Category Archives: Clean Energy

Hong Kong seen as potential market for Philippine firms to raise ‘green’ funds

MANILA, Philippines — Philippine companies could tap the Hong Kong market to raise funds for their “green” spending, as the Southeast Asian nation emerges as one of the fastest-growing renminbi markets in the region.

Christopher Hui, Hong Kong’s secretary for financial services and the treasury, floated the idea during his recent visit in Manila to attend the 55th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB).

Hui explained that financial institutions in the Philippines and ASEAN may explore the fintech applications developed in Hong Kong and adopt them in local markets.

Specifically, he said the Guangdong-Hong Kong-Macao Greater Bay Area development offers Hong Kong and the Philippines “boundless opportunities” in areas such as renminbi business and green finance.

“The huge demand for infrastructure in the country (Philippines) is noteworthy,” Hui said in a statement.

“Hong Kong, by leveraging its diversified investment and financing platform for equities and bonds as well as its professional services and multi-level connectivity with the Mainland’s capital market, can cater for such development demand,” he added.

In 2019, the Philippine government raised 2.5 billion renminbi ($363.3 million) from its second sale of so-called “panda” bonds.

The Philippines first tapped the panda bond market in March 2018, raising RMB1.46 billion ($230 million).

Hanoi, Vietnam to Shift to Electric Buses

Hanoi city authorities are planning to convert 100% of the city’s bus fleet from petrol-powered to electric ones as directed by the central government. The move is part of an action programme on green energy transition and carbon and methane emission reduction for the transport industry. The municipal People’s Committee has assigned the Department of Transport to build in coordination with relevant units.

Since the first electric buses were put into operation in Hanoi in December 2021, the number of bus routes using smart electric buses in the city has increased to nine, contributing to enhancing the quality of public transport in the city. Each bus is equipped with an automated system able to give warnings about unsafe situations, an onboard public address system, free Wi-Fi, USB charging ports, and security cameras. With a battery capacity of 281 kWh, the bus can run between 220 and 260 kilometres on a single charge. It can fully recharge in just two hours at its designated charging station network.

The Vice Director of the city Public Transport Management Centre, Thai Ho Phuong, said that in the first half of this year, electric buses carried over 122 million passengers, and the figure is increasing continuously. Given the positive feedback from users, in the time to come, the centre will work with a private provider to launch more routes. This is expected to attract more passengers to public transportation services and contribute to reducing air and noise pollution in city streets.

Currently, the Hanoi Transport Corporation operates 83 bus routes and one bus rapid transit (BRT) route with a total number of nearly 1,100 vehicles. The number of vehicles eligible to be replaced by electric buses from 2025 is 225, accounting for 21.3% of the total. Under the government action programme on green energy transition, Vietnam aims to have 100% of new buses use electricity or green energy from 2025.

The plan targets that from 2030, at least half of all vehicles and all new taxis will be powered by electricity or green energy. By 2050, 100% of buses and taxis will use these types of energy. The plan also looks to raise the rate of commuters carried by public transport to 45%-50% in Hanoi, 25% in Ho Chi Minh City, 25%-35% in Da Nang city, 20% in Can Tho city, and 10%-15% in Hai Phong city from 2025.

The action plan’s overall goal is to develop a green transport system towards net zero emissions by 2050 as Vietnam committed to at the 26th United Nations Climate Change Conference (COP26). The objective for 2030 is to improve energy use efficiency and boost the use of electricity and green energy in the fields that are ready in terms of technology, regulations, and resources to help carry out the commitments in the Nationally Determined Contribution and reduce methane emissions.

From now to 2050, the transport sector will convert all vehicles, transport equipment, and infrastructure into electric and green energy-powered vehicles. For road transport, from 2022-2030, the plan looks to promote the production, assembly, import, and use of electric vehicles, expand the use of biofuel E5 to all road vehicles, develop charging systems, and encourage both existing and new coach stations and rest areas to adopt green practices.

Which ASEAN countries will be the front-runners to decarbonize their power sectors? (Opinion)

Written by Cecillia Zheng, Associate Director, Gas, Power and Climate Solutions, S&P Global Commodity Insights

Given its location and proximity to oceans, ASEAN is one of the most vulnerable regions to the impact of global warming. In recognizing the risks, the region has set decarbonization targets, pledged reduction plans in their nationally determined contributions (NDCs), and passed laws and policies to address climate change.

This report will briefly describe the region’s national emission targets and then take an in-depth view of the power sector, ranging from PDPs and future generation fuel mix to emission perspectives; in particular, which country or countries’ power sector will be the front-runners leading the decarbonization pathway in the next 10-15 years.

ASEAN power sectors’ emission perspective in relation to their climate targets

Of the 10 ASEAN countries, 8 have announced national targets to achieve net-zero GHG emissions or to become carbon neutral by 2050, corresponding to the 1.5°C target set by the Intergovernmental Panel on Climate Change (IPCC), except Indonesia, which committed to net zero by 2060, and the Philippines, which is the only ASEAN country that has not committed to a net-zero target.

However, despite these pledges, most ASEAN countries have not yet developed firm measures to help them achieve the targets. Also, an important part of net-zero actions is to reduce coal use in power generation, but current PDPs mostly do not reflect the coal phaseout plans, neither do they align with their net-zero targets.

According to the current PDPs and the region’s ability to deploy clean energy, there will still be substantial coal power capacity, mostly already under construction, to be added in the major power systems. Therefore, ASEAN is expected to witness coal-fired generation growth in next seven years. Post-2030, the reliance on coal will ease over time, with more renewable projects coming online. Accordingly, the power sector’s emission would reduce but not reach net zero by 2050. Figure 1 illustrates the region’s power sector’s carbon dioxide equivalent (CO2e) emission through 2050.

ASEAN power sector CO2e emissions will continue to grow and peak at 805 million metric tons (MMt) in 2029. Emissions will then plateau between 2029 and 2040, as the region retires 20 GW of coal capacity (40% from Malaysia) in this period while adding 54 GW of new gas capacity to provide stable power output and to balance the renewables.

The region’s total emission will move downward only from 2041, owing to accelerated renewable growth combined with a phase-down of coal in total power generation. The reduction will accelerate from 2045 owing to the implementation of multiple decarbonization measures in the region, including large-scale coal capacity retirement and the expectation of carbon capture and storage (CCS) technologies being installed largely on new thermal power plants. Grid emission factors will improve significantly from 0.54 kg/kWh in 2019 to 0.18 kg/kWh by 2050. Besides, progress in attaining the emission peak remains uneven among individual countries.

Front-runner club analysis

In the next 5-15 years, Singapore is positioned to be the leader in the decarbonization of power sector. It is the only country that is projected to achieve a CO2e emission reduction (9%) in 2030 compared with the 2019 level (see Figure 2). It is followed by Malaysia and Thailand, each representing an emission growth of 11% and 12%. Indonesia, Vietnam, and the Philippines will lag owing to heavy dependence on coal-fired generation and reliance on external funding to support projects

Singapore power sector’s CO2e emissions are expected to peak in mid 2020s, as the country not only set a net-zero target but also made tangible actions by deploying domestic renewable projects, planning for low-carbon/renewable imports, and applying carbon tax to incentivize low-carbon energy.

In alignment with the country’s net-zero targets, the government launched various programs to aggregately deploy solar power. In addition, the country is actively exploring renewable import projects, with two rounds of requests for proposals (RFPs) launched to call for up to 4 GW of dispatchable low-carbon power imports, mostly to come online before 2035.

A positive decarbonization perspective will also be aided by efficiency improvements of gas-fired generators (some of which have already signed contracts with the equipment suppliers for upgrades) and the carbon tax that started with S$5 per metric ton of carbon dioxide equivalent between 2019 and 2023, with a plan to increase to S$50-80 by 2030.

Thailand is also in the front-runner club, after Singapore. Thailand power sector’s emission will have a brief increase from oil during 2022-23 as some gas plants have temporarily switched to burning oil owing to gas price hikes. From 2024 onward, emissions will continue to grow but at modest rates as the country manages to cap the generation from coal-fired power plants.

Thailand stopped building new coal plants and will continue to promote renewable energy. Thailand has launched the Bio-Circular Green (BCG) economic model as the national agenda to promote renewable energy, and the National Energy Policy Committee (NEPC) approved the New RE Quota for purchasing 5.2 GW electricity from renewables under a feed-in-tariff (FIT) scheme between 2022 and 2030. Coupled with the renewable expansion, Thailand has made significant progress toward smart grids and prepared the enactment of third-party access codes to the power grid systems. Thailand also intended to increase imports from Laos’s hydropower and is accelerating legal and policy actions to implement enhanced carbon pricing.

Similar to Thailand, Malaysia is ranked high from a low-carbon perspective. The country has stopped building new coal-fired power plants and announced plans to retire the existing coal fleet in stages or once PPAs with each facility expire. In addition, Malaysia is endowed with abundant gas resources, and it could quickly ramp up gas capacity to make up for the capacity loss from coal.

Malaysia has represented strong renewable energy demand. To promote renewables, the country has awarded 2.2GW capacity in four rounds of large-scale solar (LSS) tenders and released the Malaysia Renewable Energy Roadmap (MyRER) to provide detailed plans for expanding the use of renewable energy sources and support further decarbonization of the electricity sector through 2035. As a result, emissions will slowly increase for a few years and reduce significantly owing to gas replacing coal alongside the renewable boom, presumably from 2030.

Followers struggling between economic growth and decarbonization

Vietnam, Indonesia, and the Philippines are facing the same dilemma. They represent the strongest economic growth in ASEAN and require substantial new power capacity, including reliable thermal power plants, to sustain the growing demand. Meanwhile, they are the most coal-reliant countries and decarbonizing the existing power fleet appears to be a difficult task.

Vietnam has announced a net-zero target and made commitments to quit coal at COP26, but no strategic report has been issued to clarify the route to the net-zero target. The quit-coal statement was not joined by specific proposals. In fact, despite PDP8 drafts showing that Vietnam’s power system would center on gas and wind, the capacity of coal and wind moves up and down in different drafts (see Figure 3), and the final release has been delayed repeatedly.

Furthermore, the expansion of renewable capacity in the past three years came with great challenges to Vietnam’s grid system. Therefore, in January 2022 Vietnam’s National Load Dispatch Center (NLDC) announced not to add wind and solar power to the 2022 national plan. In view of the investment deficiency in the grid not being able to accommodate the renewable expansion, Vietnam is to consider opening the grid sector to private and foreign investors.

Neverthless, Vietnam has one wild card to play, that is its two big gas blocks: Block B and Cá Voi Xanh. Should prices of LNG imports continue to trend higher, Vietnam may try to push forward its domestic gas development more and accelerate the coal retirement accordingly.

Indonesia is heavily coal-reliant and has been slow to develop renewables. Therefore, CO2e emissions will grow quickly through 2041 owing to increasing power generation from coal-fired power plants. In the next five years, more coal capacity will still be added, and coal generation share will remain high.

Various plans around coal have been announced, but key ones (PLN coal retirement plan will be after the completion of 16GW planned mega coal projects; the country’s low-carbon vision, LTS-LCCR 2050, still specifies that coal will continue to have an important role in the power sector; and recent New and Renewable Energy Bill classified liquified and gasified coal as “new energy” and is part of Indonesia’s efforts to replace petroleum imports) delivered the same message that Indonesia is not ready to remove coal from the power sector in the medium term and even in the long term.

Meanwhile, instead of phasing out coal, Indonesia has been actively involved in biomass co-firing to phase down coal use. It also established a carbon tax, but the initial price of 30 Indonesian rupiah per kilogram of CO2e, or US$2.09, is viewed as being too low to incentivize decarbonization actions. All these actions could slow the emission growth rate before 2041 but would not move the peaking earlier.

The Philippines is the only ASEAN country that has not committed to a net zero target. It is well positioned for more renewable development in terms of policies, procurement, and economics. However, the only domestic gas source (Malampaya) is depleting, and the introduction of LNG has been slow. It appears difficult for the country to completely phase out coal soon.

In December 2020, the Philippines’s energy secretary announced a moratorium of new coal plants. In 2021, power companies announced discontinuing some coal projects. However, at least half of the planned coal capacity stays on the table. Therefore, the Philippines’s emissions will likely grow following the coal-fired generation growth through 2028. It remains to be seen if the newly elected President Ferdinand Marcos Jr would commit to favor renewables and roll out decarbonization measures.

Huawei Malaysia And Sunview Enter Agreement On Deployment Of Solar Inverters 

(Left-right: Vice President of Digital Power Business, Huawei Malaysia, Mr Chong Chern Peng; Chief Executive Officer, Fabulous Sunview Sdn Bhd, Mr Ong Hang Ping)

Huawei Technologies (Malaysia) Sdn Bhd (Huawei Malaysia) has forged a partnership with Fabulous Sunview Sdn Bhd (Sunview) to jointly accelerate the green digital energy transition in Malaysia. The collaboration involves reducing the industrial and commercial carbon footprint of local businesses, through the deployment of Solar Photovoltaic (PV) technology in the country.

The partnership, formalised through a Memorandum of Understanding (MoU), will see Huawei Malaysia supplying solar inverters to Sunview. By integrating Huawei’s cutting-edge smart PV solutions, users will be able to receive better and higher yields at lower costs, delivered at an optimum value. Under the MoU, Sunview will become the purchaser of the inverters and turnkey solutions for large-scale solar projects.

Huawei Malaysia will also undertake the role of being the technology advisor for this collaboration, in addition to conducting product training for Sunview.

The MoU was signed by Chief Executive Officer of Fabulous Sunview Sdn Bhd, Mr Ong Hang Ping and Vice President of Digital Power Business of Huawei Malaysia, Mr Chong Chern Peng at the Huawei Customer Solution Innovation Center in Kuala Lumpur.

“We are thrilled to collaborate with Huawei, the world’s leading Smart PV technology provider. The company’s Smart PV solutions are currently widely adopted by many of the industry PV investors as well. We believe that our partnership will help accelerate the renewable energy adoption in the region, especially Malaysia, in line with our company’s mission to let everyone live sustainably with renewable energy,” said Mr Ong Hang Ping, CEO of Fabulous Sunview Sdn Bhd.

“Looking ahead, the incorporation of Huawei’s solar inverters will help strengthen the solar energy solution experience, allowing us to use innovative technologies to progress towards creating a self- generating energy environment and meeting the zero-carbon mission goal,” he added.

According to Mr Chong Chern Peng, the MoU marks an opportunity to bridge the gap in Malaysia’s solar industry by assisting in the acceleration of the nation’s transition toward green and sustainable energy.

“At Huawei, we strive to use clean and renewable energy that boasts low carbon emissions. Through this partnership with Sunview, we are able to further expand the use of solar across Malaysia and assist the nation in achieving its goal of becoming a carbon-neutral nation by 2050,” he said.

Mr Chong added, “We are honoured that Sunview has chosen to collaborate with us in this journey – which is a partnership that truly combines each partner’s expertise, strength and experience. Together, we can develop projects that utilise clean energy on a wider scale to support green development and boost the solar market along with Malaysia’s renewable energy industry. Achieving carbon neutrality will require the collective efforts of all industry players. Together, we can develop the local ecosystem and drive it towards sustainable development.

“The MoU signing today cements the path towards the development of a significant, market-driven solar industry capable of supplying high-value smart PV solutions that are safe, secure, reliable as well as economically sustainable, while at the same time providing broad-based benefits for society.”

Solar energy has been a key pillar of the global energy transition and has become the preferred energy source of choice due to rapid advancements in high-tech solutions that have drastically improved its accessibility, adaptability, pricing, sustainability, and productivity output.

Huawei is a global leading provider of fully digitalised smart PV solutions, harnessing more than 30 years of expertise in information and communications technology and serving more than a third of the world’s population. Huawei has delivered more than 200GW of Huawei’s SmartPV solutions so far, with a global market share of 23 per cent, ranking it as number 1 in the world since 2015 and as of 2021, it has also gained the number 1 spot in the local market, delivering 650MW SmartPV solutions in Malaysia.

China’s cities face a tough choice — more green energy or food

China’s plans to accelerate its world-leading expansion of solar and wind power are facing a major hurdle as floods, droughts and food-supply issues present authorities with a reality check on how much precious farmland the nation can afford to lose.

Solar and wind farms have been supercharged in the past two years since Chinese President Xi Jinping announced a 2060 target for the nation to be carbon neutral, creating an incentive for local governments to allow more large-scale renewable energy projects.

But the pandemic and recent bouts of extreme weather have shown how susceptible the nation is to disruptions to its food supply. Good arable land is relatively limited considering the appetite of the nation’s 1.4 billion people, and large tracts of some of the most fertile soil in the heavily populated eastern and central provinces have already been swallowed up by urban growth. With administrations now prioritizing ecological protection and food security, plans to build big, new solar projects are coming under increasing scrutiny.

China is already the world’s largest producer of renewable energy, with the capacity to generate some 679 gigawatts of wind and solar power, plus another 390 gigawatts of hydropower. More than a fifth of that solar and wind capacity has been added since 2020, and expansion plans by local governments would carry the nation to its 2030 target of 1,200 gigawatts more than five years early if fully implemented.

But in May, the Ministry of Water Resources issued a rule that bans solar and wind projects on some waterways, lakes and reservoirs as part of measures to protect the environment and prevent overdevelopment that could disrupt flood control. A separate draft regulation is under consideration by three government agencies, including the Ministry of Natural Resources, that would prohibit new solar projects on cultivated land or in forests.

Some local authorities are already clamping down on overdevelopment. In Jiangsu province, a 1 gigawatt floating solar plant that covered 70% of a major lake was partially dismantled this year after local authorities said it was “illegally constructed” and “intervened with flood discharge.”

The shift in priorities has put some provincial governments — especially those in the highly urbanized east — in a bind. While they’ve been tasked with decarbonizing rapidly under China’s national climate pledge, they also face a central government “red line” to protect farmland.

It was considered a “political achievement” to expand renewable energy and that’s why some authorities have been “blindly overdeveloping solar and wind,” said Qin Yan, an analyst at financial data firm Refinitiv. “But it’s inevitable that some projects violate the rules for ecological protection and cultivated-land protection. The environmental authorities have noticed the problem and are trying to regulate it.”

The shift to prioritizing crops may encourage solar and wind developers to adopt alternative strategies. One is to integrate renewable energy systems into farms in a way that doesn’t curtail food production, such as installing solar panels on top of animal sheds and farm buildings, and placing wind turbines so that they don’t interfere with agricultural operations.

Since last year, China has launched programs such as Whole-County Rooftop Solar. The nation aims to cover more than half of newly built public buildings and factories with solar panels by 2025.

Another strategy is to head west, to less heavily populated regions or mountainous and desert regions with lower agricultural potential, or to use land that’s already been degraded, such as disused coal mines. The country has begun construction of 100 gigawatts of such solar and wind projects, mostly in deserts, and another 450 gigawatts are planned to be built by 2030.

One area garnering attention from solar developers is the Gobi Desert, straddling China’s northern border with Mongolia, where land is cheap and the wind and sunshine are abundant. But it’s thousands of miles from the country’s biggest cities and power-hungry industrial centers, making it expensive to transport the electricity.

To help tap the potential of more remote areas, China is on a building spree of new transmission lines across the country. The nation currently has 33 ultrahigh-voltage power lines, and State Grid, which operates 88% of the country’s grid, is investing 380 billion yuan ($56 billion ) to build 38 more between 2021 and 2025.

While those solutions are good in theory, in practice local authorities know they can get much higher revenue from energy generators than from cropland, and many violate or bend the rules. Money “flows to the sectors that are most profitable,” Qin said.

Earlier this year, a fight between villagers in Xingtang county in the northern province of Hebei and workers from a solar company made national headlines. The local government had leased farmland for a 200 megawatt “agricultural solar farm,” and farmers became incensed after the company bulldozed

6.7 hectares of wheat that was almost ripe.

Still, the increased concern about arable land means that there’s unlikely to be any utility-scale power plant development in central and eastern regions after this year, so most renewables growth in the next three years will be in the northern and western deserts, according to Peng Peng, general secretary of industry group China New Energy Investment and Finance Alliance.

“Policies that involve land, not only those related to solar projects, are clearly moving in the direction of prioritizing food production,” Peng wrote in a commentary.