Issue 334
17•November•2015
Week 46
™™
Coal ambitions
The Philippines is unlikely to achieve its energy targets, as bureaucracy and
an inefficient grid hold back reform
™™
Market reforms
Large-scale challenges remain for Indonesia’s power sector, despite some
positive developments. The government needs a more coherent strategy
™™
Indian debts
India’s rescue package for debt-ridden discoms could cut debt by
US$57.5 billion by 2019
™™
Tax bill
BHP Billiton is challenging a US$205 million royalty bill from the
Queensland government
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Week 46 17•November•2015
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Contents
AsiaElec
COMMENTARY
Philippines’ coal ambitions unlikely to create reliable power supplies
4
mar k et commentary
Indonesia needs more coherent power reforms
6
grid
India to take over discom debts
7
t h erma l
MHPS wins South Korea gas turbines deal
8
coa l
Adani gains IEA support for mine
BHP Billiton fights Queensland tax bill
US, Japan agree to cut support for coal
Pakistan to offer sovereign guarantee for Thar coal project
China continues to cut coal and electricity output in October
8
9
9
10
10
n u c l ear
Toshiba confirms US unit Westinghouse’s huge losses
11
rene w a b l e s
JFE Engineering wins waste-to-energy plant deal in Myanmar
11
News in brief
12
o u r c u s tomer s 20
Have a question or comment? Contact the editor – Richard Lockhart (richardl@newsbase.com)
Copyright © 2015 NewsBase Ltd. All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes
internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
Week 46 17•November•2015
w w w. N E W S B A S E . c o m
P3
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C o m m e n ta r y
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Philippines’ coal ambitions
unlikely to create reliable
power supplies
The Philippines is unlikely to achieve its energy targets, as bureaucracy, an inefficient grid
and population growth hold back efforts to provide universal access, writes Graham Lees
philippines
W h at:
The Philippines aims
to use imported coal
to provide power to
keep pace with 5-7%
economic growth, but will
not reach its capacity
targets
W h y:
Political infighting, a
weak grid and a slow
approvals process will
hold back development
W h at n e x t:
The government needs
to attract investors and
ensure adequate coal
supply if the power
system is to cope with
demand
While much attention has been focused on
emerging power and coal markets in India and
other Asian developing economies, the sprawling and often dysfunctional multi-islanded
Philippines is quietly but urgently attempting to
build up its generating capacity by opting for coal
as the main fuel.
Reports now suggest that coal consumption
in the Philippines will grow by more than 70%
over the next 20 years, rising to 35 million tonnes
per year. Much of this will have to be imported
– unless the country can quickly develop its currently small mining industry.
These rising imports are part of a belated
central government attempt to raise the Philippines electricity production to prevent economic
growth from stalling.
GDP growth has been running at between 5%
and 7% in the last few years but is being hampered by frequent brownouts affecting industry,
offices and homes.
“Given rising electricity and industrial
demand, the Philippines is expected to significantly expand its status as a net importer of coal,
which currently is mainly from Indonesia,” the
International Energy Agency (IEA) said in its
2015 Southeast Asia Energy Outlook.
The expected sharp rise in coal demand is
needed to feed dozens of coal-fired thermal
power plants (TPPs) presently on the drawing
board to meet electricity demand to support an
economy that is growing at between 5% and 7%
a year.
The question is: will these drawing board
plans move into construction? Some analysts
have doubts.
Political deadlock
State bureaucracy, coupled with government
indecision, has contributed to the growth in
generating capacity and underinvestment in
transmission infrastructure. This has particularly crippled Luzon, the most heavily populated
island that includes the capital Manila.
P4
The situation became so haphazard one year
ago that President Benigno Aquino sought
emergency powers to deal with expected energy
shortages in the first half of 2015.
The special powers would have allowed him
to order short-term, quick-fix mobile gas or diesel-fuelled power units to keep key regions such
as Luzon functioning.
But in a classic example of lack of resolve,
coupled with politicking, the two-chamber
national Congress was still debating the issue six
months later.
Instead, Department of Energy (DOE) Secretary Jericho Petilla appeared on prime-time
television urging Filipinos to save electricity by
switching off lights or buying more energy-efficient bulbs.
All the same, brownouts began occurring
throughout Luzon and other regions earlier this
year owing to “very thin reserves and delays in
the operation of some upcoming new power
plants,” The Philippine Star noted. The brownouts were caused by the shutdown of two key
plants for essential maintenance.
Congress never did grant Aquino emergency
powers.
Total national installed capacity is only about
18,000 MW, which is way below that of other
large Southeast Asian countries with smaller
populations. Thailand, for example, with about
67 million people, has nearly double that capacity at 31,000 MW. Vietnam, with 92 million
people, is projected to have an installed capacity
above 35,000 MW by this year’s end, state power
enterprise EVN said in October.
Department of Energy
Secretary Jericho Petilla
President Benigno
Aquino has
been unable to
gain emergency
powers from
Congress to deal
with the energy
crisis
Changing targets
The Manila government may finally be waking
up to the equation between economic growth
and adequate power supply.
The DOE last year unveiled a plan to raise
installed capacity by 5,000 MW between 2014
and 2017. But in June this year Energy Secretary Petilla raised this goal significantly when
w w w. N E W S B A S E . c o m
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C o m m e n ta r y
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The Mauban coal-fired
TPP
Source: Philippine Coal
Plant Users Group
he outlined a new target and plans to fast-track
the construction of 25 coal-fired TPPs by 2018,
boosting capacity by 12,200 MW.
If all this materialises, the Philippines’
national installed capacity would jump to above
30,000 MW before 2020. Only one year ago the
DOE was talking about achieving capacity of
26,000 MW by 2030. To achieve the 2018 goal,
Manila will need to iron out its approvals process
for plant development, as well as attract investors and ensure adequate coal supply. More than
15 million tonnes of the 20 million tonnes consumed in 2014 was imported.
What should work in the Philippines’ favour
is the bigger involvement of domestic private
enterprise than is the case in many other Southeast Asian countries, where state-controlled
power companies dominate.
Big business participants include San Miguel,
better known for brewing beer.
Grid problems
The problem is not just about generating enough
electricity, though. The Philippines lacks a
proper national grid to distribute it.
While vague plans are under discussion for
Malaysia’s Sabah State to engage in cross-border power trade with the Philippines’ closest
island, Palawan, there is still no transmission
link between the Philippines’ two main islands,
Luzon and Mindanao.
Developing an inter-island grid system will
require “huge capital expenditure,” a study by
KPMG last year said.
Meanwhile, a study in July this year by IHS
drew attention to the danger of over-reliance on
coal for power generation, noting that on present
planning projections more than 75% of Luzon’s
electricity would be fuelled by coal by 2030.
Such dependency on coal, probably using
Week 46 17•November•2015
sub-critical plant technology, would present
health and environmental risks for over-populated regions, IHS’s Sustainable Energy Transition for the Philippines study said.
It also warned that opting for coal as the main
driver of power growth risked maintaining electricity shortages for longer because “coal projects
are prone to slippages due to the complex nature
of project approvals and developments.”
“The Philippines has a balanced fuel mix
today but an uncertain balanced energy future.
The Philippines is on the path to having the
highest coal share in Asia, despite the Department of Energy’s aspiration for a balanced fuel
mix. If coal projects are implemented as planned,
Luzon’s coal generation share will be over 75 percent by 2030 and many coal plants will be uneconomic as a result of low utilisation,” IHS said.
Diversification
After Indonesia, the Philippines has the best
potential in Asia for tapping into geothermal
energy, but development has been sluggish and
the IEA forecasts only marginal growth of this
segment in the next 20 years.
The Manila government is being prodded
into action in large part because the Philippines
has the highest birth rate in East Asia. The population has increased by 20 million since 2000,
and is forecast by the World Bank to expand 46%
between now and 2040 to reach 144 million.
At present more than 20 million people out
of the current population of 99 million have no
access to grid electricity, which is bad news for an
economy currently enjoying fast growth.
Despite the potential, and the involvement
of the private sector, NewsBase expects that the
Philippines will continue to muddle along and
millions of Filipinos will remain in the dark for
years to come.v
w w w. N E W S B A S E . c o m
The Philippines
is on the path
to having the
highest coal
share in Asia
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m a r k e t c o m m e n ta r y
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Indonesia needs more
coherent power reforms
Large-scale challenges remain for Indonesia’s power sector, despite some positive
development. The government needs a much more coherent strategy, writes David Flanagan
indonesia
W h at:
Indonesia lack a clear
strategy to develop a
mature power market
W h y:
Government policy
is confused and
changeable, despite
recent successful
innovations
W h at n e x t:
The country must take
advantage of cheap
coal, recent investment
success and strong power
revenues to develop an
investor-friendly policy
Indonesia has all the potential attributes of a
finely tuned energy sector. Rich in coal and gas,
it has been a mainstay of supply of raw materials to neighbouring states in Asia, hungry for
resources to build their economies.
Accompanying strong energy reserves, it has
vigorous economic growth and a 7% increase in
annual power demand.
To accommodate the explosive growth in
power demand, reformist Indonesian President
Joko Widodo, elected just over one year ago, has
embarked on an expansion programme that
aims to raise generating capacity to 90,000 MW.
Yet political confusion has obscured the
debate on how and where to build new power
plants. The ambitious plans are unachievable,
some politicians think, while others dispute that
such grand designs are needed anyway.
Practical problems are hampering Indonesia’s
plan to develop a mature power market.
Observers consider that progress in rural
electrification has been slow, while ambitious
objectives to expand generating capacity are
ineffective without an adequate power grid.
This means that the power market will not
mature in terms of functionality.
Meanwhile, the government has failed to
drive a consistent coal policy, with some producers increasing output and others cutting back.
As a result, the government has no clear strategy for building new installed capacity, and the
delays in reaching agreement have created an
increased risk of outages.
Yet against this backdrop of political uncertainty and lack of consistency, some modest
signs of progress are starting to emerge.
State-owned utility PLN was able to post
strong 2014 revenues on the back of higher
demand for power despite a falling government
subsidy. It also managed to turn a loss in 2013
into a profit in 2014. As fuel input costs are likely
to fall, 2015 may see further profits.
This development of a more stable state power
group that can more readily stand on its own
feet is a powerful indicator, encouraging market
observers and participants that Indonesia is serious about the future of its power market.
Recent innovations
Meanwhile, the country is also developing innovative power supplies in remote regions.
State gas utility PGN is now importing LNG
P6
through a floating storage and regasification unit
(FSRU), known as Lampung LNG, as gas-fired
generation expands and domestic production is
diverted from export to industry.
PGN sells the gas to power plants on Sumatra. The island has little industrial demand for
gas but needs to fuel for power generation.
Furthermore, the long-established Arun
LNG export plant has been converted to handle
imported LNG.
These new power plants and a number of
renewables projects are being developed by independents as well as PLN.
Independent wind operator UPC Renewables is developing the 50-MW Samas wind farm,
where construction will start in 2016, and the
70-MW Sidrap project, which is now under construction. Both plants are due to start operations
in 2017. UPC, in collaboration with Binatek
Energi Terbarukan, aims to build 1,500 MW of
wind capacity.
The Samas wind farm has a power purchase
agreement (PPA) in place with PLN, which was
signed in May 2015.
This was the first such deal for a large wind
project, and has upgraded Indonesia’s relationships with independent power producers (IPPs)
to international commercial standards. The
Sidrap wind farm also signed a PPA in August
2015.
UPC also aims to develop 2,000 MW of
wind capacity in China and 500 MW in the
Philippines.
This improved performance from PLN and
sound commercial relations with IPPs will slowly
but steadily support the evolution of Indonesia’s
power market.
A range of
infrastructure
is needed
to facilitate
trading, such as
underwater power
interconnectors
between islands
Continuing challenges
Yet challenges remain. Indonesia must work to
develop a unified grid. If the differing grid needs
of Indonesia’s remote region are not addressed
early enough, different standards and cost structures will emerge, which will mean that Indonesia could move towards several internal markets
for power.
Hence a range of infrastructure is needed
to facilitate trading, such as underwater power
interconnectors between islands.
Another major question for Indonesia’s
economy lies in how the slowdown in China will
affect conditions in the region.
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Week 46 17•November•2015
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So far, lower growth rates and China’s focus
on its domestic economy could lead to weaker
economic performance for other regional
players.
One reason for low coal prices in Asia is China’s efforts to replace imported coal with locally
produced fuel. Low prices and a trend towards
import substitution are not such good news for
big coal producers in the region such as Indonesia and Australia.
At least in Indonesia’s case, the preponderance of cheap coal on the global market means
that it is financially efficient to devote more of its
coal to domestic power generation needs.
Overall policy
Indonesia must concentrate upon the development of an overall energy policy which reconciles objectives in the power market with other
elements of energy policy.
It must find a way to unite all participants
with common objectives. Although no longer a
significant oil producer, Indonesia is expected to
rejoin OPEC in December. This will add a further set of negotiations, targets and other additional obligations to Indonesia’s policymakers.
While Indonesia is struggling to create a
coherent energy strategy, there are some glimmers of hope emerging from the current gloomy
situation.
PLN is achieving better financial results. The
successful turnaround of Indonesia’s gas market
position is under way and cheap coal may divert
domestic resources more efficiently towards
power generation.
Also, renewables is gaining greater credibility
and attracting investment.
Indonesia must build on these modest but
clear successes and continue to strive towards
a constructive and coherent market strategy. v
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Political
confusion has
obscured the
debate on how
and where to
build new power
plants
gr i d
India to take over discom debts
india
India’s rescue package for debt-ridden distribution companies (discoms) should save the
power sector 1.8 trillion rupees (US$27.2 billion) per year and cut debt by 3.8 trilling rupees
(US$57.5 billion) by 2019.
The debts are to be taken over by state governments, while the energy ministry will push
forward efficiency reforms, reduce electricity
thefts in a bid to avoid tariff rises.
Indian Power and Coal Minister Piyush
Goyal said that the country’s state governments,
which own the discoms, had welcomed the new
initiative as the best way to deal with the discoms’ debts to Indian banks of 4.3 trillion rupees
(US$65 billion).
“It is a bottom-up approach, not a topdown approach. The states will be assisted and
‘hand-held’ to bring down the cost of power by
improving discoms distribution, transmission
and sub-transmission network, reducing the
cost of power through coal rationalisation and
also bringing down the interest cost,” Goyal said.
The package, known as Ujjwal Discom Assurance Yojana (Uday), involves a massive bailout
Week 46 17•November•2015
scheme for the discoms, alongside measures to
reduce power thefts, align consumer tariffs with
generation costs and promote energy efficiency.
State governments are to be allowed to take
over 75% of discoms’ debts and pay back the
creditors with cash raised from bond sales. This
will not affect the fiscal deficit. The other 25%
will be paid back through bonds issues by state
electricity boards.
India’s banks are currently owed 4.3 trillion
rupees (US$65 billion) by the discoms.
Goyal added that neither state-run Power
Finance Corporation nor Rural Electrification
Corporation, which lent US$20 billion to discoms, would be forced to buy the bonds, which
will be sold in the open market.
“This scheme offers the discoms a chance
to break out of the decade-old vicious cycle of
operational losses being funded by bank debt by
transferring debt to state governments, reducing
aggregate technical and commercial (AT&C)
losses and lowering of the gap between average
cost of supply and average revenue per unit,” he
said. v
w w w. N E W S B A S E . c o m
K e y Fa c t s :
•India’s state govts are
to take on the discoms’
US$65bn debts
•Discoms must promote
efficiency and reduce
theft
•New Delhi wants to
avoid higher tariff
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thermal
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MHPS wins South Korea
gas turbines deal
japan
Mitsubishi Hitachi Power Systems (MHPS)
has won an order to install one of its H-25 gas
turbines and a generator in a South Korea petrochemical facility.
The installation will enable Korea Petrochemical (KPIC) to increase power generation
and thereby production capacity at its Onsan
ethylene plant in southeastern Korea.
The company is looking to step up its production capacity of ethylene from 470,000 tonnes
per year to 800,000 tonnes per year. MHPS is
anticipated to install and commission the power
generation system at the plant in June 2017.
The contract is the latest in a series of power
generation contracts won by MHPS in South
Korea for its workhorse heavy duty gas turbines.
Power plant construction projects in Korea,
involving gas turbines, have increased in recent
years, and the country has become one of
MHPS’s most important markets.
The collective power output of projects using
these gas turbines has reached 13,000 MW in
the past five years, of which MHPS has been
awarded 8,500 MW.
In addition to the KPIC installation, the
company is also putting in two M501J gas turbines, which are the core components of combined cycle gas turbine (CCGT) power plants,
and a steam turbine at the new 950-MW Pyeongtaek CCGT power plant. This contract brings
to sixteen the number of J series gas turbines
orders from South Korea.
The combined cycle power plant is to be built
by Shin Pyeongtaek Power, a special purpose
company (SPC) established by Korea Western Power (KOWEPO), GS Energy and other
companies.
The plant is slated to commence operations in
November 2019 and the power generated will be
sold to Korea Power Exchange (KPX) and serve
to support power demand in the capital and the
surrounding area.
MHPS is also supplying an M501J gas turbine
for the Chuncheon Cogeneration Power Plant in
South Korea.
When completed in May 2017, the plant,
which is located approximately 100 km east of
Seoul, the capital, will generate an output of 470
MW. It will supply power to an industrial park
that is being newly developed. v
MHPS is expected
to install and
commission the
power generation
system at the
plant in June
2017
coal
Adani gains IEA support for mine
india
P8
Indian industrialist Gautam Adani has gained
the support of the International Energy Agency
(IEA) for the Carmichael mine in Queensland Galilee Basin despite opposition from
environmentalists.
The IEA said that the planned US$16 billion
mine, scheduled to produce 60 million tonnes
per year, was an attractive prospect for supplying
future demand in Asia.
High-quality, lower polluting Queensland
coal will be a preferred choice over Indonesian
supplies as newer super-critical plants are built in
India, which the IEA forecasts will soon become
the world’s biggest coal importer.
The IEA’s 2015 World Energy Outlook
expects Australia’s coal exports to grow by more
than a third to 424 million tonnes per year by
2040. India and Southeast Asia will be the chief
markets.
“The [IEA] 2015 World Energy Outlook
endorses Indian group Adani Mining’s controversial Carmichael coal mine in the Galilee Basin
in Queensland – a target of anti-coal activists
who say the vast Galilee Basin coal reserves need
to stay in the ground to help avoid dangerous climate change,” the Australian Financial Review
said.
The Carmichael mine has been subject to several delays by court action from environmental
NGOs campaigning against coal mining on
global warming grounds.
The Adani project finally received a green
light from the Australian federal environment
minister in October.
But a number of major banks, under pressure
from groups such as Greenpeace, have said they
will not provide loan finance.
Just last week a new legal challenge against
Carmichael was made by the Australian Conservation Foundation, claiming the federal approval
was flawed.
“It is one thing for a project’s approval to be
challenged. It is quite another to wait for previous challenges to fail, then launch new ones on
different grounds over and over again, seeking
endless delay and endlessly abusing process,”
a spokesman for Adani Group told Australia’s
Mining Weekly. v
w w w. N E W S B A S E . c o m
timeline:
2015:The IEA claims the
Carmichael mine
is needed to supply
future Asian demand
2020:The IEA expects
Australia to overtake
Indonesia as the
world’s biggest coal
exporter
2040:The IEA forecasts
Australian exports
to reach 424 million
tonnes
Week 46 17•November•2015
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BHP Billiton fights Queensland tax bill
australia
BHP Billiton is challenging a A$288 million
(US$205 million) royalty bill from the Queensland government related to coal the company
sold through its Singapore marketing hub.
Brisbane argued that the amount BHP should
pay in royalties should be calculated based on the
price its marketing arm, BHP Billiton Marketing AG (BMAG), pays for coal at BHP mines in
Queensland.
The Swiss subsidiary, which is located in Singapore, buys coal from BHP Billiton and then
resells it to end buyers in China or other countries for a higher price.
BHP Billiton argues that royalty payments
should be based on the price BMAG is paid for
the coal in Singapore, where it pays lower corporate tax.
Four BHP subsidiaries lodged last week an
application with the Supreme Court of Queensland over a royalty assessment issued last month
by the Office of State Revenue.
The assessment relates to BHP’s share of coal
mined in Queensland under a joint venture with
Japan’s Mitsubishi between July 1, 2005 and
December 31, 2012.
It calls for payments of A$186 million
(US$132 million) in royalties and A$102 million
(US$72 million) in interest, according to BHP,
which says it has already paid A$2.4 billion
(US$1.7 million) in Queensland state royalties
for the period in question.
“We believe the Office of State Revenue is
seeking to reassess royalty amounts based on retrospective laws as well as levy interest in excess of
market rates on the disputed amounts,” BHP’s tax
head Jane Michie said in a statement.
It is not known whether Mitsubishi is also
facing an enlarged royalty bill over its half of the
BHP joint venture, which operates eight coal
mines in central Queensland and produces more
than 50 million tonnes of coal per year.
Between July 2005, when BMAG started
operations in Singapore, and 2014, the marketing company bought minerals from BHP operations in Australia and elsewhere for US$210
billion and then resold them for US$235 billion.
Once shipping and other costs of US$25 billion are stripped out, BMAG made a profit in
Singapore of US$5.7 billion. This profit was tax
free in the city state, although BHP paid 46% tax
on it in Australia.
An initial hearing by the Queensland
Supreme Court on BHP’s application is scheduled to take place on December 4. v
Once shipping
and other costs
of US$25 billion
are stripped
out, BMAG
made a profit
in Singapore of
US$5.7 billion
US, Japan agree to cut support for coal
japan
The US and Japanese governments struck a
deal last week to cut their financial support for
exports of coal and coal technology.
The agreement between the two countries,
which have long supported overseas buyers of
their coal-mining and coal-fired thermal power
plant (TPP) equipment via low-cost government-backed finance, appears to be aimed at
easing Paris climate talks slated for next month.
The talks will focus on getting all Organisation for Economic Co-operation and Development (OECD) countries to agree to cut their
financial support for coal exports. Japan provides more government-backed finance for the
coal industry than any country in the world.
If a deal is reached at Paris and implemented,
the “vast majority” of the approximately 1,000
coal-fired power plants currently planned
around the world would no longer qualify for
cheap government-backed credit, an unnamed
source told the Financial Times.
This would equate to billions of dollars of
lost finance for the global coal industry at a
time when it is already reeling amid plunging
commodity prices. Only the cleanest coal-fired
power plants would be eligible for assistance and
only in cases where renewables were not viable.
Week 46 17•November•2015
Japan’s domestic power industry was also
dealt a blow last week when the country’s environment minister, Tamayo Marukawa, said she
would not support two new coal-fired TPPs
planned by Kansai Electric Power unit Kanden
Energy Solution.
The projects include a 1,300-MW TPP that
Kanden is planning in Akita Prefecture together
with partner Marubeni, and a 1,000-MW TPP
it is aiming to build in Chiba Prefecture with
TonenGeneral Sekiyu.
Japan’s power industry set itself a voluntary
goal in July to cut greenhouse gas (GHG) emissions by 35% by 2030 from 2013 levels. The environment ministry has, however, been calling for
more specific measures and rules in order to hit
the target.
“The voluntary framework needs more
work,” Marukawa said on November 13. “I can’t
endorse the projects at this point.”
Ultimately, however, the environment ministry has no real power over whether coal projects
go head. This is a matter for Japan’s Ministry of
Economy, Trade and Industry (METI) to decide.
v
w w w. N E W S B A S E . c o m
k e y fa c t s :
•US and Japan aim to
persuade all OECD
countries to cut
support for coal
•The move is trying
to ease December’s
climate change talks
•The Japanese
environment minister
has vetoed two new
coal-fired TPPs
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coal
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Pakistan to offer sovereign
guarantee for Thar coal project
pakistan
The Pakistani Finance Ministry has agreed
to offer a sovereign guarantee for the Thar
coal-mining project after it failed to raise funds
from private developers.
The ministry said on November 10 that it
had approved the financing terms for a US$500
million rupee loan and had issued a guarantee
for a US$200 million foreign currency loan. The
combined US$700 million will be used to back
the Thar project.
“[A] sovereign guarantee for the project will
be issued by the Pakistan government after cabinet approval,” a senior ministry official said.
The approval will now pave the way for the
mine developer, Sindh Engro Coal Mining Co.
(SECMC), to achieve financial closure for the
project, which involves an estimated investment
of over US$900 million.
The foreign currency component of the Thar
loan will be provided by a consortium of Chinese
banks led by the China Development Bank.
A consortium of local banks that includes
HBL, UBL and Bank Alfalah have agreed to lend
50 billion rupees (US$500 million) – one of the
largest project financing deals in recent years – to
the developer.
The Chinese and local banks have insisted
on the sovereign guarantee for the loans being
extended to the Thar project because of the
precarious condition of the Pakistani economy.
Almost all credit rating agencies have
assigned a poor rating for the South Asian state.
Fitch Ratings said in a recent report that the
country’s economic fundamentals were “weak,”
even compared with similar rated peers, on the
grounds of underdevelopment, political instability and weak public finances.
SECMC, a joint venture between the Sindh
government (51%) and five private companies
(49%) led by Engrow Powergen, is preparing to
develop the country’s first open-cast coal mine
in the natural resource-rich Tharparkar district,
with initial production capacity of 3.8 million
tonnes per year.
The development plan also includes building a 660-MW (2x330-MW) coal-fired thermal
power plant (TPP) near the mine. This project
involves an estimated investment of around
US$1 billion.
The developer intends to expand capacity of
coal production from the Thar project to 13.5
million tonnes per year, and power generation
to 2,400 MW.
Pakistan, which is facing a power supply
shortage of over 7,000 MW, intends to increase
capacity to 20,000 MW by 2020 from the current
level of 16,000 MW. v
K e y Fa c t s :
•Pakistan is to offer a
sovereign guarantee
for a US$300m loan to
fund the Thar project
•Chinese banks are to
lend the money and
have insisted on govt
backing
•The Thar project could
eventually have 2,400
MW of capacity
China continues to cut coal and
electricity output in October
china
P10
China continued to reduce coal and electricity output in October, as slow economic activity
and the government’s call for more clean energy
usage caused many small mines and coal-fired
thermal projects to cut output.
China produced 316.95 million tonnes of
coal in October, 1.2% less than in October 2014,
bringing total output for the first 10 months this
year to 3.05 billion tonnes, a 3.6% year-on-year
fall, according to data from the National Bureau
of Statistics. Shaanxi Province produced 42 million tonnes of coal in October, down 7.5%. Output from January to October fell 4.2% year on
year to 400 million tonnes.
In the same month, China generated 445.4
billion kWh of electricity, down 3.2% year on
year, while output in the first 10 months fell by
6.6% year on year to 4.651 trillion kWh, down
by 0.1% year on year.
In October alone, thermal units produced
310.7 billion kWh, down 6.6% year on year.
From January to October, thermal output
reached 3,466 trillion kWh, down 2.6% year on
year and 75% of total production.
China has been cutting coal production and
coal-based power generation since last year.
The government now forecasts that 2015
coal production will be slightly above 3.6 billion
tonnes, down from last year’s 3.87 billion tonnes.
The country has been closing small mines
and thermal power units in recent years in order
to rein in coal production and promote non-fossil fuels in order to cut pollution, especially in
coastal cities.v
w w w. N E W S B A S E . c o m
K e y Fa c t s :
•China produced 316.95
million tonnes of coal
in October, a 1.2% fall
•Thermal power output
dropped by 3.2%
to 445.4bn kWh in
October
•The govt forecasts 2015
coal production at
3.6bn tonnes
Week 46 17•November•2015
AsiaElec
n u cl e a r
AsiaElec
Toshiba confirms US unit
Westinghouse’s huge losses
japan
Scandal-hit Toshiba confirmed that its US
nuclear subsidiary, Westinghouse Electric, had
booked a combined 160 billion yen (US$1.3 billion) in impairment losses for the 2012 and 2013
fiscal years.
According to Toshiba, Westinghouse
incurred impairment losses of about 110 billion
yen (US$900 million) in fiscal 2012 and about
50 billion yen (US$400 million) in fiscal 2013,
which ended in March 2014. As a result, Westinghouse posted net losses in both fiscal years.
Westinghouse’s massive impairment losses
came amid increased uncertainty over its business environment following the 2011 disaster at
Tokyo Electric Power Co.’s (TEPCO) Fukushima
No.1 nuclear power plant (NPP).
Toshiba has previously not disclosed the
details of its nuclear business performance.
Toshiba also has not reflected the impairment
losses at Westinghouse in its consolidated earnings report.
Toshiba claims that Westinghouse’s overall
profitability is high, as the US unit is performing
well in its business related to the replacement of
fuel rods at existing NPPs and other operations.
The Japanese industrial conglomerate, which
makes everything from batteries to nuclear reactors, has overstated its group operating profits
for several years. Accounting irregularities have
made the company’s money-losing operations
appear profitable.
Toshiba is one of Japan’s three NPP manufacturers, along with Hitachi and Mitsubishi Heavy
Industries (MHI).
In January 2013, Toshiba acquired Shaw
Group’s 20% stake in Westinghouse for about
125 billion yen (US$1 billion), boosting its overall stake in the US nuclear power company from
67% to 87%.
Japanese heavy machinery maker IHI and
Kazatomprom also hold stakes in Westinghouse
of 3% and 10% respectively.
Toshiba said on October 28 that Westinghouse had agreed to acquire CB&I Stone & Webster (CB&I S&W) to promote its nuclear projects
in the US and China. v
K e y Fa c t s :
•Westinghouse Electric
recorded US$1.3bn in
impairment losses for
2012 and 2013
•The company suffered
from the Fukushima
disaster
•Toshiba has been
overstating its profits
its recent years
renewables
JFE Engineering wins waste-toenergy plant deal in Myanmar
myanmar
JFE Engineering, the engineering arm of JFE
Holdings, Japan’s second biggest steelmaker,
has won a contract to design and build the first
waste-to-energy plant in Myanmar.
The contract was awarded by the government
of Yangon, Myanmar’s biggest city and former
capital, JFE Engineering said on November 12,
without disclosing the value of the deal.
Under the contract, JFE Engineering will
design and build a waste-to-energy plant with
a waste incineration treatment capacity of 60
tonnes per day and an electricity generation
capacity of 700 kW.
The waste-to-energy plant is scheduled to
be completed in Yangon’s Shwe Pyi Thar Industrial Zone in 2017 and operated by the Yangon
municipal government, JFE Engineering said.
“At present, Yangon City discharges approximately 1,600 tonnes per day of waste, but this is
buried directly in landfills. Thus it is an urgent
challenge to construct appropriate treatment
facilities which can respond to the increasing
Week 46 17•November•2015
volume of waste accompanying Myanmar’s rapid
economic development,” the Japanese company
said in a statement.
The waste-to-energy plant project, which will
cut energy-related carbon dioxide (CO2) emissions by about 2,400 tonnes per year, is the first to
be carried out in Myanmar under the so-called
joint crediting mechanism (JCM), JFE Engineering said.
The JCM is a bilateral offset credit mechanism that Japan has been pushing for.
The JCM allows Japan to earn cheap carbon
credits in return for helping developing countries reduce CO2 and other greenhouse gas
(GHG) emissions.
JFE Engineering is stepping up efforts to
win orders for waste-to-energy plants around
the world. It signed an agreement in November
2014 to acquire a 100% stake in Standardkessel
Power Systems Holding (SPSH), a major German waste-to-energy and biomass power plant
construction company. v
w w w. N E W S B A S E . c o m
The waste-toenergy plant
project is the
first to be carried
out in Myanmar
under the
joint crediting
mechanism
P11
AsiaElec
News in brief
AsiaElec
Promoters of RGPPL plan to
India, UK civil nuclear deal NTPC refuses to buy
infuse funds in beleaguered
may progress
expensive natural gas from utility
GAIL
POLICY
India and UK civil nuclear pact might witness
“some progress” during Prime Minister
Narendra Modi’s visit to Britain a day after
Diwali. Civil nuclear co-operation and
defence are going to be the main focus areas
of this visit in terms of big-ticket deals and
investments, sources said. Foreign secretary
S Jaishankar also hinted that, “there could
be something” with UK on civil nuclear
deal under the larger gambit of energy cooperation. Although he asserted that the
deal with India will be different from what
the multi-million pound nuclear deal UK
is planning to have with China. Last week
British foreign secretary Philip Hammond
had said a “package of deliverables” will be
announced when Modi visits there.
“Different countries do things in different
ways. As the Indian economy has a very large
and important private sector, many of the
deals will be commercial and private sector
deals rather than government to government
deals,” he added. The nuclear co-operation
was agreed on July 2010. Modi will be meeting
Cameron twice during his two-day visit there.
This is a first by any Indian Prime Minister.
BUSINESS LINE (INDIA), November 10, 2015
SU P P LY
State-run companies NTPC Ltd and GAIL
(India) are at loggerheads with the former
refusing to buy natural gas from the latter,
even though the two have a long-term supply
contract in place. Based on the existing
contract, NTPC is supposed to buy around
2 mcm per day of LNG from GAIL. For the
current year, the contract price for this gas was
fixed at close to US$11-12 per mBtu. However,
NPTC has failed to pick up any of this
contracted gas so far this year, leaving GAIL,
which sources the gas from a third party, in a
spot. “More than 60% of the default (deferred
offtakes of gas volume by various companies)
is because of NTPC,” said executive directorfinance and accounts at GAIL, RC Gupta.
“Gail has a binding take-or-pay contract
with NTPC for offtake of 2 mcm per day of
RLNG till December 2019. However, there has
been practically no withdrawal of gas under
the contract by NTPC in the current fiscal. As
these issues are contractual, discussions are on
between GAIL and NTPC for resolution,” said
a GAIL spokesperson.
MINT (INDIA), November 13, 2015
The promoters of Ratnagiri Gas and Power
(RGPPL) and its lenders plan to infuse as
much as 20 billion rupees in the beleaguered
utility after the regulator cleared the way for
the Indian Railways to buy electricity from the
gas-based plant.
The funds from State Bank of India, ICICI
Bank, IDBI Bank and promoters NTPC and
GAIL will be used to hike capacity of the LNG
terminal to five million tonnes by 2018 from
three million tonnes currently, upgrade the
plant system and build a breakwater so that
the terminal can operate throughout the year.
“We are hoping that the firing up of the
plant will happen by November 15. We
were awaiting the CERC (Central Electricity
Regulatory Commission) order that has been
issued. Now, we expect MERC (Maharashtra
Electricity Regulatory Commission) to notify
the order,” an SBI official said. “Once the plant
starts functioning, the fresh fund infusion will
be to the tune of 20 billion rupees.”
The CERC issued an order on November
5 according deemed licensee status to the
Indian Railways, paving the way for it to
procure 500 MW of electricity from RGPPL
as it will now be exempt from cross-subsidy
surcharge.
ECONOMIC TIMES (INDIA), November 14, 2015
T H E R MA L
CLP Power hopes to start
work on new gas-fired
generation unit next year
CLP Power hopes to begin work on one
additional gas-fired generation unit at its
Black Point plant in the second half of next
year as it aims to meet the government’s new
future electricity mix for 2020. lEarlier this
year, the utility, which supplies power to
Kowloon and the New Territories - submitted
a project profile for an environmental permit
for the construction of “up to two” 600-MWclass natural-gas-fired units. It currently
operates eight.
But managing director Paul Poon Wai-yin
said the company now estimates only one
more will be needed to meet the government’s
target of having 50% of the city’s electricity
come from natural gas generation in five
years.
P12
w w w. N E W S B A S E . c o m
Week 46 17•November•2015
AsiaElec
News in brief
AsiaElec
Coal India’s second quarter
net profit rises 16%
“Previous plans for two units was a
conservative forecast for this long-term
investment,” he said. “After a year of research,
we believe one unit is enough to meet the
fuel mix needs ... we hope the unit can be
commissioned by 2020.”
SOUTH CHINA MORNING POST (CHINA),
November 17, 2015
C OA L
Australian coal company
draws up its goal for
2018/19 sales
On November 16, Whitehaven Coal,
Australia, made it clear that it drew up its
goal (based on a 100% interest, hereinafter
the same) for sales of saleable coal in full year
2018/19 (one year ending 30 June 2019) to be
26 million tonnes. The goal for sales by coal
type is 9 million tonnes of metallurgical coal
and 17 million tonnes of thermal coal.
The planned sales volume ratio by
destination for metallurgical coal is 45% for
India, 25% for Japan, 15% for South Korea
and 15% for Taiwan, and the same for thermal
coal is 50% for Japan, 25% for South Korea,
15% for Southeast Asia and 10% for Taiwan.
Whitehaven Coal’s coal sales volume in
full year 2014/15 was about 14 million tonnes.
Hence, the Company’s coal sales volume is
expected to be up by 12 million tonnes over a
period of the coming four years.
TEX ENERGY (US), November 16, 2015
China’s coal demand
rebounds slightly upon heat
supply
Coal consumption has entered its peak season
due to starting supply to the heating system in
northern China, which makes analysts believe
Week 46 17•November•2015
that coal demand would pick up steadily in
the following two months, according to a
report by cnstock.com. However, coal prices
still showed downward trend recently. The
latest Bohai-Rim Steam-Coal Price Index
benchmark power coal price dropped 3 yuan
per tonne to average at 376 yuan per tonne
November 4-11. Favourable factors such
as winter heat supply demand, decreased
hydropower in southern China as well as
coal-power negotiation would help push up
coal price but future coal price changes would
still depend heavily on weather conditions,
experts say.
Larger coal producers including Shenhua
Group, China National Coal Group, Datong
Coal Mine Group and Inner Mongolia Yitai
Group have recently reached consensus that
they would try to stabilise coal prices in the
market and would not cut coal price before
year end, according to a source close to the
China National Coal Association (CNCA).
The rising coal demand in the following
months is likely to help push up coal prices
by 5-10 yuan per tonne but the still weak
coal market would depend a great deal
upon weather conditions, according to Xu
Liang, deputy secretary general with coal
construction society of the CNCA.
XINHUA FINANCE (CHINA), November 16, 2015
China Shenhua announces
decline in coal sales
China Shenhua announced that the
production of commercial coal for the first ten
months of 2015 amounted to approximately
234 million tonnes, down 9.2% year-on-year.
During the period, its coal sales amounted
to roughly 305 million tonnes, down 18.8%
yearly.
In October, the production of commercial
coal was around 23.2 million tonnes, down
1.3% yearly. The sales were around 26.4
million tonnes, down 23.9% yearly.
AASTOCKS FINANCIAL NEWS (HONG KONG),
November 16, 2015
w w w. N E W S B A S E . c o m
Coal India’s quarterly profit rose 16% as
government support helped the world’s
biggest miner of the fuel boost production.
Net income climbed to 25.4 billion rupees
(US$385 million) in the three months ended
30 September from 21.9 billion rupees a
year earlier, the Kolkata-based company
said on November 13. That trails the 26.5
billion rupees median of 24 analyst estimates
compiled by Bloomberg. Sales rose 8%
to 169.6 billion rupees from 156.8 billion
rupees. “The increase in earnings is largely
due to the higher production and offtake
during the current period compared to the
corresponding period in the previous year,”
CIL said.
Coal production during the second quarter
of the current fiscal was 108.20 million
tonnes as against 102.42 million tonnes for
the second quarter of the previous year, the
statement said. Prime Minister Narendra
Modi, who is focusing on strengthening the
nation’s infrastructure to attract overseas
investors into the country, has called for
consistent supplies of coal to industry and
power plants to reduce imports. The state-run
miner, under pressure from the government
to double its output in the next five years, is
pushing for record production and shipments
this year.
MINT (INDIA), November 13, 2015
Coal India to build 1,600MW power plant in Odisha
Going ahead with its plan to set up a
100-billion-rupees power plant in Odisha,
state-run miner Coal India in this fiscal will
appoint a consultant who would provide help
in setting up the project. “We would appoint
a consultant in the current fiscal which would
help us in providing modalities for setting up
of 100-billion-rupees power plant,” Mahanadi
Coalfields (MCL) Chairman and Managing
Director A K Jha said.
Coal India-arm Mahanadi Coalfields will
set up the 1,600-MW super critical thermal
power plant in Sundargarh district of Odisha.
The 2x800-MW plant at the mouth of a coal
field in the Mahanadi basin will mark the
coal producer’s foray into the power sector.
Jha said the company is looking at setting up
power plants at mines from where evacuation
of coal in the absence of road and rail
transport infrastructure is difficult. Stating
that the preliminary work for the proposed
power project has already begun, Jha said
P13
AsiaElec
that the land for the plant has been identified
and the process for obtaining coal linkages is
underway.
He further said CIL has set production
target of 550 million tonnes for 2015-16 and
MCL’s share will be 150 million tonnes. MCL
had earlier said it wished to set up a 2x800
MW pit-head super critical thermal power
plant in the vicinity of the BasundharaGarjanbahal coal mines with a joint venture
partner.
PTI (INDIA), November 16, 2015
India may end coal imports
by 2017
India would not have to import coal by
2017, except to meet the requirements of
coastal power plants, as a result of several
measures initiated by the government, even
as a comprehensive energy policy is being
worked out. “By 2017, India should not need
to import coal except for those coastal plants
where it is very difficult to transmit coal. I am
fairly confident the era of shortages is over,”
coal and power minister Piyush Goyal said.
Oil Minister Dharmendra Pradhan said the
government is working on a comprehensive
energy policy with NITI Aayog, which will
elaborate about energy mix of the country till
2050.
India imported 212 million tonnes of coal
in 2014-15. But imports have been declining
for the fourth consecutive month in October
by 5% to 14.5 million tonnes from the
year-ago period. In September, coal imports
dropped by more than 27% to 12.6 million
tonnes on a rise in domestic production.
India is the third-largest producer of coal after
China and the US with 299 billion tonnes of
resources and 123 billion tonnes of proven
reserves, which may last for over 100 years.
The government has set a target of 1.5 billion
tonnes of coal production by 2020.
News in brief
operation in February 2012 and the third one
in June 2013. The preparation capacity of raw
coal at the respective CHPP is 5 mtpa each.
So, UHG coal mine currently has 15 mtpa of
preparation capacity of raw coal.
However, the coal production at UHG
coal mine has been in the doldrums since
the year 2014. In fact, the coal production
volume in the calendar year 2014 was 3.387
million tonnes, down by as much as 4.208
million tonnes (55.4%) from the prior year,
the breakdown of which was 2.445 million
tonnes (down by 53.9% from the prior year)
of metallurgical coal and 942,000 tonnes
of thermal coal (middling coal) (down by
58.8%).
TEX ENERGY (US), November 16, 2015
120, 000 tonnes of Russian
coal to be imported by
South Korea
According to the information from South
Korea, POSCO in this country will import
a total of 120,000 tonnes of Russian
metallurgical coal via the port of Rajin in
North Korea in the end of November. This
metallurgical coal will be railed to the port of
Rajin from Khasan, Russia, from where it will
be transported by sea to POSCO’s steel plant.
The import of Russian metallurgical coal
via North Korea is in accordance with the
Khasan/Rajin logistics project planned by
three Korean companies including POSCO
and JSC Russian Railways, which will be
the third round. The first round of import
was 40,000 tonnes in November 2014 and
the second one was a total of 80, 000 tonnes
(40,000 tonnes x 2 voyages) in April 2015.
THE TEX REPORT (JAPAN), November 16, 2015
AsiaElec
Coal plants seen as way to
cut Thailand’s dependence
on gas
Two coal-fired power plants planned for Krabi
and Songkhla’s Thepha district in Thailand are
a crucial part of the national energy strategy
to diversify power generation options, as well
as reduce electricity costs and enhancing
energy-supply security, a senior Energy
Ministry official said. Head of the Energy
Policy and Planning Office Twarath Sutabutr
said the latest Power Development Plan (PDP2015), recently approved by the government,
was designed to tackle imbalances inherited
from the previous plan.
This includes lowering projected national
electricity demand and the country’s
dependency on natural gas for power
generation, he said. Although the national
power reserve is projected to continue to
provide 30% surplus capacity over the next 10
years, even with the revised PDP, the country
needed to proceed with the coal-fired power
plants planned for Krabi and Thepha, in
Songkhla province for the sake of diversifying
national energy sources and a secure supply of
power for the South, he said.
Without the planned power stations,
electricity demand in the South was forecast
to top the combined capacity of power plants
in the region from 2020. Further, the average
electricity tariff for the next 15 years would be
cut to 4.587 baht per kWh under PDP-2015,
from more than 5 baht in the previous plan,
if the two plants, which would run on coal
imported from abroad, go ahead, Twarath
said. Having other types of power plants that
do not run on natural gas would help cut
imports of LNG, which is more expensive.
THE NATION (THAILAND), November 16, 2015
TIMES OF INDIA (INDIA), November 16, 2015
Mongolian Mining
Corporation expresses
interest in South Gobi mine
UHG coal mine is an open pit metallurgical
coal mine in the Ovoot Tolgoi area in the
South Gobi Province located 540 km to
the south of Ulan Bator, and started a coal
production in April 2009. Mongolian Mining
Corporation (MMC) has a 100% interest in
this coal mine. At UHG coal mine, the coal
handling and preparation plant (CHPP)
started a commercial operation on 30 June
2011. Furthermore, the second CHPP started
P14
w w w. N E W S B A S E . c o m
Week 46 17•November•2015
AsiaElec
NU C L EA R
India, Australia complete
formalities for civil nuclear
pact
India and Australia have completed all the
formalities for their bilateral civil nuclear
agreement, paving the way for the pact to
come into force. The announcement was made
after a meeting of Prime Minister Narendra
Modi and his Australian counterpart Malcolm
Turnbull on the sidelines of the G20 Summit.
“Another milestone achievement as two PMs
announce completion of procedures for India
Australia Civil Nuclear Agreement,” External
Affairs Ministry spokesperson Vikas Swarup
said after the meeting.
“With the completion of procedures,
including administrative arrangements, the
India Australia Civil Nuclear Agreement
will enter into force,” he said. Australia had
signed a civil nuclear agreement with India in
September last year to supply it uranium for
meeting Indian energy needs. Australia has
got 40% of the world’s uranium and the deal is
important for both the countries.
Modi thanked Turnbull and described the
agreement as a “milestone and source of trust
and confidence”.
PTI (INDIA), November 16, 2015
CNNC clinches US$4.7
billion nuclear deal in
Argentina
China National Nuclear Corp has clinched
deals with Argentina, opening the doors for
exports of nuclear equipment which might
amount to 30 billion yuan (US$4.7 billion) to
the South American country. The State-owned
CNNC has inked contracts for work related
to Argentina’s fourth nuclear reactor and an
agreement for a fifth nuclear power plant.
General manager Qian Zhimin said the
agreement exemplifies the deep friendship,
mutual trust and extended co-operation
between the two countries since 2010. “We
would like to share our experiences and
advances with Argentina as the country
develops its nuclear industry. At the
same time, we hope that the mutual cooperation will provide us with more market
opportunities in Latin America and also boost
the local economy,” he said.
The firm has exported six nuclear reactors,
CHINA DAILY (CHINA), November 17, 2015
Week 46 17•November•2015
News in brief
AsiaElec
Delay of nuclear plant
completion in Japan
economy presses forward with controversial
plans to build eight new nuclear reactors. The
deal, which includes “licensing procedures,
vendor inspections, inspector training and
joint inspections and technical support”,
was signed last week in Beijing, South
Africa’s National Nuclear Regulator (NNR)
announced.
China is competing with Russia, France,
the US and South Korea for the South African
nuclear power plant construction programme,
which is worth up to US$50 billion (46.5
billion euros). “Bilateral co-operation
arrangements such as these serve as a valuable
mechanism for ensuring that the NNR’s
regulatory practices are ... benchmarked
against the best current standards and
practices as applied internationally within
the nuclear industry,” NNR’s CEO Bismark
Tyobeka said.
Japan Nuclear Fuel reported to host
local governments on November 16 that
the completion of its spent nuclear fuel
reprocessing plant in the village of Rokkasho
in Aomori Prefecture, northern Japan, will
be delayed to the first half of fiscal 2018 from
next March.
JNFL also notified the Aomori prefectural
and Rokkasho village governments that the
completion of construction of a uraniumplutonium mixed oxide, or MOX, fuel plant
in the village will be in the April-September
first half of fiscal 2019, instead of October
2017 as previously scheduled. The delays are
mainly due to prolonged screenings by the
Nuclear Regulation Authority under stricter
safety standards, a key condition for resuming
operations.
FIJI PRESS (JAPAN), November 16, 2015
AFP (FRANCE), November 16, 2015
H YD R O
Russia and China discuss Sorang hydroelectric plant
building new NPPs in China now operational
Russian and Chinese representatives have
discussed the construction of units 7 and
8 of the Tianwan nuclear power plant in
China and prospects for building new
nuclear power plants near Lianyungang city
in China. According to the ASE group of
companies (AO NIAEP, AO ASE and AO
Atomenergoprojekt), which is implementing
the project, the talks took place on November
16 in the presence of ASE head Valery
Limarenko and Lianyungang Mayor Zhao
Xiaojiang.
“The sides discussed the construction
of the second stage of the Tianwan nuclear
power plant and prospects of co-operation
in constructing the station’s fourth stage
and building new power stations near
Lianyungang,” the ASE report said. The
construction of the fifth and sixth power units
of the Tianwan nuclear power plant were
frozen after an accident at the Fukushima-1
nuclear power plant in Japan in March 2011.
The projects provided for the use of CNP1000 reactors for the construction.
ITAR-TASS (RUSSIA), November 17, 2015
The 100-MW Sorang hydropower plant is
now operational, according to the Abu Dhabi
National Energy (TAQA), which owns the
project. Located on the Soran Khad River
in India’s northern Himachal Pradesh State,
TAQA and partner Jyoti Structures acquired
a minority interest in the run-of-river plant
from Himachal Sorang Power (HSPL) in
January 2013.
TAQA has since acquired the majority
share in the plant. “We are keen to participate
in meeting India’s growing energy needs
through the completion of this project, which
provides cost-efficient power and helps
develop renewable energy sources,” TAQA
chairman Saeed Mubarak Al-Hajeri said.
TAQA is owned by the UAE government.
HydroWorld.com reported in February 2014
that the company had signed a US$2 billion
deal to acquire another pair of plants in
Himachal Pradesh. The projects’ cumulative
output capacity is expected to be around 1,
300 MW.
HYDROWORLD, November 12, 2015
South Africa, China
Mitsubishi, Korea Southern
nuclear energy regulators join hands Thermal Power
cooperate on reactor plans Projects
Nuclear energy regulators in South Africa and
China have signed a technical co-operation
agreement as Africa’s most industrialised
w w w. N E W S B A S E . c o m
Mitsubishi Hitachi Power Systems (MHPS)
has concluded an MoU with Korea Southern
Power Co (KOSPO) of South Korea following
P15
AsiaElec
agreement between the two companies to
engage in exchanges of technology relating
to thermal power generation. The aim of
these exchanges is to promote technical
collaboration and joint research between
MHPS and KOSPO. The MOU also calls
for technological liaison with Korea’s Yonsei
University, an academic institution with
which KOSPO already enjoys a relationship of
exchange.
KOSPO is a power-providing subsidiary of
Korea Electric Power Corporation (KEPCO),
Korea’s state-owned power utility. KOSPO
and MHPS enjoy good relations, exemplified
by MHPS’s receipt this July of an order for
a 47-MW natural-gas-fired gas turbine
combined-cycle (GTCC) power generation
system adopting the company’s latest M501J
gas turbine, for installation at KOSPO’s
Youngnam Natural Gas Power Plant.
JCN NEWSWIRE (JAPAN), November 16, 2015
Fuel crisis hits construction
of hydropower projects
The fuel crisis has hit the construction of
hydropower projects across Nepal. Six plants
being developed by the Nepal Electricity
Authority (NEA) and its subsidiaries have
stalled due to lack of petrol and construction
materials resulting from an undeclared Indian
embargo. No work has been done for the past
few weeks, the NEA said. “The construction of
the projects has come to a complete halt,” said
NEA managing director Mukesh Kafle.
“The unavailability of petroleum has
shattered our dream of making the country
free of load-shedding within the next two
years. All these projects are certain to be
delayed which also means they are looking at
cost overruns.”
National pride project Upper Tamakoshi
has been the hardest hit by the ongoing
blockade. First, the construction work at the
project was totally halted for six months by
News in brief
the April 25 earthquake. Now, it has received
another blow due to lack of petrol.
THE KATMANDU POST (NEPAL), November 17,
2015
Nepra approves massive
hike in KP’s hydel profit
The National Electric Power Regulatory
Authority (Nepra) approved around a 217%
increase in the Net Hydel Profit (NHP) of
Khyber Pakhtunkhwa and increased the
sale price of relatively cheap hydropower by
around 16%. As a result of the decisions, the
KP government will get around 19 billion
rupees NHP per year, against 6 billion rupees
at present.
The approval came at the request of
Water and Power Development Authority
(Wapda) after an agreement reached between
the Ministry of Water and Power and the
provincial government early this year. “Based
on the discussion and while taking a projected
generation of 17, 004 GWh on account of
hydel power stations situated in KP, NHP
at 1.10 rupees per kWh for full year 2016
works out to be 18.704 billion rupees against
6 billion rupees previously allowed,” said the
regulator.
DAWN (PAKISTAN), November 14, 2015
R ENE W AB L ES
China’s NEA announces
25% increase in wind
power capacity
China’s National Energy Administration
(NEA) said that the country’s large-scale
wind power capacity has reached 110,610
MW as of the end of October 2015, which is
25.6% more than a year back. The calculations
AsiaElec
do not include plants with capacities lower
than 6 MW. As for the county’s large-scale
hydropower plants (HPP), their total installed
capacity rose by 6.5% year-on-year to 274,560
MW at the end of last month. Over JanuaryOctober, China connected approximately
12,580 MW of new HPPs.
In the first ten months of 2015, the
country’s total power consumption grew by
0.7% on the year to 4,583.5 TWh. In October
alone, China’s total electricity demand
amounted to 449.1 TWh, marking a 0.2%
year-on-year decrease.
The global leader in installed wind capacity
plans to double it to 200 GW as part of its
2016-2020 five-year plan on energy.
SEENEWS (UK), November 16, 2015
CIL to invest to set up solar
power units
State-run Coal India (CIL) will invest 60
billion rupees to set up 1,000 MW of solar
power generation capacity over the next five
to six years, according to a senior company
executive. “We will fund 70% of the project
cost through debt, which will come mostly
from banks, while the rest will be through
internal resources,” said the executive, who
did not wish to be named adding that land for
the plants will be provided by the states.
As a first step, CIL has prepared a detailed
project report for setting up 200 MW of solar
generation capacity. The coal producer is also
looking at setting up floating solar panels on
water bodies formed when a mine is closed
down. “We have firmed up technology for
setting up floating solar panels on shallow
sides of these lakes, while technology for
setting up panels on deep water is being
worked out,” said another company executive.
ECONOMIC TIMES (INDIA), November 10, 2015
India wind power capacity
to increase by 2,800 MW
Wind energy capacity addition in the country
in the current fiscal could grow 20% from
last year to about 2800 MW, according to
rating agency ICRA. This would be driven
by both independent power producers
(IPP) and non-IPP segments, it said. While
IPPs are encouraged by satisfactory feed-in
tariff-based power purchase agreements in
key wind energy-rich states, as well as cost
competitiveness with conventional power,
non-IPP producers are likely to derive benefits
from accelerated depreciation norms.
ICRA said the demand drivers for the wind
energy sector remain favourable in the long
run, aided mainly by strong policy support
P16
w w w. N E W S B A S E . c o m
Week 46 17•November•2015
AsiaElec
News in brief
AsiaElec
from the Centre and state governments,
favourable regulatory framework in the form
of mandatory supply regulations as well as
cost competitiveness of wind-based energy
vis-a-vis conventional energy sources.
The agency, however, said the sector
continues to face regulatory challenges arising
out of wide variance in renewable purchase
obligation (RPO) norms, weak compliance by
obligated entities and absence of enforcement
of penalty framework by the State Electricity
Regulatory Commission.
ECONOMIC TIMES (INDIA), November 10, 2015
Indian Railways all set to
tap solar energy
As part of the Indian Railways’ push to tap
renewable energy, the Mysuru Division is
tapping solar energy resources to reduce its
dependence on conventional forms of energy
dependent on coal and water. With this in
mind, a 15 kW capacity wind and solar hybrid
project is being established at Birur station
at an estimated cost of 3.7 million rupees,
according to the Divisional Railway Manager
Rajkumar Lal.
This is in pursuance of the Railway’s drive
to meet a portion of its energy from renewable
energy sources like solar, wind and biomass.
Incidentally, the Railway is among the single
largest entities consuming nearly 2% of the
country’s total power generated to meet its
operational requirements. “The work order for
the Birur solar power plant has already been
issued and it is likely to be completed in three
months,” said Senior Divisional Electrical
Engineer, Mysore Division of the South
Western Railway, D Soundarajan.
He told The Hindu that the unit at
Birur would generate nearly 20,000 units
of electricity per year, against the annual
requirement of nearly 120, 000 rupees units of
that station, and hence the savings would be
considerable.
THE HINDU (INDIA), November 13, 2015
Solar power could be 10%
cheaper than coal-based
power by 2020: India
Solar power could be up to 10% cheaper than
coal-based power by 2020, consultancy firm
KPMG has said in a report. “Today in India,
solar prices are within 15% of the coal power
prices on a levelised basis. While this may not
fully capture costs such as grid integration
costs for solar, our analysis suggests that even
after considering the same, solar prices would
be competitive with coal,” KPMG said. “Our
Week 46 17•November•2015
forecast is that by 2020, solar power prices
could be up to 10% lower than coal power
prices.”
Solar power tariff in India touched a
record low early this month with US-based
SunEdison’s winning bid of 4.63 ruppes per
unit for a contract to sell 500 MW of solar
energy to state-run NTPC Ltd. The tariff is
about 15% less than the industry average and
8% below the previous low of 5.05 rupees per
unit quoted by Canada’s SkyPower for a tender
in Madhya Pradesh.
PTI (INDIA), November 16, 2015
Ratchaburi to invest US$1
billion in power plants in
Indonesia, Laos, China
Thailand’s listed power producer Ratchaburi
Electricity Generating Holding PCL (RATCH)
plans to invest around US$1 billion in power
plants in Indonesia, Laos and China, a top
official with the company said. The company
expects its aggressive investment to double
its electricity production capacity to 8,000
MW, increasing its enterprise value from the
current level of 124 billion baht to 188 billion
baht by 2018.
Newly-appointed CEO Rum Herabat
said the company is looking at three main
approaches to increase business. These
include: exploring new investments,
managing efficiency of main power plants and
completing construction of new power plants
as planned. “We are looking at opportunities
to enter joint ventures and acquisitions over
the next two years,” he said. The potential
projects, for which the company is conducting
feasibility studies and negotiation include,
2,000-MW JAWA7 in Indonesia, 400-MW
Sekong 4 hydropower project in Lao PDR,
seven solar farms projects for the public sector
in Thailand (with a combined capacity of 35
MW) and 2,000-MW power plant project in
China.
JAWA 7 project, which is in partnership
withThailand’s leading coal mine operator
Banpu, is already undergoing the
w w w. N E W S B A S E . c o m
“consideration process” by the Indonesian
authorities, and is set to be finalised by the
next month, said the company official. In
Laos, it has signed the joint development
agreement with Lao World Engineering &
Construction Co (LW) to develop Sekong
4 hydropower project. LW is a subsidiary
of Thai World Power Group, which
partnered with RATCH in Ratchaburi World
Cogeneration power plant.
DEALSTREETASIA.COM (SINGAPORE),
November 15, 2015
Taiwan’s Solar Power
reports loss of NT$371
million
Taiwanese firm Neo Solar Power Corp, or
NSP, reported a net loss of some NT$371
million (US$11.3 million/10.5 million euros)
for the third quarter of 2015. In comparison,
the solar cell and module maker booked
a total comprehensive loss attributable to
stockholders of NT$52.7 million in the same
three months of 2014. The firm explained that
the main factors to negatively influence its
bottom line during the period were certain
capacity relocation expenses in Southeast Asia
coupled with an impairment loss of financial
assets and other allowances.
Neo Solar’s gross margin improved
significantly to 5% in the quarter through
September 2015 from a negative 3.32% in
the previous three-month period. The main
reason for that was an increase in average
selling prices (APS), which started around
July, the company noted in its financial
statement. NSP’s third-quarter 2015 net
revenues amounted to NT$5.59 billion,
decreasing from NT$5.89 billion the previous
year. Looking forward, the Taiwanese
photovoltaics (PV) maker expects sales to
go up thanks to higher shipments to the US
following the completion of its relocation in
January next year. Both demand and ASP for
solar cells are also expected to grow in the
fourth quarter, the firm noted.
SEENEWS (UK), November 16, 2015
P17
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