Monday, October 7, 2013

ASIA: Southeast Asia should focus on raising energy efficiency, says Brunei energy research chief

 

(EnergyAsia, October 8 2013, Tuesday) — This is an edited version of an article by Weerawat Chantanakome, CEO of the Brunei National Energy Research Institute (BNERI).

The energy efficiency practice in Southeast Asia is still in its infancy stage, even though the region's energy intensity – the amount of energy used to produce each dollar of gross domestic product (GDP) – has steadily declined in recent years.

Between 2005 and 2009, ASEAN countries reduced their energy intensity by 4.97%, bringing them closer to reducing regional energy intensity by at least 8% from 2005 levels in 2015.

However, according to a statement issued at the 30th ASEAN Ministers on Energy Meeting (30th AMEM) last year, energy consumption looks set to rise by 4.4% per year till 2030 under business-as-usual conditions, driven by continued urbanisation and expanding populations. ASEAN or the Association of Southeast Asian Nations is the regional grouping for Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

With energy security taking precedence of late in national agendas, ASEAN governments are taking a harder look at energy efficiency. It is an untapped fifth fuel – that together with fossil fuels, nuclear, renewables and coal – can power ASEAN economies as they aim for sustainable economic growth, ensuring universal energy access for all and mitigating the onset of climate change.

The government as role model
Governments have to take the lead in furthering energy efficiency and for some of them, housekeeping is in order. Several ASEAN countries have existing policies and market incentives to promote energy efficiency, but must ensure better monitoring and enforcement.

There are also numerous best practices to follow, which have addressed consumer and industrial energy demand while ensuring that legal mechanisms support the above as well as new schemes to enhance efficiency.

In Thailand, in the 1990s, a fund was set up to support energy efficiency projects, using proceeds from taxes on petroleum products. Simultaneously, demand-side management plans such as public awareness campaigns and energy efficiency standards for buildings and appliances were launched.

In 2002, the Thai government decided to offer credit lines to local banks to provide loans to developers of energy efficiency projects. By 2010, this revolving fund had financed projects worth a total of US$453 million, yielding energy cost savings of around US$154 million each year.

ASEAN should start by harvesting some low-hanging fruit including instituting building codes and fuel efficiency standards in the transport sector, using LED lights for street lighting and traffic lights, and labelling appliances to promote the purchase of efficient appliances. They can draw on existing multilateral funding to promote greater consumer awareness in energy efficiency.

The Asian Development Bank has consistently funded energy efficiency projects. Between 2005 and 2011, its investments in projects with a demand-side energy efficiency component totalled US$1.8 billion. It is also setting up a new Energy Efficiency Technical Support Unit to provide technical policy and financial support in accelerating energy efficiency investments in its developing member economies.

Longer-term, as energy efficiency becomes a more widespread priority, new regulations can be formulated to take efficiency standards to the next level. This year, Singapore, which already has mandatory efficiency labeling for appliances, introduced an Energy Conservation Act requiring energy-intensive companies to appoint an energy manager, monitor and report energy use and greenhouse gas emissions, and submit energy efficiency improvement plans to the government.

Breaking down barriers
While promoting efficiency, governments will have to address the long-standing barriers to more efficient usage of energy. These would range from the price of energy and the lack of political will to change this, the lack of human resources and finance to adopt innovative projects and a lack of coordinated efforts to promote efficiency in both the supply and demand side.

The failure to price energy at its market cost is probably the most-talked about impediment to energy efficiency in Asia, and it is also a drain on public resources that could have gone towards investment in electrification and integration into the ASEAN-wide power grid.

Hopefully, this will lead to further changes as a few ASEAN countries have recently demonstrated the political will to remove subsidies.

An ability to measure the effectiveness of energy efficiency programmes is key to their further uptake. ASEAN integration in the coming years and regional platforms for discussion such as the Singapore International Energy Week (SIEW) can facilitate the transfer of technology and know-how.

In addition, countries like the Philippines, Thailand and Singapore that have developed capacity and standards for energy service companies (ESCOs) can assist others in creating ESCO accreditation systems.

While demand-side management efforts continue across the transport, residential and industrial sectors, supply-side efficiency solutions cannot take a backseat.
Lowering energy demand will mean less public infrastructure expenditure on power generation plants in the long-run but the impact of more efficient power generation in existing plants will be seen in the medium-term.

The power of five
Unfortunately even with its potential, energy efficiency on its own is not a silver bullet to ensure long-term energy security. Its key significance lies in reducing energy costs for businesses and nations alike while easing the growing burden on the environment.

Keenly aware of the importance of each element in the fuel mix, Brunei Darussalam has set up the Brunei National Energy Research Institute (BNERI) to look at paving the way for a future where oil and gas plays a smaller role in fuelling the economy and where energy efficiency and renewables carry significant weight in the kingdom's energy mix.

The rest of ASEAN too is making constant progress in pursuing resource diversification – a necessary strategy to prepare for the opportunities and uncertainties in an ever-volatile global energy landscape.

 




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Thursday, October 3, 2013

Jurong Island to launch LPG project soon

 

JI 2.0 upgrades include 2nd road link aimed at boosting petrochem hub

[SINGAPORE] More upgrading additions to Jurong Island - including a liquefied petroleum gas (LPG) terminal to import the alternative feedstock for petrochemical crackers here, and a safety and risk management centre - are expected to be launched soon.

Studies are also well underway for longer-term projects, such as having a second road link to the petrochemicals island around 2022.

These latest projects, under the government's ongoing JI 2.0 initiative, are aimed at boosting the global competitiveness of Singapore's petrochemicals sector, even as new rivals emerge in the Middle East and the US, where new plants are being built to capitalise on cheaper feedstocks from shale gas projects.

Giving an update on JI 2.0, Eugene Leong, head of Energy & Chemicals at the Economic Development Board, told The Business Times that the projects follow the recent establishment of new utilities plants employing alternative fuels such as coal/biomass and woodchips by Tuas Power and Sembcorp respectively. The latter is also set to use waste materials to produce utilities for petrochemical investors there. EDB is also encouraging more companies to set up in-house utilities plants using gas from the newly started Singapore LNG terminal.

"By providing more such options, whether in feedstocks, logistics or in other areas, greater robustness will be added to the system," he said.

The LPG terminal, for instance, will provide the petrochemical crackers here with an alternative to naphtha feedstocks.

"Globally, the economics to support the LPG project have improved as the world shifts to lighter feedstocks," he said, adding that the project is in its final stages, with EDB in advanced discussions with a private-sector investor. Earlier estimates put its cost at US$100-120 million.

Also under implementation is the JI safety and risk management centre, which is a multi-government agency effort to set up a centralised planning and strategic unit to oversee issues, such as fires and the environment on the island. A technical adviser, the UK Health & Safety Laboratory, has been appointed to advise on this, and the centre is looking at staffing requirements.

Mr Leong said that since JI 2.0 was first mooted three years ago, there have been new emerging challenges such as that posed by US shale gas. "But there is still a role for naphtha crackers like those in Singapore," he said, explaining that Asian petrochemicals demand is still growing strongly by a 10 per cent compounded annual rate, "so the region still needs some 20 million tonnes per annum of cracking capacity, which works out to close to two crackers annually".

"Also, as gas is lighter, naphtha crackers are still needed to produce the heavier petrochemicals or olefins like butadiene," he said. This explains why Petrochemical Corporation of Singapore is carrying out a plant expansion for this.

"Jurong Island's big geographical advantage is also that we have the Asian market in our backyard," Mr Leong said. And it is not just China, but also the Asean region which has been growing very strongly economically over the past few years, making this a strong regional demand centre for petrochemicals, he added.

During the same interview, Dennis Tan, director for JTC Corporation's Biomedical and Chemicals cluster, disclosed that JTC is planning to build a second road link from Jurong Island to the mainland, with this crossing the Jurong West Channel to the Jurong West area. This will help alleviate the current checkpoint congestion especially during morning peak hours.

"It will be a major engineering challenge and we are studying options of where to connect, and how to connect, including whether it should be above or below the sea."

"The mainland part is also already developed, so there will be other key considerations like its impact on transport network flows and on industries already operating there, as well as other issues like financial, environment and the land involved," he said.

"At this point, the study will take a couple of years, then we go into the necessary government approvals, followed by construction, which will also take a couple of years. So the earliest this second link can be operational will be around 2022, or in nine years' time," Mr Tan said.

Logistics-wise, a new Jurong Island barging terminal is also supporting movement of hazardous chemicals from plants there.

Complementing the usual overland trucking of containers or tanks from the petrochemicals island, the terminal, which started up last year, allows barges to take the chemicals directly to the port for onward export, he said.

On the $890 million first phase of the underground Jurong Rock Cavern oil storage, Mr Tan said that testing and pre-commissioning has started on the first two of the five caverns, with the entire phase set for completion next year, in time for its first customer, Jurong Aromatics Corporation, which is starting up then.

An operator for the JRC project is expected to be picked by year-end, he added.

 




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