other mining activities). However, about 60 percent of Indonesia's geothermal energy is located in soils beneath protected forest and conservation areas and thus is prohibited to be extracted. The government of Indonesia has only recently realized the potential of geothermal energy in the country and is therefore yet to create a conducive climate, in particular a sound legal framework. If this new bill is approved by a plenary meeting in April 2014 then it is expected to give a boost to the country's geothermal energy exploration and exploitation.
Geothermal Bill Step Closer to Law The Jakarta Globe 22 Oct 2013
A special committee at the House of Representatives approved on Monday the geothermal bill proposed by the government, which would make it a step closer to becoming law, as the nation seeks to wean itself from reliance on fossil fuel to produce electricity. All of the nine factions in the committee supported the bill, and all of the speakers highlighted the country’s enormous geothermal potential, the need to attract investment, and the inadequacy of the current geothermal law.
Laos
Laos pushes ahead with Mekong dam without consulting neighbours Reuters 3 Oct 2013
Laos is to forge ahead with a second hydro power dam on the Mekong river, side-stepping its commitment to consult its downstream neighbours before starting work. Laos on Monday notified the Mekong River Commission (MRC), a consultative body that works with lower basin countries - Thailand, Vietnam, Laos and Cambodia - of its intent to build the 260-megawatt Don Sahong Dam, despite calls from foreign donors to consult neighbours that face a risk of depleted fish stocks and damaged livelihoods. The four countries are bound by a treaty to hold inter-governmental consultations before building any dams. "This is a shared river and the dam will bring devastation to Laos' neighbours ... they should demand that Laos undergo the consultation process," Ame Trandem, Southeast Asia Program Director for International Rivers, said in an interview. Officials from Thailand, Cambodia and Vietnam were not immediately available for comment. The three countries have repeatedly voiced concern about Laos failing to honour a consultation agreement on a bigger project, the $3.5 billion, 1,260 megawatt Xayaburi dam, for which it held a groundbreaking ceremony late last year.
China becomes biggest investor in Laos Global Times 21 Oct 2013
China was Laos' largest foreign investor in the first 11 months of the 2012-2013 financial year with over $1.33 billion worth of projects, Lao state- run news agency reported on Monday. During the period, Thailand was the second biggest foreign investor with $416 million, according to Lao Ministry of Planning and Investment (MPI). The energy sector received most of the investment with $1.56 billion, followed by mining sector with $1.09 billion, said the MPI. The largest energy investment was poured into the construction of the Nam Ngiep 1 hydropower project in Borikhamxay province with over $868 million. Building of the dam will start in 2014 with construction expected to be completed by 2019. The dam will have a capacity of 290 megawatts. The Lao government set a target of 8 percent annual GDP growth rate, which requires investment of at least $1.7 billion
Laos seeks investor-operators for micro-hydropower projects Hydro world 22 Oct 2013
Laos' Institute of Renewable Energy Promotion (IREP) seeks bids to become investor-operator of two micro-hydropower projects in Laos' Houaphan Province. A pre-bid meeting is set October 31, with a site visit November 7-8 and bids due November 29. With financing from the World Bank's International Development Association, IREP, a unit of the Ministry of Energy and Mines seeks investor-operators to build and operate micro-hydro systems through a public-private partnership in areas where the national grid is not expected to reach in the near future.
Malaysia
Petronas makes Malaysia Canada's largest foreign direct investor The Star Online 18 Oct 2013
DAEGU, South Korea: North America has pushed Australia out of the top spot for new Asian investment in gas development, with most of the supply from existing Australian projects sold off and buyers hunting for cheaper fuel, industry executives said this week. Australia has been for the past several years the global hotspot for Asian gas investors, with $190 billion in liquefied natural gas (LNG) developments under way to take advantage of its proximity to top buyers such as Japan and South Korea. Malaysia's state oil firm Petronas recently became Canada's largest foreign direct investor with its $35 billion plan to develop shale gas assets and build an LNG export terminal in British Columbia. But its seven current projects have been parcelled out to off-takers and equity stakeholders, and no new projects are expected to move forward within the next year. That slowdown and the pull of cheap, abundant North American shale gas has turned heads towards projects just setting up for development in the United States and Canada that are aiming to fill Asia's still burgeoning LNG demand. "The cost of Australian grassroot projects is going up ... so probably we need to pause," said Shigeru Muraki, chief executive of the energy solution division at Tokyo Gas, speaking at the World Energy Conference in South Korea. "We're now moving to the U.S. We've already invested in two gas fields - one in Dallas and the other inCanada."
Malaysia puts nuclear plans on hold The Malay Mail 18 Oct 2013
Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili gave one of the clearest signals so far that his government will shelve plans to build nuclear-power plants, despite rising energy needs driven by economic and population growth, the Wall Street Journal reported today. Maximus told the house during question time that various studies need to be carried out to look into the ability and readiness of the country to manage a nuclear plant. “The sentiment at the moment is not quite in favor [of nuclear power], and we need to get a lot more buy-in,” he was quoted by WSJ as saying. A final decision will likely be made in about six months, the minister said, adding that the priority is to use existing resources before considering new options like nuclear power.
Gas: Fueling the future of energy Borneo Post 20 Oct 2013
As global demand for energy grows in tandem with the rapid growth of population particularly in urban areas, energy players such as the oil and gas (O&G) industry are constantly looking for ways to meet this demand by expanding its portfolio to mitigate the dependability on declining natural resources. “For Malaysia, the foremost energy challenge lies in meeting rising demand, whilst at the same time domestic production continues to experience natural decline,” Petroliam Nasional Bhd (Petronas) chief executive officer Tan Sri Shamsul Azhar Abbas said in Petronas ‘Our Energy Future’ report.
Myanmar
Demand for energy will double: ADB Myanmar Times 20 Oct 2013
Energy demand in Myanmar is expected to double by 2035 as economic progress continues, according to a report issued last week by the Asian Development Bank. Energy demand is expected to rise at an annual rate of 3 percent on the heels of a growing need for electricity throughout the country, according to the regional report Energy Outlook for Asia and the Pacific. As of 2010, energy consumption in Myanmar per capita was among the lowest in the region, at just 0.29 tonne of oil equivalent (toe), compared to a regional average of 0.92toe. The government has stated that only about 30pc of Myanmar’s population has access to electricity. “While Myanmar is on the way to developing its potential, the country is expected to see soaring demand for electricity, which is a fundamental input to every modern economy,” the report states. Of the total amount of energy consumed, the residential, commercial, agricultural and fisheries industries will see a decline from 82.9pc in 2010 to 64.6pc as energy will be utilised elsewhere, the report states, adding that transportation is expected to account for 23.4pc of total energy consumption in 2035. “Income growth will boost the country’s motorisation, which entails fast growth of energy demand in the transport sector at a rate of 7.5pc per year,” it continues.
Myanmar-to-China gas pipeline fully cope Channel News Asia 21 Oct 2013
A pipeline pumping natural gas from Myanmar to energy-hungry China has gone fully operational, state-run Chinese media said on Monday. The project, stretching more than 2,500 kilometres from western Myanmar to southwest China, will help the world's second-largest economy feed its growing energy needs. It comes as close political ties between the two nations have weakened, after Myanmar's quasi-civilian regime took office in 2011 and brought in sweeping reforms that have led to the scrapping of most Western sanctions. The pipeline, first launched in July after three years of construction, "has gone into full operation on Sunday", the Global Times reported. It runs from Kyaukpyu on the west coast of Myanmar and will deliver gas to Myanmar and China's energy-deprived southwest, including Yunnan, Guizhou, Chongqing and Guangxi.
Philippines
World Bank to hike energy loan for PH Manila Standard 15 Oct 2013
The World Bank plans to lend an additional $44 million from the Clean Technology Fund for electric cooperatives and renewable energy projects in the Philippines, a bank official said over the weekend. World Bank senior energy specialist Alan Townsend said the loan would help expand the capacity of the Electric Cooperative Partial Credit Guarantee or EC-PCG Program to include renewable energy projects. “That $44 million will help support $500 million in lending to electric cooperatives for network expansion and renewable energy. It will be only for ECs,” Townsend told reporters. Townsend said the $44-million loan under the Philippines Renewable Energy Development was approved by the Clean Technology Fund but was still waiting for final approval of the World Bank board “which could happen in the next few months.” “There’s no liability of government in the program. There’s no contingent liability. If there’s a payout, the CTF will have a right of recovery but not from the government but from the EC,” Townsend said.
Japanese, Korean firms investing in energy sector Manila Standard 21 Oct 2013
Japanese and Korean power players are exploring more investment opportunities in the Philippines and are open to joint venture partnerships with local players, an energy official said Friday. Energy Secretary Carlos Jericho Petilla told reporters Korea Electric Power Corp. and Japanese firms Mitsubishi Corp. and Mitsui & Co. Ltd. were now studying investment opportunities in the country. “Kepco is serious about putting more capacity and they are scouting for locations. Marubeni and Mitsui of Japan are also doing the same thing,” Petilla said, who returned from South Korea and Japan where he led a business mission recently. Kepco officials earlier expressed interest in expanding its presence in the Visayas. Kepco owns the 200-MW Cebu coal-fired power plant in Naga which started operations in 2011. The Naga coal project was constructed by Kepco SPC Power Corp., a joint venture of Kepco Philippines and SPC Power Corp., under a build-operate-own scheme.
Aquino urged to stop pushing coal power plants Inquirer News 22 Oct 2013
A civil society network advocating for reforms to help the country adapt to climate change expressed dismay on Tuesday, over the Aquino administration’s push for coal-fired power plants, and renewed its call on government to tap cleaner and less wasteful sources of energy. Aksyon Klima Pilipinas, in a statement, said it was disappointed with the apparent priority given to coal by government in supplying the country’s energy needs. “We are dismayed to see the government’s renewable energy plans go to waste in favor of dirty and harmful energy. Our message is simple: Coal will cost us the climate, which in turn will cost all of us our lives and livelihoods,” Voltaire Alferez, national coordinator of Aksyon Klima, said.
Singapore
Singapore to make investment decision on Jurong Island LPG project in 6 months Platts 14 Oct 2013
Singapore will make an investment decision on a world-scale LPG plant on Jurong Island in the next six months, the city-state's Economic Development Board said late Friday. "Jurong Island V2.0 is a strategic, multi-agency, multi-partner initiative to ensure the continued sustainability and competitiveness of Singapore's energy and chemicals industry. The LPG terminal is part of this effort," Eugene Leong, director, energy & chemicals at EDB told Platts. "We are in advanced discussions with industry stakeholders to invest in a world-scale LPG plant and are working towards an investment decision over the next six months," he said via email, without disclosing further details.
Sports Hub goes green with solar panels at new National Stadium Straits Times 16 Oct 2013
The upcoming Singapore Sports Hub is turning to solar energy to meet some of its electricity needs. Solar panels will be installed across an area of approximately 7,000sq m at the much anticipated sporting arena in Kallang, which is expected to open in April next year. The panels will generate 707 kilowatts-peak (kWp) of electricity, enough to offset the energy used by the cooling system at the new 55,000 capacity stadium. The panels will be designed and constructed by solar energy firm Phoenix Solar. It has signed a 21-year solar energy purchase agreement with the Sports Hub, ensuring that the arena has stable electricity prices over that period. Other major organisations that have recently opted for solar power in a big way include the Housing Board which last month called its largest solar-leasing tender to date, for a company to own and operate panels on some 125 blocks in Ang Mo Kio, Sengkang, Serangoon North and Buangkok.
Thailand
Industry sector to boost Thailand's energy demand: ADB The Nation 15 Oct 2013
Thailand's final energy demand is projected to grow at 2.3 per cent per year between 2010 and 2035, driven mostly by the rising demand from the industry sector, according to a report by the Asian Development Bank (ADB). The demand will rise from 84.6 million tonnes of oil equivalent in 2010 to 147.9Mtoe in 2035, the ADB said in the new report "Energy Outlook for Asia and the Pacific". According to the report, the Asia-Pacific region as a whole will need a cumulative investment of about US$11.7 trillion (Bt366 trillion) in the energy sector in the 25-year period to 2035 to meet energy demand in the business-as-usual (BAU) case. The projection for Thailand is based on the BAU case and the economic growth projection. Over the outlook period, Thailand's GDP is projected to increase from $187.5 billion in 2010 to $573.5 billion in 2035 with an average annual growth rate of 4.6 per cent.
Thailand to amend power development plan to focus on coal over gas Platts McGraw Hill 22 Oct 2013
An amendment to Thailand's power development plan will prioritize coal as the preferred fuel for power generation and recommend stepping up imports of hydropower from neighboring countries, the Ministry of Energy's Energy Policy and Planning Office said Monday. The amendments are due to be made before the year, EPPO director general Samerjai Suksumek said. The head of the Department of Mining and Petroleum Engineering's post-graduate program at Thailand's Chulalongkorn University, Jirawat Chewaroungroaj, said local gas reserves could not meet the country's energy needs even if production increased, so there was no question Thailand needed to change its energy consumption ratio in the long term.
Nuclear, coal plants seen as options in new Power Development Plan The Nation 22 Oct 2013
Thailand may welcome more coal-fired power plants and even nuclear power in the next 20 years under the new Power Development Plan, according to the newly appointed director-general of the Energy Policy and Planning Office. Samerjai Suksumek said yesterday that more coal and nuclear plants were among the options in the PDP 2013 (2013-2033) to reduce the country's dependence on natural gas. Under the current PDP, Thailand aimed to generate 13,000 megawatts from natural gas. Under the first option in the new plan, coal and nuclear would take on 2,000MW from natural gas, along with additional power purchases from neighbouring countries. Samerjai believes this option would ensure that the average electricity cost during the 20-year period would be Bt4.50 per unit, lower than cited in the previous plan, thanks to the lower cost of coal and nuclear. In the second option, in which nuclear power is ruled out, the 2,000MW would be generated by renewable energy sources such as Napier grass.
Vietnam
US, Vietnam sign nuclear trade agreement Reuters 10 Oct 2013
The United States and Vietnam on Thursday signed a pact that would allow the transfer of nuclear technology to the Southeast Asian nation and open the way for U.S. investment in the burgeoning industry, in another sign that Washington is seeking stronger economic and strategic ties in the region. U.S. Secretary of State John Kerry said the U.S.-Vietnam Civil Nuclear Cooperation Agreement would allow U.S. firms to tap Vietnam's future nuclear power market, although the State Department said the deal will not allow Vietnam to enrich or reprocess U.S.-origin nuclear materials. "This agreement will create numerous opportunities for our businesses," Kerry told Vietnam's Foreign Minister Pham Binh Minh on the sidelines of an Asian summit in Brunei. "Obviously our nuclear cooperation is quite significant." Vietnam is working with Russia to build its first nuclear plant in 2014 for completion in 2020 in the south-central province of Ninh Thuan, as demand for energy grows rapidly in response to economic growth of around 5 percent a year. It has also signed an agreement with a Japanese consortium to develop a second nuclear power plant in the same province, with two reactors to become operational in 2024-2025. Vietnam has the second-largest market after China for nuclear power in East Asia, which was expected to grow to $50 billion by 2030, according to Kerry.
With U.S. Deal in Place, Vietnam's Nuclear Power Plans Still Face Hurdles Global Journal 17 Oct 2013
Vietnam's domestic nuclear-energy plans continue to face hurdles following last week's completion of an atomic trade accord between Hanoi and Washington, the Associated Press reported on Thursday. The Southeast Asian country's anticipated $50 billion nuclear industry has attracted tentative interest from companies based in Japan, Russia, South Korea and the United States. However, Vietnam's practice of subsidizing costs for electricity from non-nuclear sources has lowered incentives for possible atomic-power funders from abroad to invest. The nation also has postponed initial assembly of its first two nuclear energy sites until 2017, a three-year schedule bump, the head of the Vietnam Agency for Radiation and Nuclear Safety and Control recently told AP. The potential for accidents is another cause for worry. Vietnam intends to build its first nuclear-power reactor in a province particularly vulnerable to tsunamis, the type of flood event that dealt significant damage to Japan's Fukushima Daiichi atomic energy facility in 2011. However, the Vietnamese nuclear chief said all of his country's planned atomic sites would fall in line with global-safety practices.