|Energy Update | October 4, 2018
Authors: Riley Smith, Ella Duangkaew, Monica Chritton, Bryan Yeoh
|THE COUNCIL'S TAKE|
Updates on the Development of the Renewable Energy Industries in Vietnam and Myanmar
Both Vietnam and Myanmar are undertaking efforts to spur further development in their respective renewable energy industries. Hydropower currently dominates Vietnam’s electricity generating capacity, at 38% in 2015. However, the Government of Vietnam aims to reduce this percentage while increasing that of solar and wind in the coming decade; overall, Vietnam has committed to generating 18GW of power from wind and solar by 2030. While Vietnam is at the stage of attempting to find a Feed-in-Tariff (FiT) rate for these renewable sources that is sustainable and attractive to foreign investors, Myanmar is in the early stages and has recently committed to drafting a renewable energy law.
On September 10, in a bid to increase the competitiveness of Vietnam’s wind power industry, Prime Minister Nguyen Xuan Phuc approved the amendment and revision of the wind Feed-in-Tariff (FiT) in Decision No. 37/2011/QD-TTg, which will increase the tariff rates to 8.5 US cents/ kWh for onshore and 9.8 US cents/kWh for offshore. Previously, the FiT for wind was 7.8 US cent/KWh. The increased rates are still lower than those of other Southeast Asian countries. However, they nonetheless indicate that the Government is aware of and attempting to address the commercial risks that have caused foreign companies to hesitate in financing wind power projects in the country. The rate increase is an attractive signal for foreign investment in the country’s wind market. According to the ASEAN Centre for Energy’s June 2018 “ASEAN Feed-in-Tariff (FiT) Mechanism Report,” Vietnam is one of five ASEAN member states that has enabled FiT implementation. Vietnam has enabled FiT implementation for hydro, solar, wind and biomass renewable energy technologies and is studying and exploring FiT in biogas and geothermal energy technologies. Vietnam is the only member state to have local government policies for implementation of renewable energy projects, according to the report.
Myanmar’s Ministry of Electricity and Energy (MOEE) is also aiming to develop its renewable energy industry and is currently drafting a renewable energy law to spur this development. Aiming to generate 8% of the country’s electricity from renewable sources by 2021, MOEE will prioritize developing solar energy assets first, then wind energy. MOEE hopes to increase this percentage to 12% by 2025. The MOEE’s Chief Engineer, U Maung Maung Kyaw, said that the country has plenty of natural resources, especially in solar and wind power, but lacks policy structure to drive growth in renewable energy, according to The Myanmar Times. One solar power plant, which will have a generating capacity of 170MW, is already under construction in Minbu, Magway Region. The construction of two other solar power plants, one in Myingyan and another in Wundwin, each with a generating capacity of 150MW, is expected to start soon. Following his appointment last year, Minister for Electricity and Energy U Win Khaing has prioritized meeting electricity demand over the short-to-medium term, as it is projected that Myanmar will need to double its current electricity supply by 2020 to meet rising demand from businesses and households. Though the role of non-hydro renewables in the country’s energy mix over this period of time will be smaller than that of hydropower, natural gas, and coal, a formalized strategy for how to develop the sector and better integrate it into the power generation mix will help grow renewables’ role over the coming decades.
Singapore Parliament Expands Powers of Energy Market Authority
The Energy Market Authority (EMA) now has more authority to act in the event of an imminent shortage under changes to the Gas Act and the Electricity Act. EMA can now direct companies to take measures in the event of an emergency with approval from the Trade and Industry Minister. These measures include reallocating gas from users with alternative fuels and entering into, modifying, or terminating contractual agreements. Other additions to EMA’s functions and power include dealing with health dangers from importing gas, imposing fines for meter tempering and dishonest consumption of gas and electricity.
These additional powers come after Singapore experienced one of its worst blackouts in September when power-generating units tripped one after another. During debate of the amendments, lawmakers referenced the blackout last month as a reminder of the need to ensure energy security and highlighted vulnerabilities of a centralized system.
Thailand’s Energy Reform Plan Set for First Steps of Implementation by End of 2018
The first stages of Thailand’s latest Energy Reform Plan (ERP) are expected to be rolled out before the end of the year, according to the National Energy Reform Committee. Originally issued in January 2018, the latest ERP aims to increase private sector participation in the energy sector, especially in renewable energy, and achieve full deregulation of the sector over the next two decades. The National Reform Steering Assembly issued the ERP just at the end of last year, after spending over two years drafting it.
The main focus of the latest ERP is increasing energy production and security. One way that the plan aims to support electricity generation and the increased utilization of renewable energy sources is by deregulating peer-to-peer power trading. By relaxing the commitments of private power purchase agreements, the ERP enables small power producers such as residential and commercial buildings to sell power back to the grid. One way in which residences, communities, and commercial buildings can sell electricity back to the grid is through the use of rooftop solar installations, meaning the ERP ends up making an economic case for the increased use of renewable energy. Other additions in the latest ERP include the establishment of a one-stop-shop for granting licenses to gas operators and power plants, a new building code that requires higher energy efficiency and saving standards, and a shift towards the widespread use of compressed natural gas in the transport sector. In the longer run, the new ERP includes a fourth phase of large-scale petrochemical investment in the Eastern Economic Corridor, a push for the utilization of electric vehicles, and encouraging the use of energy storage systems. Eventually, the Government also aims to consolidate the Electricity Generating Authority of Thailand (Egat), the Metropolitan Electricity Authority, and the Provincial Electricity Authority into a single entity.
The most recent ERP is actually the third such initiative since the 1990s, when Thailand sought to deregulate the oil and electricity industries and privatize the state’s energy enterprises. The second ERP was implemented in the 2010s and aimed to increase the utilization of renewable energy sources. According to Pornchai Rujiprapa, Chairman of the National Energy Reform Committee, the energy sector represents 20% of the country’s economic value, necessitating the periodic review of the Government’s energy sector policies to ensure that economic activity and momentum can be sustained. Referring to the importance of the latest ERP, Nantika Thangsuphanich, Deputy Permanent Secretary of Energy, said it is especially needed at this time due to delays in petroleum exploration and production activities and the development of new power plants.
Laos PM Announces Resumption of Hydropower Dam Projects
On September 12, Laos Prime Minister Thongloun Sisolith announced at a World Economic Forum on ASEAN (WEF-ASEAN) panel that Laos will continue moving forward with its hydropower dam building, but with intensified scrutiny and greater study of wind and solar power. The Prime Minister also said he did not agree with the “battery” of Southeast Asia label that has been widely used to describe the country’s ambitions to supply its neighbors’ growing energy needs and double its energy production by 2020. The decision to resume hydropower dam building indicates that Laos continues to prioritize economic growth over environmental precaution. The World Bank estimates that Laos’ GDP will grow 6.7%, which is above average for the ASEAN region. The energy sector, especially now that hydropower dam building will start again, is likely to be an important contributor to this growth.
The Prime Minister’s remarks at the WEF-ASEAN follow the catastrophic dam collapse in the Attapeu province on July 24 that released 5 billion cubic meters of water and caused widespread damage to 13 villages, leaving 35 dead, according to official government numbers (see our previous Update on the dam collapse here for more detail). The Laos government took several strong measures in response, including announcing that it would suspend all new hydropower dam projects, renew the inspection of existing ones with a special task force and establish an additional special task force designated with managing national crises (see the previous Update on the government response here for more detail).
Despite research demonstrating that continued hydropower dam development may be costly and pose continued environmental risks for the country, the Prime Minister’s decision to continue such development is unsurprising given the importance of the energy sector as a growth market for Laos. The sector became particularly important following the historic signing of the tripartite electricity sharing agreement with Malaysia and Thailand (see the Council’s previous Update here for more detail). Energy will continue to be a complicated issue for the Laos and its neighbors given the tension that exists between Laos’ energy needs and policies and environmental concerns.
CSR Book for 2018 Mission to the ASEAN Ministers on Energy Meeting (AMEM)
In place of the regular CSR book that we prepare for the Council's annual mission to the ASEAN Ministers on Energy Meeting (AMEM), the Council would like to use this year’s CSR book to highlight how our member companies have contributed to human capital and capability development in the energy sector in various ASEAN countries. We have chosen to highlight this aspect of CSR this year because of member company interest and the fact that it supports one of the overarching themes of mission – promoting U.S. companies as a source of expertise in human capital development, especially in the adoption and use of new technologies and processes that improve energy sector operations. You can submit CSR information in two ways. When registering for the mission (here), you have the option to upload your CSR material directly, using the provided template. You may also send your CSR material to Riley Smith at firstname.lastname@example.org. If you have any questions about the requested CSR material or the 2018 Mission to AMEM, please contact Riley Smith.
Call for Sponsorship for Report on the Effects of Digitalization on ASEAN’s Energy Sector
The US-ASEAN Business Council, in conjunction with the ASEAN Centre for Energy, is soliciting sponsorship for a publication that will examine the trend of digitalization in ASEAN's energy sector. The main goal is for the report to highlight the best practices and recommendations of our members companies that have had to adapt to digitalization in the energy sector. We also want the report to serve as a stepping stone to deeper engagement with the ASEAN Energy Ministers during the annual ASEAN Ministers on Energy Meeting (AMEM). Specifically, with the support of ACE, we aim to present the report at the 37th AMEM in September 2019. The report is also meant to feed into future projects examining how the digitalization trend can help ASEAN achieve the key goals of the ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025.
The report will include:
For more information on the report and sponsorship opportunities, please contact Riley Smith at email@example.com.
|IN THIS UPDATE|
The cost of cooling down The ASEAN Post 24th Sep 2018
Energy, marine facilities in Asia brace for Super Typhoon Mangkhut S&P Global 14th Sep 2018
Energy-hungry Cambodia shows no sign of backing down on coal Eco-Business 27th Sep 2018
Phnom Penh looks to go green in its war on waste Phnom Penh Post 21st Sep 2018
USAID Awards Tetra Tech $21 Million Contract for Sustainable Landscape Management and Biodiversity Conservation in Cambodia Financial Post 18th Sep 2018
Pertamina operates avtur depot in West Kalimantan's airport The Jakarta Post 2nd Oct 2018
Pertamina EP Finds New Oil Gas Reserves Tempo 27th Sep 2018
Indonesia imports more fuel in 2018 The Jakarta Post 27th Sep 2018
UPDATE 1-Indonesia 2018 coal output target now around 507 mln T - Energy Ministry Reuters 27th Sep 2018
Indonesia eyes higher power consumption rate Asian Power 26th Sep 2018
Indonesian coal exports hobbled amid local constraints The Business Times 20th Sep 2018
Indonesia's 'Paris of Java' on high-tech mission to cut emissions The Straits Times 20th Sep 2018
#Bersihkanindonesia movement fights against fossil energy dependence Antara News 19th Sep 2018
The 100 percent renewables energy is reachable, says Wartsila Electric Light & Power 18th Sep 2018
PLN told to convert fossil diesel power plants to CPO-diesel fuel The Jakarta Post 18th Sep 2018
Higher oil price to boost state revenue, increase subsidies The Jakarta Post 18th Sep 2018
Drilling to start of 2nd well for Baturraden/ Gunung Slamet geothermal project Think GeoEnergy - Geothermal Energy News 14th Sep 2018
Stakeholder Forum Debates Proposed Pak Lay Project, Recommends Steps To Strengthen Basin Planning In The Mekong Lao News Agency 24th Sep 2018
Chinese company completes transmission lines project in Laos Global Times 15th Sep 2018
Malaysia's Tenaga Nasional in talks to increase stake in green energy firms DealStreetAsia 27th Sep 2018
Yeo: Cheaper loans for renewable energy initiatives New Straits Times 25th Sep 2018
Sapura Energy bags contracts worth RM815mil The Star Online 24th Sep 2018
Sarawak Energy eyes other RE sources The Edge Markets 20th Sep 2018
Dr M: 'We won't use nuclear power' New Straits Times 19th Sep 2018
Malaysia sets new goal of 20% clean energy generation by 2030 The Edge Markets 18th Sep 2018
Govt to reactivate MyPower as part of industry reform New Straits Times 18th Sep 2018
20% royalty won’t hurt investment BorneoPost Online 18th Sep 2018
Malaysia against nuclear power due to radioactive waste disposal issues, says Dr M The Star Online 18th Sep 2018
Local fuel prices increase by over 17% in four months following dollar appreciation Eleven Myanmar 27th Sep 2018
Govt. spends K600 B from its budget annually to supply electricity Eleven Myanmar 26th Sep 2018
Bangladesh wants Chinese hydro power thru Myanmar Bangladesh wants Chinese hydro power thru Myanmar 25th Sep 2018
Fifth gas discovery in Myanmar offshore Block A-6 The Myanmar Times 24th Sep 2018
Ministry to distribute LPG to one million households in 2020 Eleven Myanmar 23rd Sep 2018
Coal plan sparks ire as Myanmar struggles to keep lights on LAKELAND OBSERVER 23rd Sep 2018
Renewable energy law in the works to speed up development The Myanmar Times 19th Sep 2018
Parliament Approves $300M ADB Loan to Upgrade Power Grid The Irrawaddy 19th Sep 2018
Qinzhou transmission station starts supplying China-Myanmar pipeline Interfax Global Energy 17th Sep 2018
PPA for hydropower signed The Myanmar Times 14th Sep 2018
Tigyit coal-fired power plant not harmful to public: Energy Ministry Eleven Myanmar 14th Sep 2018
PCCI pushes grant of power subsidies philstar.com 29th Sep 2018
Senate OKs creation of world-class PH energy think tank Inquirer.net 24th Sep 2018
DOF: Mining royalty remains on gov’t agenda Inquirer.net 21st Sep 2018
Philippines' Aboitiz to buy stake in Ayala's thermal unit for $579 mln Reuters 27th Sep 2018
Gov’t sets road show in London BusinessWorld 24th Sep 2018
H1 oil import bill up 32.8% on high prices, weak peso BusinessMirror 21st Sep 2018
DOE pushes oil, gas exploration with new contracting round BusinessMirror 20th Sep 2018
Matchmaking to produce tie ups between microgrid developers, co-ops BusinessWorld 19th Sep 2018
ABB in multi-million Philippines geothermal deal Power Engineering International 18th Sep 2018
After disaster, Philippines to review all small-scale mining proposals The Star Online 18th Sep 2018
Parliament: Greater power for energy regulator to tackle disruption of gas supply The Straits Times 1st Oct 2018
Parliament: Two power-generating units that tripped, causing September blackout, had been properly maintained The Straits Times 1st Oct 2018
Singapore consumers can choose electricity provider from November Channel NewsAsia 21st Sep 2018
Ensuring energy security also vital: Tan Wu Meng The Straits Times 21st Sep 2018
Despite Tuesday’s blackout, Singapore’s power backup procedures are in place: Chan Chun Sing Channel NewsAsia 21st Sep 2018
Singapore bunker fuel premiums surge on sharp recovery in crude S&P Global 19th Sep 2018
Sembcorp inks 20-year deal to supply solar power to Facebook's Singapore operations The Straits Times 18th Sep 2018
Call for further power plants Bangkok Post 3rd Oct 2018
Energy reform plan ready for action Bangkok Post 22nd Sep 2018
Analysis: Thailand excels as most flexible sweet crude buyer in Southeast Asia S&P Global Platts 21st Sep 2018
Electric vehicles on the fast track in Thailand Inquirer 19th Sep 2018
BOI approves 160 billion baht in investment Pattaya Mail 15th Sep 2018
Solar and wind power get a boost in Vietnam Asian Power 26th Sep 2018
Construction launched on 39-MW solar project in Vietnam Renewables Now 25th Sep 2018
Vietnam to increase environment tax on fuel VnExpress International 21st Sep 2018
Work starts on US$49.75 million solar power plant in Long An Nhan Dan Online 21st Sep 2018
Việt Nam’s clean energy in need of a just transition Viet Nam News 19th Sep 2018
Vietnam Electricity revises up 2017 pre-tax profit to US$350 million Hanoi Times 19th Sep 2018
National consultation talks Pak Lay hydropower project of Laos Vietnam Plus 18th Sep 2018
Laos’ hydropower policy puts Vietnam in a dilemma VietNamNet 18th Sep 2018