CEO Preeyanart Soontornwata targets to grow the company’s portfolio by investing in two solar plants in Vietnam with a 677MW capacity, forming ASEAN's largest solar farm.

In an exclusive interview with Asian Power, B.Grimm Power CEO Preeyanart Soontornwata talked about how the company gears up to develop the largest solar project in the ASEAN region. The company has started investing in two solar plants in Vietnam, which have a total installed capacity of 677MW.

Soontornwata shares how the company, in order to drive growth, holds the majority controlling stake in its investments, forms relational partnerships with communities and expands its in-house expert base. She gives also updates after B.Grimm Power’s US$305.9m initial public offering (IPO) in 2017.

What strategies have you employed to drive B.Grimm Power to success over the years? What is the company up to this year?
B.Grimm Power PCL (BGRIM) is part of B.Grimm Group, which has a 140-year history in Thailand. BGRIM has always been recognised by the market as a “real power developer,” with a high standard of quality and service. With a strategy of acquiring the major controlling stake in every power plant project, we are able to utilise our own in-house experts and professionals to comprehensively develop projects and manage operations with the best in class technology and highest efficiency, select the best EPC contractors and obtain the most competitive financing terms. As a result, we create “quality growth” from both technical and financial assessments and continuous improvements that lead to profit maximisation and comparatively high Equity Internal Rate of Return above our peers.

For BGRIM’s overseas ventures, the key success factor, besides our own highly experienced professionals with proven track records, is in our selection of “credible strategic local partners” who possess the expertise and experience in the business and local community relations, such as our strategic partners in the Lao PDR, Vietnam, and Cambodia.

Lastly, BGRIM continues to “improve our capital structure and financing cost” by tapping the best capital markets and exploring innovative financial instruments, such as the Infrastructure Fund. Moreover, BGRIM plans to issue THB debentures amounting up to THB 10,000-14,000 million this year for the refinancing of existing corporate and project loans and debentures, as well as funding of new investments.

How do you plan to develop ASEAN’s largest solar project and what is your outlook on solar power in the region?
Post COP21, every government has been trying to encourage investments in the renewable energy sector by upgrading their policy frameworks. The ASEAN region has a huge potential in solar energy due to its spread across the equator. IRENA estimates the power contribution by Solar PV generation to reach 54.7GW by 2025, from 3.5GW in 2016.

BGRIM recognises this opportunity and has already invested in a number of solar projects in the region, including ASEAN’s largest solar power plant, which has an installed capacity of 420MW, as well as another large-scale 257MW solar plant, both in Vietnam. The two solar power projects raise our international investment proportion from 5% to 26%, which is in line with our strategy for long-term sustainable growth of increasing investment in international renewable projects.

How has the company transformed since its initial public offering (IPO)?
We had a successful IPO on July 19, 2017, which attracted an overwhelming response from both domestic and international institutional and retail investors. The proceeds are being utilised through funding our success as promised to our shareholders.

We have used the IPO proceeds to repay loans and improved our net debt-to-equity ratio from 4.1 times to 1.5 times, which is a suitable baseline for our future growth and further development of new and existing power plant projects. Furthermore, the lower net debt-to-equity ratio has earned BGRIM a desirable credit rating of “A” with “Stable” outlook by TRIS Rating, which would enable us to manage our funding costs more effectively.

In the past 25 years, what are your company’s milestones?
In the past seven years, BGRIM has successfully developed 27 power plants, all of which were completed according to the scheduled commercial operation date (COD) specified by the power purchase agreement, and within the budgetary framework agreed with the lending banks.

Currently, we have a total operating installed capacity of 1,900MW, or 1,100MW in equity capacity, and we aim to maintain a strong growth by continuously investing in new power projects. BGRIM has already secured the capacity to construct and develop new power projects between 2018 and 2022 to achieve an installed capacity of 3,200MW, comprising 70% combined cycle cogeneration power plants and 30% renewable power plants.

What challenges has the company faced in terms of supplying power to Thailand and the rest of Asia?
The opportunity for power project investment in Thailand is significantly dependent on the Thai Power Development Plan, which is being revised by the Ministry of Energy and expected to be announced within this year or early next year. Similarly, one of the key challenges in supplying power in the international market is the government’s policy of each country, as the regulatory framework must justify the commercial aspects and offer a reasonable tariff for a project to be feasible.

Furthermore, the planning for potential project location with grid availability and suitable load factor in order to obtain the power purchase agreement and/or concession agreement is also
an important factor to consider.

What are your ambitions for Asia and what do you think are the key success factors to achieve these?
BGRIM’s ambition is to expand our business internationally to achieve an overseas installed capacity of 30% of our total installed capacity by 2022. For short-term strategy, we focus on renewable projects in CLMV, who have well-defined and clearly established power policies.

For long-term strategy, we aim to implement our SPP concept in neighbouring countries who are interested in attracting foreign investments, such as in Cambodia, where we have already initiated investment and constructed the distribution network for an industrial estate. As mentioned above, our key success factor for international investment is to engage “credible strategic local partners” who possess the expertise and experience in the business and local community relations.

President & CEO Park Ki-Hong reveals the utility’s realigned focus on developing regional floating and utility-scale photovoltaic projects, and expanding its renewable energy business with overseas IPPs.

South Korea’s largest private energy producer POSCO Energy is bent on making bigger leaps in the renewable energy space as president & CEO Park Ki-Hong explains in this exclusive interview with Asian Power. He was appointed as the CEO of POSCO Energy in March of this year. 

What are your top three priorities for POSCO Energy’s generation side?
Just like the global energy market, Korea’s energy market is encountering a wide variety of changes. In the past, the main focus of power policies was economic feasibility. Now, a shift is being made to energy policies that take into account safety as well as our environment. As Korea’s first and largest private power producer, POSCO Energy has been providing a steady supply of power to Korea’s metropolitan area. Since we are at a turning point, we need to make strategic changes to make a leap to the next stage.

Based on POSCO Energy’s 50 years of expertise in power generation, we have secured global competitiveness through projects in Indonesia and Vietnam. In addition to the current power generation business, we plan to advance into the gas business of directly importing LNG and plan to establish a smart solution through a smart grid,  in order to become a ‘global, ecofriendly energy company specializing in Gas & Power’.

In order to achieve this goal, POSCO Energy will do the following:

First, to be in step with global, eco-friendly energy development, we will actively engage in developing new & renewable IPP projects. In Korea, we will focus on developing regional floating photovoltaic projects as well as utility-scale solar photovoltaic projects centering around industrial areas and regional unit. Also, we will continue to develop business and increase operation knowhow through the off-shore wind power generation projects in Jeollanam-do Shinan.

Based on the experience we gather in Korea’s new & renewable energy business development and operation, we will actively engage in pursuing overseas IPP projects. Second, we will expand the gas business related to power generation. A collaboration system will be established between POSCO Energy’s gas generation business and POSCO’s LNG terminal in Gwangyang to build a business with internal stability.

Third, we will direct our overseas thermal generation business towards a way that minimises environmental issues. Since POSCO Energy has the ability to develop IPP projects and is well equipped with IPP business capability in Financing, O&M, etc., we will continue to develop overseas power generation projects. We will apply state of the art coal-fired power generation technology such as ultra super critical pressure to minimise environmental issues and spread eco-friendly technology. Also, based on the knowhow we collected through our domestic off-gas power generation business, we plan to actively utilise recycled energy in our ecofriendly power generation business. 

What is POSCO Energy’s biggest plan to date on the generation side — any plans of new plants, investment in other plants in other countries, etc.? What should the industry be excited about? How do you plan to achieve these?
Within Korea, a 2,100MW ultra super critical coal-fired power plant in Samcheok, a 300MW wind power generation plant in Jeollanam-do Shinan and a variety of photovoltaic power generation plants, including floating types, are in progress. In addition to the 3.4GW LNG power plant in Incheon that we are currently operating, we are also considering to develop other additional LNG power generation projects.

Regarding overseas projects, we are targeting to have the groundbreaking of a 300MW thermal generation project in Botswana, Southern Africa, within the year. The 1,200MW ultra super critical coal-fired power generation project in Vietnam, Quynh Lap 2, is also moving forward as scheduled. In addition, we are keeping an eye on good opportunities in line with new & renewable power generation projects overseas.

In parallel with these efforts, we are looking into additional project biddings with various Global IPP players that we are collaborating with and we are anticipating that there will be promising results shortly.

What do you think is South Korea’s biggest energy problem at the moment and how should this be addressed?
The biggest risk in Koreas’ electric power industry is the fact that the power demand has reached a plateau. Moreover, due to the NIMBY (Not in My Back Yard) phenomenon, there are significant difficulties in constructing infrastructure such as power plants, transmission & distribution systems, etc.

Especially, in the power generation section, there are growing concerns that the volatility in electricity exchange will become greater. Therefore, the market system should be improved to allow the power purchaser (KEPCO) and power supplier (power producer) to avoid the risks related to the fluctuation in electricity trading price.

In other words, the time has come for us to change the electricity market’s price determination method from a Cost-based Pool (CBP) to a price bidding method. If there are concerns about making an immediate change, it could be introduced gradually by implementing safety mechanisms such as price limits.

Moreover, we need to supplement market function so that it can respond to the future changes that will take place in the power industry. Measures should be taken so that the market can respond to the tasks given by energy policies, such as responding to environmental issues and increasing new & renewable energy. Also, in order to build a more flexible electricity market, we need to expand policies on evaluating the cost of greenhouse gas, limiting CO2 emission, etc. 

What has been the experience of POSCO Energy’s international investments and what are your sweet spots?
POSCO Energy’s first overseas investment was a joint project in 2010 with AES, a U.S. based company, for Mong Duong 2, a 1,200MW coal-fired power plant in Vietnam.

Afterwards, there was the 200MW PT. Krakatau off-gas power generation project that was commenced when POSCO started the construction of its integrated steel mill in Indonesia. This project was completed in 2014.

There was also a joint project that began in 2015 for a 300MW thermal power plant in Botswana, which was one of POSCO Energy’s main overseas investments. In addition to this, we have worked closely with Global IPPs in bidding projects in the Middle East, South America, etc., so we have acquired the ability required for overseas IPP projects.

The earlier stage of POSCO Energy’s overseas business was focused on Asian countries such as Vietnam, Indonesia, and Mongolia etc. where POSCO group had already set up an overseas network. Now, based on our competitiveness, we are not only targeting Asia, but also expanding our target to the Gulf Cooperation Council (GCC) countries in the Middle East and Africa. 

CEO Jaime T. Azurin targets going out of the Visayas region as its home base, and expanding to the Philippines’ bigger islands with the firm’s recent 50% stake acquisition in the Alsons Thermal Energy Corporation in Mindanao.

Before joining Global Business Power, Jaime T. Azurin’s career was focused on finance and investment banking. He was the assistant vice president in Solidbank Corporation from 1993 to 2000, and eventually moved to First Metro Investment Corporation (FMIC) as Vice President - Project Finance Division Head. This role exposed him to infrastructure projects, particularly those in the power industry. Find out more about his journey into energy and his future plans for GBP as the new president in this exclusive interview with the Asian Power.

What were the previous positions you held that led you to being the CEO now? How did these experiences help you be the leader that you are?

Prior to joining the banking industry, I worked with Benguet Management Corporation as an executive assistant to the president and head of corporate planning. In 2006, I joined GBP as Chief Finance Officer. In 2013, I was appointed Deputy Officer-In-Charge to the President, before being appointed President in 2017. My expertise as an investment banker proved to be instrumental in securing multi-billion peso loan facilities to finance the company’s expansions throughout the years. The US$583m (Php30b) loan we secured for the construction of the 3x82 MW coal-fired power plant of Cebu Energy Development Corporation (CEDC) and the 2x82 MW coal-fired power plant of Panay Energy Development Corporation (PEDC) was then the country’s first and largest peso-denominated long term fixed rate loan facility for an infrastructure project and was entirely funded by local institutions. Until then, the biggest syndicated peso loan only amounted to US$97m (Php5b), and most of the country’s biggest infrastructure projects were funded by dollar-denominated loans.

As head of business development and commercial operations, I have also helped expand the company’s operations. From 185.5 MW in 2003, we have now grown our capacity to 854 MW—a four-fold increase in just a span of 15 years. I have also helped our commercial team secure long-term power supply agreements to contract our capacity.

What are the biggest industry challenges GBP is currently facing in generation and how do you plan to overcome these?

One of the biggest challenges confronting not just GBP, but also the entire industry is the evolving government and regulatory landscape. Government regulations influence energy market dynamics as well as the development of new projects, so changes in policy have far-reaching implications. This is best illustrated by the temporary restraining order issued by the Supreme Court on the implementation of the Retail Competition and Open Access (RCOA). The TRO has halted the mandatory migration of large consumers to RCOA.

Another is the implementation of the Renewable Portfolio Standards (RPS) and the Green Energy Option as mandated by the Renewable Energy Act of 2008. Under RPS, distribution utilities must source a portion of their power supply from eligible RE producers, while under the Green Energy Option, end-users must have the option to choose RE as their energy source. All these are happening even as the FiT allocation for various renewable energy sources have begun to expire—for solar and wind projects, FiT ended in March 2016 while for biomass and run-of-river projects, FiT expired on December 31, 2017. We now see a potential gap in policy—on the one hand, we might see a rise in demand for RE due to the RPS that requires end-users to source energy from RE, but the expiration of FiT might hinder development of future RE projects that may help meet the potential increase in demand.

What is GBP’s biggest plan to date on the generation side? What should the industry be excited about?

Now that we have established base load power plants in high-growth areas in the Visayas such as Cebu and Iloilo, we have always been keen on expanding our footprint outside of the region. A key development in 2017 was setting up our presence in Mindanao by acquiring a 50% stake in Alsons Thermal Energy Corporation (ATEC). ATEC is the holding company for all base load coal-fired power plant assets of Alsons Consolidated Resources, Inc. (ACR) located in Mindanao. Our entry into Mindanao has given us a platform for growth in the island, which will enable us explore its largely untapped energy market.

Our business development team, meanwhile, has also begun exploring various opportunities—we are in the pre-development phase in Luzon (through Global Luzon Energy Development Corporation) in line with our goal to establish presence in all three island groups, and we are actively studying various opportunities into the renewable energy sector.

What are the newest generation projects that you have?

Our newest generation project was the completion of the 1x150 MW coal-fired power plant expansion of Panay Energy Development Corporation (PEDC) in Iloilo. We built PEDC’s third unit in response to Iloilo and the region’s growing demand for energy. The expansion plant commenced commercial operations on January 26, 2017.

Our partnership with Alson’s Group has enabled us to establish footing in Mindanao through Saranggani Energy Corporation (SEC) and San Ramon Power Inc. (SRPI). SEC began operating its first unit with 105 MW capacity in April 2016 while the second unit is being constructed. SRPI, on the other hand, is in the pre-development phase of a 105 MW base load coal-fired power plant in Zamboanga City. Mindanao is a particularly exciting frontier because its electricity market is still in the infancy stage and its interconnection with the Visayas grid is in the works.

What do you think is the Philippine’s biggest energy problem at the moment and how should this be addressed?

Government regulation and policy still remains the most crucial aspect in the success of the energy sector. For one, the suspension of the commissioners of the Energy Regulatory Commission (ERC) has created uncertainty among industry players, and many stakeholders have been awaiting resolution to this matter. The continued operations of the ERC, as a regulatory body, is important to the smooth functioning of the entire sector. Power supply contracts must be approved by the ERC, and without approval, developers might not be able to secure financing to fund their operations and/or expansion. Banks usually require ERC approval to show the developers have secured contracts for the projects.

There is, of course, the suspension of the implementation of RCOA, which has stalled the mandatory migration of contestable customers to RCOA. Without this, the full intent of EPIRA cannot be realised and a truly competitive energy market cannot emerge with so many regulatory barriers hampering the implementation of the law. On the one hand, we have a rapidly expanding economy that posted 6.7% growth in 2017, which is one of the highest growth rates in Asia. On the other, we have an energy sector on a wait-and-see situation due to regulatory gridlock, which might hamper prompt response to the country’s energy demands.
 

CEO Tan Sri Francis Yeoh reveals the company’s two big projects for the year worth US$5b.

Tan Sri Francis Yeoh is the managing director of YTL Group of Companies. He took over the running of his family company in 1988 and grew it into a multi-disciplinary conglomerate comprising five listed entities: YTL Corporation Berhad, YTL Power International Berhad, YTL Land & Development Berhad, Starhill Global REIT, and YTL Hospitality REIT. They have a combined market capitalisation of approximately RM35.5b (US$8.3b) as of 31 May 2017 and total assets of over RM70.1b (US$16.3b) as of 31 December 2016. He has recently been awarded as the CEO of the Year in the Asian Power Awards 2017, and we interviewed him to know more about his plans as YTL Power International Berhad’s leader.

What are your top three priorities for YTL Power’s generation side?

My top priorities right now are to successfully execute the two big projects we have on hand which total almost US$5b. Beyond that I am quite happy with YTL Power’s geographical footprint which stretches all the way from the UK, Middle East, Southeast Asia, and Australia. We hope we can build on this and achieve more scale with more acquisitions and investments. At the same time, we also need to balance out shareholder satisfaction and maintain a certain level of dividend. Last but not the least, in whatever we do and consider in the future, sustainability is a very important factor. We have an entire sustainability team in our organisation vetting our businesses to make sure we are operating at the highest standards.

Can you expound more on these two big projects? What are these and where are they located?

At present, we are constructing the first oil shale mine mouth power plant with a capacity of 2 x 235 MW (net) utilising the circulating fluidised bed boilers (CFB) technology in the Hashemite Kingdom of Jordan. The project is located at Attarat um Guhdran which is 110 km southeast of Amman. At a total investment of US$2.1b, it is the largest private sector project in Jordan to-date and is expected to meet 15% of Jordan’s annual electricity demand. Attarat Power Company (APCO) is the project company which entered into a 30-year Power Purchase Agreement (PPA) with the Jordanian national utility and single buyer NEPCO for the sale of the entire electric capacity and net electrical output. The other project we are currently developing is in Cirebon Regency, West Java, Indonesia. The 2 x 660 MW (net) coal fired power plant will utilise state-of-the-art ultra-supercritical technology. The project company, PT Tanjung Jati Power Company, has executed a PPA with PT PLN (Persero) in December 2015.

When do you expect completion?

The project in Jordan achieved financial close on 16 March 2017 and Notice to Proceed has been issued to the EPC Contractor with commercial operations scheduled for mid-2020. On the other hand, in Indonesia, we are currently arranging financing for the project, which is expected to achieve financial close in 2018.

Once commissioned, how will these two big projects boost the company with regard to capacity and profitability?

Once completed, the projects will significantly boost the group’s net effective MW capacity by 1,268 MW. The projects will contribute significantly to the group’s profitability when the power plants enter into commercial operations.

What are the biggest industry challenges YTL Power is currently facing in generation?

I have always talked about the need for a Transparent Coherent Regulatory Framework (TCRF) across the industry and, unfortunately, the evolution of TCRF is very patchy even in places like Europe, which explains why they haven’t had a significant amount of reinvestment in infrastructure for some time. In the backdrop of all this, you have private equity money flush with cheap capital crowding out the market, which means genuine power companies like us find it hard to grow and secure new projects. However, we are patient, we have a strong balance sheet and, at some point, there should be a change in the credit cycle and significant opportunities should emerge.

What is YTL Power’s biggest plan to date on the generation side?

We are always on the lookout for new opportunities in generation whether it is bidding for existing assets or investing in new projects. As mentioned earlier, one of our key objectives is to build on our existing footprint. Our track record of executing, owning, and operating assets is arguably amongst the best in the business whether it is YTL PowerSeraya in Singapore or PT Jawa Power in Indonesia. If we can execute our oil shale IPP project in Jordan and our coal-fired project in Indonesia simultaneously and on time, I think YTL Power will have a very strong standing in the industry and give us good currency to bid for new opportunities around the world.

What are the newest generation projects that you have as of the moment and what are those that are upcoming?

Our ongoing greenfield projects are our 470 MW oil shale IPP project in Jordan and our 1,320 MW coal-fired Tanjung Jati A project in Indonesia. We will look to focus on and grow our footprint in areas where we have both the technical expertise and local understanding.

What do you think is Malaysia’s biggest energy problem at the moment and how should this be addressed?

YTL Power pioneered the financing of the very first Independent Power Producer in Malaysia using ringgit denominated currency and also by issuing the first long term 15-year bond issued by the Employee Provident Fund. Since then, all the IPPs have followed suit using local financing and an Energy Commission has been established to ensure competition in generation so there are no major problems in the Malaysian power industry. I would go on and add that with this, the Malaysian power sector is in very strong stead.

YTL Power’s 4Q profit dropped by almost 50% yoy. What caused the drop and how will you bounce back?

The headline fall in profit was due to a big exceptional item the year before where we had a deferred tax credit on PT Jawa Power. On top of that, the 21-year PPA of our Malaysian Paka and Pasir Gudang IPPs came to an end. On the bright side, we have tendered for and won a 3 year 10 month extension to the previous concession in Paka so we look forward to implanting that contract successfully.
 

Check out how CEO Vikram Kailas plans to make this happen.

CEO Vikram Kailas shares that in just six years, the firm has commissioned over 1,000MW of generation capacity across 18 wind power projects, and is planning to commission another 1,000MW of wind and solar next year.

Renewable energy is at its prime in India, given its government’s strong support for sustainability efforts. According to Prime Minister Modi, the country eyes buildling 175GW of generation capacity by 2022 and achieve 40% capacity from non-fossil fuel-based sources by 2030. Mytrah Energy is amongst the companies at the helm of this energy shift in India, as it aims to own and operate 3,500MW of renewable power in the country. Its wind portfolio energy capacity is currently at 1,000MW and places the firm as the group with the largest wind data bank, being the only IPP that has over 200 masts across the country. It has also recently popped the champagne on higher profits on back of completed construction of wind turbines. Asian Power caught up with Mytrah Energy’s CEO Vikram Kailas as he shares the firm’s plans of dominating the renewable energy sector.

Please tell us about yourself. How long have you been in the industry and how long have you been with Mytrah Energy?

I co-founded Mytrah Energy in 2009. My association with the industry dates back to 2006 when I started working in New York as an investment banker serving energy companies. When we started Mytrah Energy, wind power in India was primarily driven by tax breaks and was not considered a viable sector to set up a business in. We saw things differently. Here was a sector with no reliance on subsidies, no fuel risk, and lower project risk due to shorter construction periods compared to thermal or gas projects.

So, despite having no prior operational experience, we were confident that we could build a scalable business in this space as long as we worked to a plan. My experience at these institutions has helped shape my outlook towards business and leadership. I learned the value of an empowered team that respects opinion. As a leader, I strongly believe that open debates on divergent positions lead to sharper, better-thought-out business decisions. I also believe in empowering people and delegating responsibility to them.

What are your business philosophies? 

Mytrah’s success has been predicated on an imaginative, entrepreneurial business model that’s been turned into reality through focused execution. Mytrah is India’s first utility-scale renewable independent power producer, indeed the first start-up utilities company. Building such a firm required quite a leap of faith from all stakeholders – our investors, our early employees, our business partners, our lenders since such a model was unprecedented in the industry. That’s why it took four months and 300 investor meetings to raise our initial equity capital of US$80m.

At Mytrah, we also encourage a multiplicity of voices. Building engaged and empowered teams is critical for a firm to succeed and I try to do my best to facilitate the process. I am conscious that my opinion shouldn’t be an overbearing part of processes I am involved in. You could say that I have learned to appreciate the power of the leader’s silence as a tool of empowerment.

What are the biggest challenges Mytrah Energy is currently facing? 

The first challenge is maintaining consistently high standards across all business activities. In case of project execution, for example, this means timely completion of construction activities whilst staying within budget and adhering to global quality standards. In case of plant operations, this translates into maintaining our generation assets optimally thereby ensuring high machine availability levels, and so on. Second, the firm needs to consistently take a long-term view of things. We supply energy under power purchase agreements that can run up to 25 years. To be able to deliver on its commitments consistently over such long periods, such an approach is not only recommended, it is a necessity. Third, the firm must stay abreast of the industry’s ever-evolving conditions. A couple of points can help explain this issue. One is the recent change in the mechanism used in India to award new wind power projects from a feed-in tariff to a reverse auction method. Another is the ongoing changes in project costs due to fluctuating input prices, changes in technology, and other factors.

One needs to understand the impact of such changes to take appropriate business decisions, e.g., in an auction, the firm needs to have answers to questions like – does it involve assets in specific geographies? If yes, should one have different plans for different assets? Likewise, on the issue of project economics, it may seem like the current period is one of secular decline in costs. So, one could argue that continuing decline in tariffs is in order. But does this analysis stack up if one takes a long-term view of things? These questions can’t be taken on the fly, they require thoughtful review.

What is Mytrah Energy’s biggest plan to date? What should the industry be excited about? 

Mytrah Energy commissioned over 1,000MW of generation capacity across 18 wind power projects in eight states within six years of its inception. The firm is currently constructing nearly 1,000MW of wind and solar projects and plans to commission them over the next year. The pathway for the secular growth of the Indian renewable power sector has become clearer with time. Whilst the target of 175GW by 2022 is a challenging one, the momentum gained by the industry is undeniable.

The unmet renewable purchase obligation of close to 40GW and the supply gap expected to emerge from retiring old, polluting thermal assets should help sustain the momentum.

Auction-based award of wind and solar power generation capacities is becoming the norm now. The recent auctions for wind and solar power generation capacities have seen wide ranging participation. With continued support from the Central government, we could see 15GW of capacity being auctioned out on a year-on-year basis. All of this shows that we are on the cusp of a very exciting phase of growth for the industry. 

What are the newest projects that you have as of the moment and what projects are in the pipeline?

In the wind power space, Mytrah currently has 320MW of projects under construction, whose details are available in the firm’s Annual Report. The firm recently participated in the auction of interstate wind power projects conducted by the Solar Energy Corporation of India (“SECI”) and won the right to construct 250MW of projects. The project will be constructed at Maniyachi in the Thoothukudi district of the south Indian state of Tamil Nadu. 

It will supply power to the Power Trading Corporation (“PTC”) under a 25-year Power Purchase Agreement. The power will be injected into the Central Grid for distribution utilities with whom PTC will execute Power Sale Agreements. Mytrah has recently received the Letter of Award for the project from SECI and is working towards completing it within the stipulated 18-month construction period. The other project under construction project is the 70MW Aspari Extension project in Andhra Pradesh, another southern Indian state.

In solar power, the firm is working on 500MW of projects across three Indian states – Telangana, Punjab and Karnataka. All these projects are currently under construction and are expected to become operational over the next few months. Apart from these, we have several other projects under various stages of development.
 

CEO Tomoaki Kobayakawa shares the company's plans moving forward.

It has been a year since Japan opened its energy market, and TEPCO’s retail arm only has two missions in mind: win back customers who switched providers, and etch a name in the country’s gas market by July 2017.

It has barely been months since Tokyo Electric Power Company Holdings appointed a new overall president ,Tomoaki Kobayakawa. Asian Power caught up with the then president of TEPCO’s retail arm, TEPCO Energy Partner, to discuss the company’s plans of wooing customers who have switched contracts amidst the liberalisation, and venturing into the country’s $21b gas market.

The 53-year old industry veteran has been with TEPCO since 1988 and has been engaged in the electricity business ever since, mainly focussing on corporate sales. He was appointed TEPCO Energy Partner’s CEO in April 2016 when the company transitioned to a holding system and restructured into three independent businesses.

What were the previous positions you held that led you to being the president now?

My previous position was Corporate Sales Division General Manager, Customer Service Company. For a long period of time, I was engaged in corporate sales in a deregulated and competitive environment and in solutions sales to respond to customers’ concerns over facilities in use. I was also involved in the development of a heat-pump water heater for homes, “Eco-cute”, which uses natural refrigerant — the first of its kind in the world.

Through such experience, I learned to develop strategic thinking and a sales mentality in a situation where utility sales people did not need to promote their services under a monopoly market. Under the current situation where the electricity retail market — including households — is fully deregulated, my main role is to improve sales capabilities, deepen customers’ understanding, and create new value for our company, utilising my past experience.

My theory is: “No sales persons are needed if you compete on price alone.”

What are your business philosophies?

Being in charge of the retail division, our vision is to be a company trusted by customers and that continues to strive to create new value. I believe this is a chance to develop this company from a mere electric power company to an integrated energy services company. To achieve this, it is important to have partners from different types of businesses, and we would like to create a new market and new value with collaboration that has never happened before.

TEPCO Energy Partner will continue to create new value in order to respond to the various needs of society, as well as strongly support customers’ daily lives and companies’ growth. The company aims to be a partner that develops together with its customers. I believe that the company should develop
new products and services from the perspective of society and customers, by aiming for “co-creation” rather than “competition,” even though it has to compete against rival companies in the deregulated electricity retail market.

What are your top three priorities for TEPCO Energy Partner?

TEPCO Energy Partner’s aims are the following: Putting the customer first. The company sees the full deregulation of the electricity and gas markets as a new opportunity to provide high value added and develop products and services. It will strive to be selected by customers, by providing products and services that will lead to a safe, comfortable life and support business development while achieving low costs.

Secondly, it’s about business development through service area expansion. This include customers buying not only electricity but also total energy, including gas and various services and appliances. The business will develop more by providing new services and added value, not just by earning profits from selling more energy.

The company will strive to expand nationwide and build a successful energy-saving business, not being fearful of a decrease in demand due to energy-saving or competition. Lastly is the creation of new value for customers. Facing the era of full-scale energy competition, the company will create new
markets and value through collaboration that has never happened before. Collaboration with different types of business has infinite possibilities, but will require speed. The company will create new services by collaborating with different types of businesses and maximising its speedy approach as a retailer because it takes time to do this alone.

What are the biggest challenges TEPCO Energy Partner is currently facing and what motivates you in making sure these challenges are being overcome?

Our mission, and our challenge, is that of “responsibility” and “competition”. Regarding the challenge, TEPCO Group exists to fulfill its responsibility of revitalising Fukushima. The company in charge of retail business will contribute to such efforts by earning profits through its business. However, profits are earned not by one’s own efforts but by being selected by customers. Our biggest mission is to respond to the expectations from customers and society through sales and services. Our motivation, on the other hand, is to hear customers’ voices of appreciation for our additional services that solve home appliance problems under the new rate plans, as well as to see customers who switched their contracts to new power companies returning to our services.

What is TEPCO Energy Partner’s biggest plan to date? What should the industry be excited about?

Seeing the full deregulation of the electricity retail market as a chance, TEPCO Energy Partner will develop from a mere electric power company to an integrated energy services company. It will meet the challenge of this new market by not only competing but also co-creating through collaboration with different types of businesses.

TEPCO will be exploring the gas market and will be working with Nichigas. How do you plan to tackle the competition? Nichigas, which will provide wholesale supply of gas from TEPCO Energy Partner for household gas sales, will begin sales from April 2017 and TEPCO Energy Partner will begin from July 2017.

In tandem, we aim to sell gas to about 500,000 households for the first year of full market deregulation and to about 1 million households within the 2019 fiscal year. To earn sales from about 40,000 households for the first fiscal year, TEPCO Energy Partner first needs to prepare new rate plans and services that appeal to customers. This preparation is currently in progress. The company will create profitable package services with added value that customers will want to select, combining added services of safety and security with package sales of electricity and gas.

To gain more customers for its gas sales and also activate the urban gas market — which is more difficult to enter compared with electricity — the company will also create a new platform that integrates the know-how and operational functions, such as urban gas supply, consignment operations, and
security and equipment maintenance, which both TEPCO Energy Partner and Nichigas possess.

The platform needs to be created as soon as possible to activate the gas market and the details are being examined with the aim of completion within 2017. One of the options will be the establishment of a joint venture with Nichigas.
 

Global Business Power Corporation's CEO Rolando Bacani fights to keep up with the Philippines' renewable race.

In a fight to keep up with the “bigger guys” of the Philippine power market, Global Business Power Corporation’s CEO Rolando T. Bacani shares the firm’s plans to start venturing into the renewables sector.

The Philippines under a new energy administration is under transition as coal-fired power generators are being pummeled with environment issues. Amidst the issues thrown at the sector, Bacani stands up for the industry as he and his team aims to educate the public on cleaner options and technology for coal-fired power.

Bacani joined GBPC in September 2015 and is responsible for the overall strategic and operational leadership of the company. Asian Power sat down with Bacani as he discussed company plans and targets.

How long have you been in the industry and how long have you been with GBPC? How did your previous positions help you be the leader that you are?

I’ve been in the industry for 42 years--30 years in NAPOCOR, 5 years in TRANSCO, 6 and a half years in KEPCO Philippines, and now 18 months in Global Business Power Corporation. My productive life has been in the power industry.

As the former general manager of the business development group of KEPCO Philippines, my responsibilities covered project prospecting, project technical assessment, market surveillance, environmental scanning, information gathering, and political sensing among others. I played a pivotal role in dealing with issues that affected KEPCO Philippine subsidiaries and in liaising with government officials and executives of private firms.

I am currently the president and CEO of GBPC. I learned that if you are in systems operations, basically you have to know power transmission, distribution, and generation. You have to be all around, like a jack of all trades and master of none. This is why when I joined GBPC, given that I have experience with power transmission in NAPOCOR, I was very thankful that this happened as I am given the chance to make my power industry experience come full-circle.

I have been known to be a troubleshooter when it comes to technical problems. I was one of the pioneers of systems operations in NAPOCOR. This is what I am really passionate about. With systems operations, you have a macro view of the power system and can immediately “see” the effect of your decisions.

You’ll know that sound decisions were made when stable, reliable, and reasonably priced supply of electricity were made available for the benefit of the consuming public. The power industry really excites me. In business, I think that building strong relationships is the core.

You have to make sure that relationship with stakeholders are great, if you have any, and even more so for your clients, your co-workers--it’s a matter of maintaining good relationships with people on all these segments.

What are your top priorities for GBPC?

Aside from the power plants that we’re about to put up, GBPC’s top priorities are operational excellence and safety implementation. For operational excellence, we engage the consultants to help us out in identifying those gaps in our operations and maintenance.

These gaps are those that stem from GBPC being relatively young, we have yet to make sure that procedures are strongly established and strictly followed. We have yet to streamline all processes and probe where flaws are, so that operations are smooth and well-coordinated. This is tied up to our vision that by 2020, we are the leading and most efficient energy provider in the country, we will lead in terms of policies. This is why we prioritise operational excellence at GBPC. 

Secondly, we are also prioritising safety. While we are always talking about safety in our policies and operations, we want to focus on stricter implementation most particularly among GBPC’s employees. We found out during our last project in the Panay Energy Development Corporation’s (PEDC) expansion to Unit 3, some of our contractors are disregarding safety rules and procedures. 

We then created a committee to look deeper into how we can make people more aware of the safety procedures and how to be more safety-conscious. We are coming up with several programs to make sure this happens. Among these programs is one wherein you’ll be given a “safety operations card” and you’ll be required to jot down safety issues you see around you. Lastly, we are prioritising integrated management and business continuity systems. GBPC is already ISO certified, and we eye on streamlining these and acquiring more accreditations.

What are the biggest challenges GBPC is currently facing?

There are many challenges facing GBP today, and these challenges are not unique to the company alone but to the industry in general. For one, the Retail Competition and Open Access (RCOA) provision of the Electric Power Industry Reform Act (EPIRA) presents many exciting developments for the industry. Under RCOA, the customers whose electricity consumption falls within a certain contestability are mandated to choose their own power supplier.

Right now it’s at 1 MW and is set to go lower as we progress along the timelines set by the Energy Regulatory Commission. Failure to find a supplier within the given deadline would entail premium rates. 

With RCOA, competition becomes stiffer, thereby driving innovation among industry players. To effectively manage competition, we enhance our operations and develop value-added services. We may be relatively small compared to other IPPs but we have an edge in providing power supply to Visayan islands as we have strong partnerships with those from the local distribution units.

On another note, climate change continues to be a pressing concern for all of us. As we support the growth of the country by trying to bridge the increasing demand for energy, we must also try to adhere to the highest operational standards to minimize our impact to the environment. The common connotation attached to coal is that it is always dirty.

What they do not yet know is that there are standards and limits which are required of coal-plant operators. In our case, we use technology such as the circulating fluidized bed (CFB) to curb emissions and we are proud to note that our operations have emissions way below the set limits of the government. We aim to make the public aware of this.

What is GBP’s biggest plan to date? What should the industry be excited about?

As one of Visayas’ leading independent power producers, we are very much excited to expand into Luzon. We are planning to put up a 2x335 MW coal-fired power facility, which will be our biggest upon completion. Based from our experience in our Panay operations, we have witnessed how critical energy can be in spurring growth in the regions, and we remain steadfast in supporting the government’s quest for inclusive growth.

We are also starting to venture out into more renewable energy projects. Our first project will most probably be located in Luzon and it’s a biomass energy project. It’s already running, actually, we just need to secure more permits from the Department of Energy and the Energy Regulatory Commission to get FiT. We are also working on our other project in Negros. Other RE projects that were looking into are hydro and solar plants.

And why adapted transmission and resource planning are necessary.

Guillaume is consultant for ABB’s Enterprise Software product group.

ABB's Energy Portfolio Management is a market leader supporting ISOs, utilities, power companies, and other energy market participants with critical decision tools for infrastructure investments (Power Stations, Power and Gas Lines) and applications that support daily power operations including trading, asset optimization, forecasting, market communication and settlements. Guillaume’s energy sector expertise spans power generation, transmission, distribution, retail and demand side generation, with consulting expertise in fundamental electricity market modelling, forecasting, and portfolio optimization.

Over the recent years at ABB he has been working with large utilities, market operators and project developers looking for market design providing economic welfare, renewable integration without risk on system stability and investment analysis and trading strategies optimization accounting for risks and profitability targets.

Guillaume joined ABB in 2010 and has held roles in the energy software and advisory business since then. He holds a Master's degree in Mechanical Engineering from the Swiss Federal Institute of Technology Lausanne.

He will be speaking at the 2017 Asian Power Utility Forum on April 6 at the Ritz-Carlton Mega Kuningan. 

What are your previous experiences and positions held that contributed to who you are as an expert in the power industry today?

• Master's degree in Mechanical Engineering with introductions to operational research, numerical modelling, economics and energy
• Project in Bangalore, India with ABB Research Center focusing on MicroGrid unit commitment optimization
• Consulting and presales positions with ABB Enterprise Software working on Energy Portfolio Management solutions including Distributed Energy Resources Management, market settlements and Portfolio Optimizations solutions for the European markets.
• Solution Consultant in Singapore supporting Energy Portfolio Management software and services sales across the Asia Pacific region

What are your key business philosophies?

Integrity in everything I do. Trust which is key for doing business is built through transparency and honesty. To be successful, we must build each stakeholder's trust through the integrity of our words and our actions.

Always keep Sustainability in mind. This is about balancing economic success, preservation of the environment and social progress. Sustainability considerations cover how I advise customers and how I behave in the communities where my organization operates and towards one another, while striving to ensure the health, safety and security of our employees, contractors and others affected by our activities.

Can you give us a glimpse of what you will talk about at the Asian Power Utility Forum in Jakarta?

I will talk about the challenges of balancing demand and supply given the current evolution in energy mix and how our portfolio of solutions can help. The increase of intermittent renewable and distributed energy resources requires adapted transmission and resource planning, market design and portfolio optimisation methodology and tools.

With more renewables, planning requires further risk analysis related to system constraints and market see increased needs for balancing services that can be addressed by distributed technologies. I will illustrates the needs for these modern requirements through some case studies and present how ABB’s suite of products and services can help. 

Asian Power Awards 2017's CEO of the Year shares how he brought the company to new heights.

Two years after a crisis brought by the government’s continuous undervaluation of KOMIPO, its CEO believes the firm is now on the right path to fully reversing the crisis with hefty plant profits.

When KOMIPO CEO Chung Chang-kil found that employee morale in the field had fallen far more than he expected due to the relocation of KOMIPO head office and the constant undervaluation of the company by the government, he knew that he had to make conscious efforts to increase kinship with field employees.

“As a result, KOMIPO achieved ‘B’ grade in the government’s management assessment - a three-grade jump from last year,” he says. Asian Power caught up with CEO Chung Chang-kil as he discusses the company’s current challenges and expected wins. He was also named the CEO of the Year in the Asian Power Awards 2016.

It has been five months since you took over the role, what do you think makes your leadership unique?

There are many things that I have felt as CEO whilst directly visiting field sites, conversing with employees and listening to the difficulties of various business units over the past five months with an emphasis on communication as the top priority of my management style.

I found that in the field, employee morale had fallen far more than I expected due to the relocation of KOMIPO’s head office and the government’s continuous undervaluation of the company.

To find solutions to the company’s development direction, I have made a conscious effort to increase frank dialogue and kinship with field employees.

As a result, KOMIPO achieved ‘B’ grade in the government’s management assessment — a three-grade jump from last year. When I heard that the morale of KOMIPO executives and employees has improved considerably owing to the achievement, I felt rewarded.

With this as momentum, I intend to realise the most excellent grade in the 2016 government management assessment through the accident-free innovation movement, fuel cost saving, etc., and lead the company to another takeoff.

What are your future management concepts, plans, and resolutions for KOMIPO?

I plan to carry out the company’s mission to supply stable and economical electric power, proactively respond to environmental changes, expand sustainable growth engines, and take the lead in the future energy industry, based on true communications with executives and employees as well as with customers.

To accomplish this, with ‘Faithful to the Basics,’ ‘Open Management,’ and ‘Sustainable Growth’ as my management guidelines, I will sharpen the company’s capabilities with a focus on results.

According to the results of the government’s management assessment for public organisations announced recently by the Ministry of Strategy & Finance, KOMIPO rose three grades compared with 2015. What led the firm to the achievement?

KOMIPO faced a de-facto management crisis with the announcement of the government’s 2014 management assessment results. However, the company, with the
implementation of field-centric management, including a company-wide accident-free innovation campaign, development of a data-based fault prediction system, and intensive management of subpar facilities, achieved the highest facility reliability level to earn a significantly enhanced grade in the most recent management assessment.

Also, the company purchased a generation fuel, LNG, from abroad at cheaper prices for the first time amongst domestic power companies and reduced the people’s burden. The fact that KOMIPO created about US$16m (KRW20b) in net profit from construction and operation of power plants in Indonesia also was a factor in the company scoring higher points, I think.

The result was the fruit of all employees having agonised and endeavoured together in every field with one mindset to prepare a second takeoff of the company. Going forward, KOMIPO will solidify its position as a leading organisation, fulfilling its responsibilities such as supplying stable power to the people.

In the case of coal-fired thermal power plants, two rabbits should be caught at the same time, namely, eco-friendly and high-efficiency power plants. Please introduce the measures that you are taking in this area.

Recently, new coal-fired thermal power plant technologies have been developed steadily. Joining this trend, KOMIPO is doing its best in constructing Shin-Boryeong TPP #1 & #2 at present. Owing to these technologies, the efficiency of Shin-Boryeong TPP will be about 1.3% greater compared to the existing Boryeong TPP #7 & #8 and produce electric power consuming less coal, so this power plant is expected to reduce GHG emissions by about 530,000 tons.

KOMIPO plans to build not only the Shin-Boryeong TPP but also Seoul CCPP, Jeju LNG PP, and Shin-Seocheon TPP as eco-friendly and high-efficiency power plants with the world’s top technologies. With regard to fine dust, KOMIPO is exerting utmost efforts to prevent environmental pollution, operating the latest environmental
pollution prevention facilities and discharging effluents at a much lower level than required.

What is the status of your overseas projects and what are your future plans in this area?

With the construction and operation of Cirebon coal-fired TPP (660MW) in Indonesia as the start, KOMIPO is carrying out diverse overseas power generation businesses, including O&M of Tanjung Jati TPP (1,320MW) in Indonesia and Navanakorn CCPP (110MW) in Thailand.

Amongst the projects, the construction and operation of the Cirebon TPP, a representative success case in the overseas advance of Korean power generation
businesses, began a 30-year long-term project with its dedication in July 2012 as the start. This project consists of constructing and operating a 660MW thermal power plant after KOMIPO’s organisation of a consortium with Japan’s Marubeni Corp. and Indonesia’s Indika.

From the perspective of being the first overseas coal-fired power plant project won by a domestic public power company, it enables us to evaluate KOMIPO’s global position.

KOMIPO is already operating two units of a 660MW-class power plant at Tanjung Jati in Indonesia, and through operating of two power plants in the country, the company has taken a firm position as a core organisation supplying 7% of the total electric power for Java Island, which has suffered from chronic electric power shortages.

In 2015, KOMIPO created US$14m (KRW16.5b) in revenue from the Cirebon TPP construction and operation business and cumulative net profit reached US$42.4m (KRW50b). Also, with overseas business achievements being realised in multiple sectors, KOMIPO realised about US$14m (KRW16.5b) of profit in 2015 alone, and expects to earn US$25.4m (KRW30b) in power plant operating profits annually over the next 30 years.

Non-completion of assets have long been plaguing Essar Power.

This has been consequently causing negative cash-flows, and Essar Power’s CEO is having none of these as he vows to stop project delays and catalyse profit turnaround.

Non-completion of assets have long been plaguing Essar Power.

This has been consequently causing negative cash-flows, and Essar Power's CEO is having none of these as he vows to stop project delays and catalyse profit turnaround.

Non-completion of assets have long been plaguing Essar Power.

This has been consequently causing negative cash-flows, and Essar Power's CEO is having none of these as he vows to stop project delays and catalyse profit turnaround.

Non-completion of assets have long been plaguing Essar Power.

This has been consequently causing negative cash-flows, and Essar Power's CEO is having none of these as he vows to stop project delays and catalyse profit turnaround.

India's power sector is currently battling transmission and distribution issues, aggregate technical and commerciallosses, power theft, and project delays piling up. Essar Power has had its fair share of delayed projects, and CEO KVB Reddy is fully determined to keep it at bay and consequently put a stop to negative cash-flows. Asian Power recently caught up with CEO Reddy, a power industry veteran with over 32 years of experience, as he discussed Essar Power's biggest challenges and his plans to overcome these.

How long have you been in the industry and how long have you been with Essar Power?

I have more than 32 years of experience in the power industry and have had the privilege of being involved in executing all the power projects of Essar. From nurturing projects from scratch to seeing them turnaround into PAT positive companies that are powering the nation's future, it has indeed been an eventful journey. And it is a journey that has been a constant source of motivation. Essar Power's resurgence fills me with an immense sense of satisfaction. Over the years, we have successfully identified opportunities and have persevered despite challenges.

Having joined Essar Power in 1995, I have been responsible for formulating and directing the overall strategy of the Power Business Group. I started my career with NTPC (National Thermal Power Corporation) in 1983 as Engineer Executive Trainee and rose within the ranks to become Manager. At that stage, I looked after NTPC's first 3 combined cycle gas-based power plants—right from concept to commissioning. Since then, there has been no looking back. Every new challenge
has brought with it countless opportunities to break new ground and utilise past learnings.

What were the previous positions you held and how did these help you in leading the company?

Prior to my current stint, I was Chief Operating Officer (COO), Power Business Group. In that capacity, I was responsible for leading both the operations and projects team towards building a sustainable platform to cater to Essar's expansion plans. I worked along with the operations and maintenance teams across all plants to direct the investments, resources and management of the Power Business group towards delivering higher value solutions to all our suppliers and customers – internal as well external. My experience of working in varied value chains of gas and coal based power plants has been instrumental in shaping a 360-degree perspective. It aided my decision making capabilities. I have tried to utilise all these learnings towards ensuring the future growth of our business.

What are your top three priorities for Essar Power?

The power Industry has entered a makeover phase, and we plan to take as much benefit as we can from the initiatives and policies which the Government of India is implementing for improving the sector's health. Our top priority for Essar Power remains the following:

Firstly, complete the balance units of subsidiaries' assets viz. 3 units of Paradeep power plant, 1 unit of Hazira power plant, Stage II of Mahan-Sipat transmission line, stabilise Unit II of Mahan power plant and complete Tori 1200 MW power plant. These assets once completed and operational, will generate positive cash flows, thereby improving the financial position of the company. Secondly, ensure off-take from our plants in any scenario of the industry cycle. For this, our strategy involves improving operational efficiencies so that we can produce power at the lowest cost.

Since the commodity cycle is currently favourable, we intend to take advantage by securing fuel for stranded gas based assets and other coal based assets. Lastly, align repayment to lenders to the life of the assets and ease the initial cash flow mismatch. RBI's 5/25 flexible scheme, and related initiatives are helping us achieve
this objective.

What are the biggest challenges Essar Power is currently facing? 

The biggest challenges that the company is currently facing are: a. Managing regulatory challenges: De-allocation of certain coal blocks and corresponding delays in completion of projects, resulted in negative cash-flow. While we had aligned the repayments of debt from the revenues of the assets, non-completion of assets is creating a mismatch and causing negative cash-flows; b. Obtaining fuel at economical price for both gas and coal assets and being able to sell power at viable
rates.

The motivation to ensure that these challenges are being met comes from the changes afoot in the industry itself. From the industry side, many benefits are imminent. Many of the initiatives are in their nascent stage but we hope that these will be realized in due course of time and would have long term benefit for the industry. We recently had a positive turn-around in the parent company of Salaya power plant i.e. Essar Power Gujarat Limited (EPGL). The company, for the
first time since inception of the plant, stood PAT positive in FY 15-16. This was possible majorly due to utilizing the perk of declining trend of international coal cost and exploring various origins of international coal. So, this was our first step towards making financials of our company healthier and we are even more motivated with this achievement.

What is Essar Power's biggest plan to date? What should the industry be excited about?

The biggest plan to date – Making the subsidiaries profitable by maximum utilization of resources that are ours and the ones provided by the government. We are on track of achieving this plan and have made one of our subsidiaries (EPGL) as profitable in the last fiscal. Currently, the industry is showing signs of growth and improvement. New initiatives of power ministry are catalysing a turnaround. Industry should be excited about the reforms that the government is planning to bring in all the sub sectors, right from fuel to delivering the end-product to the consumer. Also, the renewed enthusiasm around renewable energy is making an impact in the industry; We hope that the industry strikes the right balance among all the sources of power generation and optimises value for the producers.

Industry leader Aung Zaw Naing calls for better sharing of information among hydropower professionals.

In Asia, 700 million people live without electricity. To meet Asia's growing energy demands, hydropower projects in the Mekong region are developing fast. In Myanmar alone, hydropower potentials top 100MW – the region's highest. If realized sustainably, the energy produced could benefit 34 million people, or about 66 percent of the population that currently live without access to electricity. This is coupled with Lao People's Democratic Republic's energy generation potentials, which could bring electricity to nearly all rural households by 2020, drive business growth, and generate income to reduce poverty.

The challenge, however, is to develop this natural resource sustainably. Asian Power recently caught up with the president of Hydropower Developers' Working Group, Myanmar, Aung Zaw Naing as he discussed why Myanmar needs to focus on project sustainability in the hydropower sector.

Myanmar has ambitious hydropower targets but is always plagued by project delays and still remains to be among the least-powered countries in SEA. Given these, is it still possible to achieve the nationwide electrification target by 2030?

The government faces a spectrum of challenges in the electrification target process, from generation, transmission, distribution, to grid efficiency. Private sector investments in the power generation sector will help the financing requirement of the entire sector's development, and thus accelerate the electrification process.

To encourage private sector investments, investors would need clear, private sector-minded and sustainable policy and regulations which help the bankability of such capital-intensive projects. This in turns reduces the financial cost of borrowing and consequently achieves production cost efficiency. Clear and sustainable policies also create a level playing field for all investors, which encourages more private sector investment.

When it comes to sustainability, Myanmar still has a long way to go in hydropower. What is lacking in Myanmar's hydropower sector so that this may be addressed?

The Hydropower Developers' Working Group was developed on the basis that the private sector has a key role to play in the sustainability of Myanmar's hydropower sector. Our businesses rely on more sustainable operations if they are going to have a higher return in the long-term. Sustainability is not achieved overnight; it's going to require everyone working together. Myanmar members will benefit from accessibility to international developers who have tremendous experience working globally. These developers would be able to help raise the level of awareness of international best practices in environmental, social and corporate governance standards. The coming together of the local and regional companies will strengthen the overall sector and ensure we have world-class hydropower companies operating in Myanmar coupled with local companies with improved know-how.

Also, if we share information better, we will be a step closer to achieving sustainability. The Hydropower Developers' Working Group plans to promote improved information sharing between its members including hydropower companies, consultants, legal firms and suppliers and the government and other stakeholders.

I agree – better engagement of stakeholders is the way forward if we are going to achieve sustainability. The HDWG is planning to hold annual forums where we can discuss sector concerns and challenges with stakeholders. We are hoping for the HDWG to become a platform for developers to better reach out to all stakeholders and likewise, a means for stakeholders to address all members collectively. With this model we are aiming for higher impact.

Vikram Kumar admits public resources are way too meager to meet targets.

In Asia, 700 million people live without electricity. To meet Asia’s growing energy demands, hydropower projects in the Mekong region are developing fast. In Myanmar alone, hydropower potentials top 100MW – the region’s highest. If realized sustainably, the energy produced could benefit 34 million people, or about 66 percent of the population that currently live without access to electricity. This is coupled with Lao People’s Democratic Republic’s energy generation potentials, which could bring electricity to nearly all rural households by 2020, drive business growth, and generate income to reduce poverty.

The challenge, however, is to develop this natural resource sustainably. Asian Power recently caught up with International Finance Corporation's country manager for Myanmar Vikram Kumar as he discussed where Myanmar is right now in meeting its targets.

World Bank says Myanmar's hydropower potential is as much as 100MW. What's been blocking the country from fully harnessing its resources?

Vikram Kumar: Tapping into Myanmar’s hydropower potentials requires more than a flip of a switch. Technical challenges to the sector include issues surrounding procurement of projects, project allocations, the need for improved project documentation and tariff structures, among others.

Environmental risks, land use and water rights, coupled with social issues are of particular concern, which we are addressing through our work. Additionally, sound policy and regulation will provide Myanmar with the foundation it needs to sustainably harness its water resources. That’s one reason IFC is here to help.

In September 2015 we started working with Myanmar’s Ministry of Electricity and Energy and the Ministry of Natural Resources and Environmental Conservation to help build a more sustainable hydropower sector. Key to our common vision of sustainably harnessing Myanmar’s water resources is building the needed capacities among officials from both ministries. We have been ramping-up our efforts offering regular trainings on environmental and social risk management, good international and industry practices and technical topics including environmental flows of hydropower dams.

What we know is that we need to know more about the risks of hydropower development in Myanmar’s river basins. Coupled with these risks is understanding how hydropower effects communities that rely on river resources. If we understand the risks and engage stakeholders effectively, we will be able to develop more sustainably. This is why IFC and the Myanmar government will soon launch the first country-wide Strategic Environmental Assessment. This extensive assessment will shed light on the river basins that would be ideal to develop sustainably, and those which need for example, to be conserved. Better knowledge on hydropower and its impacts will support the government with strategic decisions on where and how to construct as well as the economic viability of projected projects.

Myanmar has ambitious hydropower targets but is always plagued by project delays and still remains to be among the least-powered countries in SEA. Given these, is it still possible to achieve the nationwide electrification target by 2030?

To achieve nationwide electrification targets by 2030, we are going to need to focus on ramping up grid connectivity and accessibility. At the moment, two-thirds of the population is not connected to the national electricity grid, and 84 percent of rural households lack access to electricity. These numbers are challenging, considering that only 200,000 customers were connected in 2013. According to the National Electrification Plan, Myanmar needs to increase this number to 500,000 new connections a year until 2030.

We know that public resources aren’t going to make ends meet to finance all the needs of Myanmar’s power sector. Driving private sector investments to help develop the sector sustainably is key and will also help improve the sector efficiently.

With its vast water resources, hydropower is central to Myanmar’s energy mix. But with this said, tapping other renewables will also help Myanmar achieve its goals.

When it comes to sustainability, Myanmar still has a long way to go in hydropower. What is lacking in Myanmar's hydropower sector so that this may be addressed?

Vikram Kumar: Sustainability requires strong leadership. Leadership in hydropower companies will ensure better environmental and social systems are in place improving business operations; leadership in financial institutions will ensure the right investments are made to the highest quality companies; and officials having the know-how and tools to address challenges is key for long-term sustainability.

In Myanmar, resource sharing needs to be improved to local stakeholders benefit as well. Through the SEA process we will work to engage key stakeholders including civil society, local NGOs and thought leaders on what sustainable hydropower means and how we’re going to achieve it.

When we talk about hydropower, one project does not operate in isolation. We need to think of how all development effects river basins. By changing our lens from a project-to-project to a basin-wide or cumulative perspective, we will be closer to achieving a more sustainable hydropower sector. As we have learned from our experiences in South Asia, for example, public-private sector cooperation and a commitment to improve governance in the hydropower sector will enable all stakeholders to play a role and ensure inclusivity and accountability and will promote sustainability from a basin-wide approach.

Myanmar has been inviting other international firms to invest and help develop hydropower but only a few are convinced. How should Myanmar address this and consequently drive change in the hydropower sector?

Vikram Kumar: A more sustainable hydropower sector – one with solid environmental and social guidelines, will definitely help improve the investment climate here in Myanmar. International investors evaluate the reputational and financial risk before entering an emerging market such as Myanmar. Myanmar has potential to create a competitive market place for hydropower investors that values sustainable business operations. IFC is helping by financing and mobilizing the capital needed for private sector projects that will support Myanmar’s economic growth. When we review a project for financing, we want to see how it plans to share its resources, and how it will achieve the good international practices IFC represents.
 

AT&C losses dropped from 53% to 9% since the acquisition in 2002.

CEO Praveer Sinha vows to never lose sight of keeping AT&C losses down while taking Delhi power to new heights with Smart Model Villages.

Delhi is among India’s most notorious areas when it comes to aggregate technical and commercial losses (AT&C). AT&C losses, a combination of power loss during transmission and through theft, shot up to 60% in outer Delhi areas just last month. Tata Power-DDL is at the forefront of combating the trend of skyrocketing AT&C losses, all while successfully meeting the record peak power demand of 1764 MW without any network constraint and power outage as Delhi touched an all-time high of 6188 MW in May this year.

Asian Power caught up with Tata Power-DDL CEO Praveer Sinha, a professionally trained Electrical Engineer and holds Masters of Business Law from National Law School, Bangalore. He has nearly 32 years’ experience in developing and setting up of greenfield power projects in India and abroad and has been at the helm of running successfully a public utility service in India’s National Capital City of New Delhi. Four years after joining the company, he has taken the firm to several milestones.

What were the previous positions you held that led you to being the CEO now? How did these experiences help you be the leader that you are?

In the previous assignment at Tata Power Company Ltd., I was the Executive Vice President & Project Director and was looking after developing and implementing many Power Generation Projects in India and abroad. I was spearheading Tata Power’s growth plans by developing new Greenfield and Brownfield power plants coming up in various parts of India like the states of Jharkhand, Orissa apart from Hydro Projects in Nepal, Bhutan and India. At Tata Power, I had the opportunity to commission four plants totaling 1400 MW. I was also involved in the project development and implementation of nearly 8000 MW Greenfield Power projects.

This enriched experience has helped me to develop an expertise in handling issues relating to land acquisition, project engineering, contract finalization, project execution activities and rehabilitation facilities.

What are the biggest challenges TPDDL is currently facing and what motivates you in making sure these challenges are being overcome?

Non Cost Reflective Tariff, Higher Power Purchase Cost and Liquidation of Regulatory Overhang have long been a serious bottleneck, impacting overall power sector of the country. However, Tata Power-DDL due to its operational efficiencies, reduction in losses and financial prudence has been able to partially overcome these challenges in recent years.

Some of the key challenges that the company initially faced since the acquisition in 2002 includes dealing with rampant theft of electricity in slums as well as industrial/commercial consumers, improving the sub-standard and dilapidated distribution network system using state of the art technology and processes, reducing AT&C losses from 53 per cent during the takeover to less than 9% now, improving system reliability so as to be comparable with the best utilities in India and abroad.

Changing the consumer perception and tackling the nexus between people with vested interests and power thieves who were responsible for theft were also among many challenges that needed immediate attention.

Further, in current context, I think the biggest challenge is in sustaining what our company has already achieved. We have reduced the AT&C losses by 53% to 8.88% and now reducing even by few percentage points each year will be an uphill task. But with our new Initiatives of Smart Metering and Technical Loss reductions, we are confident that we will continue our journey of further loss reduction.

What is TPDDL’s biggest plan to date? What should the industry be excited about?

With agreement on the new Sustainable Development Goals (SDGs) and the accord reached at COP 21 in Paris, the world today has an updated paradigm in which clean energy is a subset of climate change. We need both speed and scale for technology for the war on climate change.

Tata Power-DDL is preparing itself through collaborations with Technology Partners & Research Institutes in Innovations in areas like Renewable Energy Generation, Micro-Grid, Home Automation, automated Demand Response, Smart Meters & Smart Grid, E-Vehicle Charging etc. towards this challenge.

One major focus area is innovation for Solar Micro-Grid which is very pertinent for access to electricity in India as well as in most other Asian countries.

There are three dimensions of this initiative: 1) Improved Storage - Tata Power-DDL is exploring different Battery Technology and Inverter Technology in 100 KWp Solar Test Bed with improved battery performance and longevity (vs. conventional lead-acid): high ambient temperatures, deep discharge, and extended partial charge; 2) Integrated “utility-in-a-box” - Integrated Energy Management System leading to “Smart Micro-Grid” to be tested in Bihar state Micro-Grids in collaboration with MIT and GE, and; 3) Affordable energy-efficient appliances - Tata Power-DDL is exploring opportunities for financing and other business-model innovations of Energy Efficient
Appliance. A new family of affordable, energy-efficient appliances (e.g., refrigerator, fan, TV, etc.).

Tata Power-DDL is partnering with the Massachusetts Institute of Technology, GE and Tata Trust for developing two rural micro-grids in Bihar which I believe will play significant role on the future of expanding electricity access in India. I hope through implementation of this project we will develop a model in the country which will be affordable, sustainable with universal applicability. 

Star Energy's Peter Wijaya to shed light on the issue.

Peter Wijaya is the Vice President Commercial and Business Development of Indonesia-based Star Geothermal and has 20 years of experience in financial, commercial and business related matters.

He has spent 9 years in KPMG managing consultancy services, 3 years in Santos Ltd (Australia) as Manager Commercial & Financial, and 8 years in Star Energy as Vice President Commercial & Business Development

Among his key roles in his position are overseeing business acquisition and divestment, evaluating organic growth business and commercialization, negotiating on commercial matters, and enterprising wide risk management system.

Wijaya will be one of the panelists at the Asian Power Utility Forum's Jakarta leg happening on April 26 at the The Ritz Carlton Jakarta Mega Kuningan

What are your previous experiences and positions held that contributed to who you are as an industry expert today?
I wouldn’t call myself as an industry expert but I consider myself lucky to have worked for energy companies in their utmost critical stage. Take Santos for instance, during my tenure in Santos, the company was in a transformation stage from exploration into development and production. During such stages I experienced the challenges in setting up finance and commercial departments for Santos to be ready for production. Aspect of stewardship, internal audit, taxes, accounting and government reporting, joint venture mangement, crude sales and gas sales negotiations, etc, culminated up to the stage when Santos Indonesia celebrated its first gas and first oil, had been a invaluable experience for me. More recently in Starenergy group, my role as originator or leader in business acquisitions, divestments, risk assessment, and comercial negotiations, has brought not only experience but also people network - for which, the most valuable one is PLN.

What are your key business philosophies?
Listen and respect your counterpart, be creative and open minded, and always maintain your integrity.

Can you give us a glimpse of what you will talk about at the 2016 Asian Power Utility Forum?
I can talk briefly about uncertainties in geothermal business from acquisition stage to operation stage and how electricity tariff would be a determining factor in unlocking Indonesia geothermal potential.

Balance is the key to achieve ambitious conservative energy goal.

Asian Power recently caught up with Masakazu Toyoda, Chairman and CEO of The Institute of Energy Economics, Japan (IEEJ) as he discussed sustainable energy both for Japan and the rest of ASEAN.

As a Chairman and CEO of the Institute of Energy Economics, Japan (IEEJ), Mr. Masakazu Toyoda has been very active in national debate on energy mix after the Fukushima incident. Additionally, as a member of the Advisory Committee for Natural Resources and Energy, the Ministry of Economy and Trade and Industry (METI), he led his team at IEEJ to produce a variety of reports based on fair and objective quantitative analyses. These analyses induced fact-based discussion at the Committee on Basic Energy Issues and are valued by experts both inside and outside of Japan. 

ASIAN POWER: As an energy specialist, what do you think is the sustainable energy for your country? How can that energy usage be associative with ASEAN? 

The sustainable energy need to be identified from such standpoints as “3E +S”; Energy Security, Economic Efficiency, Environment and Safety”. Unfortunately, there are no perfect energy from these standpoints. Therefore, Japanese Government decided in July 2015 to have a balanced set of energy mix goals toward 2030 among renewable energy, nuclear energy and fossil fuels (gas, oil and coal), as well as ambitious energy conservation goal. Regarding fossil fuels, it was decided that cleaner use of fossil fuels should be promoted as such coal fired plants can be allowed only when USC and much cleaner technology is adopted.

ASEAN is no exception in having no perfect energy and also may need a balanced set of energy mix and adequate energy conservation targets. It is not surprising for some countries with big population to intend to have nuclear energy as well, which provides massive electricity in an efficient manner.

ASIAN POWER: In your view, what alternative energy do you think is suitable for the main energy consumption substitution and reduction in ASEAN?

Again, there is not any single perfect energy for sustainable development in ASEAN either. Although the majority of energy consumed by ASEAN could be fossil fuels even in 2040, the introduction of renewable energy need to be accelerated as much as possible in order to address Climate Change and ,wherever possible, nuclear energy with appropriate safety scheme as well,  

Among fossil fuels, gas is relatively clean and is also welcome in ASEAN. In order to increase the use of gas, we need to lower the price so that many ASEAN countries can afford to use. For this purpose, we need to cooperate in Asia to eliminate destination clause for LNG, establish Asian hub and have appropriate price signals reflecting demand and supply situation in Asia rather than oil indexation, which has lost its relevance as price signals for LNG. 

This is to assure a secure and transparent environment.

Janssen Dela Cruz is the Assistant Vice President- Business Development of Global Business Power Corporation and responsible for the development of new business initiatives and market entry strategies specific to utility scale power applications.

He also oversees the project development of new power plant projects using coal (circulating fluidized bed), diesel and biomass (bagasse) and new client acquisition and account management for power sales and energy services for Distribution Utilities/Electric Coops and Contestable Clients (CC) under RCOA. In addition, he is accountable for the management of business development efforts for main company and company subsidiaries and the development of partnership and ownership structures for capital intensive power projects.

Dela Crus will be one of the panelists at the Asian Power Utility Forum's Manila leg happening on March 8 at the Shangri-La Makati.

What are your previous experiences and positions held that contributed to who you are as an industry expert today?

Prior to being the assistant vice president of GBP's business development side, I have managed more than 450MW of long-term energy contracts and was responsible for the power sales for more than 100MW of new client requirements.

What are your key business philosophies?

Competitive and transparent business environments bring both lower rates for the consumer and higher confidence for the investors.

Can you give us a glimpse of what you will talk about at the 2016 Asian Power Utility Forum?

To build power portfolio ahead of demand. There has to be a good framework for power investments that assure investors on secure and transparent regulatory guidance.

And the intricacies of electric cooperatives.

Roderick Padua is the department manager of the Corporate Planning Office at the National Electrification Administration. He has been with the NEA for the last 28 years. His expertise ranges from energy-related feasibility studies to demand-supply strategic planning and integrating the balance scorecards for Electric Cooperatives in the country.

Padua will be one of the panelists at the Asian Power Utility Forum's Manila leg happening on March 8 at the Shangri-La Makati.

What are your previous experiences and positions held that contributed to who you are as an industry expert today?

I started work as a civil engineer facilitating feasibility studies for the capital expenditure projects of NEA’s main clients, the 119 electric cooperatives outside of Metro Manila. NEA is basically a quasi-infrastructure, quasi-lending agency, providing government subsidies and internally-generated loan facilities.

The next 27 years I was involved in basic capacities such as power load forecasting, demand-supply strategic planning, ISO certification and balance scorecard management. I acquired a Masters Degree in Technology Management from the University of the Philippines and a Diploma for Energy Planning and Policy at the University of Pennsylvania, USA. I am among a few Governance Associates that graduated from the Institute for Solidarity in Asia.

What are your key business philosophies?

There is always a better way of doing things. Continual improvement is the key to providing clients the most efficient service possible.

Can you give us a glimpse of what you will talk about at the 2016 Asian Power Utility Forum?

I will discuss the following the business portfolio of NEA--its government subsidies and low-interest loans as well as the complicated environment of the electric cooperatives. I will also tackle challenges in electrifying the barangays (99.9%), sitios (80%) and households (70%) in the rural areas.