Commentary

Thailand underpinned its credentials as a leader in the Asian power sector for renewable energy by introducing a comprehensive package of adder rates for renewable energy technologies in 2007, and currently offers incentives for biomass/biogas, solar (thermal and photovoltaic), wind and mini/micro hydropower projects. Adder rates are available for VSPPs (Very Small Power Producers, producing up to 10 mW) and all adder rates except for hydropower are available for SPPs (Small Power Producers, producing from 10mW up to 90 mW). The adder rates are payable in addition to the normal price of electricity paid to VSPPs and SPPs. Adder rates for solar and wind projects apply for ten years and adder rates for other renewable energy projects apply for seven years. Renewable technology                            Adder rate (Baht/kW hour)* Biomass/biogas (>1 MW / up to1 MW)                          0.30 / 0.50 Hydro (50-200kW/<50kW)                                            0.80 / 1.50 Waste (landfill, digestion/thermal)                                 2.50 / 3.50 Wind (> 50kW /up to 50 kW)                                         3.50 / 4.50 Solar (Thermal and photovoltaic)                                      6.50                                                                                                       * 1 USD = 31.6 Baht, July 2012 Additional adders are also available for projects located in Thailand’s three southernmost provinces of Yala, Pattani and Narathiwat (where civil unrest has received consistent media coverage for several years) and for projects which replace electricity produced by diesel generators. Additional adder rates (Baht/kW hour):

It’s a common perception that we have a carbon problem here on earth. Most everyone nods there head in agreement when it comes to recognizing that we’ve got to do something and there is a need to reduce emissions. Air pollution is not a good thing; I left Cleveland, Ohio many years ago because of it.Regardless of which side of the climate debate you fall on all but a few madmen agree that clean air is essential. But mad or not that’s where the agreement ends and the controversy begins on how best to reduce emissions and save the planet. Where is all the carbon coming from? The combustion of fossil fuels of course, but that is the engine that has taken us to where we are today and continues to drive the economy of the world. So unless there is a massive return to subsistence farming we need practical solutions that will give us and future generations breathable air that won’t cripple the global economy any further than it already is. One scenario, carbon trading has been presented by the same people that gave us energy trading (Enron) and Wall Street firms that were a part of the Subprime real estate debacle that the global economy has yet to recover from. As I understand it, carbon trading involves setting caps on emissions, issuing credits that can be traded (by the above investment banks) and offsets that are issued by doing something such as planting a forest in Botswana to negate any carbon emitted. Leave it to the financiers to figure an angle to bilk trillions from a problem. Criminals in Europe also thought it was worth a look and managed to steal about $62 million in these certificates, so some obviously see an opportunity in carbon. In addition to Wall Street, Governments are suggesting what comes natural to them, levying taxes. Over on the other side of the pacific there is a movement in the USA to tax carbon emissions and the SOCA or Save Our Climate Act is being considered. SOCA is not likely to get serious consideration until after the presidential election, but it is estimated that the proposed $10 dollar per ton of Co2 produced will generate 2.6 trillion dollars over ten years. According to an article by Dan Watkins of McDermott Will Energy LLP the tax will be used to pay for the bureaucracy to run the program and set up a Clean Climate Trust fund. The article starts out by pushing the “Oceans” button talking about the most rapid acidification of the oceans in 300 million years. Wow, that’s a long time! I don’t know about you but I’ll be sleeping a lot easier knowing another tax, federal bureaucracy and “fund” is put in place to save the planet for our children’s, children. The reason we have the carbon problem is because somewhere, someone is profiting in one way or another from the burning fossil fuels. Carbon is a commodity, why not treat it as such and make the reduction in carbon profitable in a tangible way, capture a ton of carbon and get compensated, not some financial scheme that benefits no one but investment bankers? If the tax is actually used in a logical way like that to create incentives for inventors, scientists and industry to come up with solutions that will be profitable then a tax may indeed be beneficial. The next step would naturally occur as the carbon piles up and someone finds a way to turn it into something useable that could be profitable instead of pumping it into the ground for future generations to deal with. We’ve come a long way since we first unleashed the energy stored in fossil fuels, but now is the time to invest some of the wealth that burning all that fuel has created to discover how we can continue to provide power for economic development while still reaping the benefits and assuring future generations that they too will be able to enjoy a comfortable lifestyle. One thing in the carbon debate is for certain, Mother Nature has built-in self-limiting mechanisms and if we cross the tipping point where they kick in the discussion and solution will be taken from our hands; carbon will come down and the air will clear and life will be better for those left to report the outcome!Or will it?

Under the context of Renewable energies Bankability takes shape under several concepts and it is interesting to see that the concept has an Asian concept that is completely different from the European or North American one.

A famous sporting coach once said, “The achievements of an organization are the results of the combined effort of each individual.”

The Shanghai Municipal Development & Reform Commission recently issued a policy descriptively named "Implementation Advice on Accelerating the Establishment of Building Energy Consumption Monitoring Systems in Shanghai’s Government and Large Public Buildings" (“Implementation Advice”).

In July the new Feed In Tariff (FIT) for renewable energy sources will come in effect. Under the new FIT, utilities are required to buy solar, wind, geothermal and hydro power at a fixed tariff and are allowed to pass on such cost to the consumers.

In spite of current market conditions in India, favourable project economics are set to support coal power as the default baseload capacity option with over $154 billion capex expected between 2012 and 2020

While China has been a world leader in developing renewable energy, it now appears that integration of renewable generation is presenting the country with a whole new range of technical that threaten to slow the torrid pace of growth not only in the China, but across the world.

My friends at Asian Power asked if I would do an article so I decided to do one on what I know best - Rotating Equipment Maintenance.

The first half of 2012 saw fossil fuel prices skyrocketed to new highs. Heavy Fuel Oil ( HFO ) cSt180 went up to a ceiling of USD800 per ton.

The National Energy Bureau (NEB) recently approved two offshore wind power projects with an aggregate capacity of 246 MW in Guangdong province in Southern China. The two projects are owned by China Southern Power Grid (CSG) and Guangdong Yudean Group, respectively.

In Asian Power market, “Middle East” is the largest economy having higher concentration of dual purpose power and water plants, mainly due to the requirement of desalinated water in this part of the world and secondly it is the economical way to produce drinking water.

We were all required to take science courses in school and one of the ones I signed up for was basic physics. In one lecture the professor explained temperature convection, and just in case you missed or dozed off during that one, that’s where a temperature difference in gases, liquids or solids will strive to equalize through convection. Today we are witnessing convection on a previously unprecedented global scale; the shift I’m referring to isn’t what you’d think, it’s not about climate change or temperature, but represents one of the greatest migrations of power and capital that the world has ever seen. Although the economy has put a bit of a damper on things of late the flow is still heavily eastern in direction. The “Power” I’m referring to is in the degree of increased world influence and electric generating capacity that’s lighting up whatever device you looking at right now. The Anglo-Spheres dependence on imports is a power and production vacuum that has been escalating for decades and one that the East has been willingly filling, putting millions to work in jobs and at wages that westerners “currently” refuse to accept. All this eastward migration or “convection” of capital and power is happening for one of two reasons; one as payments for the goods the west is importing, or two, by companies looking to get in on the boom to build infrastructure, factories and supply the goods craved by the west. This convection of wealth and power is a virtuous and maybe vicious circle that is expanding with each revolution. Each revolution of exports-payments-investments means boat loads of money and influence for the Sino-sphere and cash drainage for the Anglo-sphere. But what is missing and needed for the circle to continue to expand is power in the form of electricity and with all this inflowing cash and demand for increasing generating capacity you would think it’s a great time to be in the power business in Asia, wouldn’t you? From a demand standpoint the potential for power plant contracts couldn’t look brighter.

It’s no secret that the power installation market is heating up in Southeast Asia.

Despite the adoption of a new electricity law in 2009 liberating the Indonesian electricity market, most electricity generated in Indonesia is sold to PLN, the state-owned utility, under 25 or 30-year power purchase agreements (PPAs).

Every government is worried with the current cost of Renewable Energies since they are – in some cases – more expensive than conventional sources, but everyone also knows that electricity cost is increasing every year and the expectations is that it will double in the next decade.