Best of our wild blogs: 28 Oct 17

RAPP to retire some concessions in Sumatra amid government pressure
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As electricity market opens up, experts foresee payoffs for S’pore and marked change in power usage habits

TAN WEIZHEN Today Online 27 Oct 17;

SINGAPORE — It was an announcement that did not exactly fire up Singaporeans, and in fact, left many wondering about its mechanics: From early next year, some households will be able to choose which provider to buy their power from, a break from the current, age-old model of getting it from a sole, government-linked provider.

But while going shopping for electricity might not exactly hold the same thrill for retail-happy Singaporeans that buying consumables does, the announcement will have far-reaching results.

At its base, and possibly most appealing, level, when shopping for a power provider comes to 108,000 Jurong households from April next year — the rest of Singapore will get it from the middle of 2018 — it could result in some savings for consumers.

But quite apart from that, freeing up the market could be the start of a movement that could bring about a sea change in power consumption habits that could alter production and work cycles and lifestyles, and spark efficient usage that might save the country enormous amounts of money: Savings that could eventually be returned to consumers in the form of even lower prices.

These were the possibilities that excited analysts and other experts who spoke to TODAY in the wake of last week’s ground-breaking announcement by the Energy Market Authority (EMA) on the soft launch in Jurong of the liberalisation of energy market and the nationwide rollout next year.

The move has been in the making for some time.

Since 2001, the Government has progressively opened up the electricity market to competition to promote more competitive pricing as well as give consumers more choices.

It started with businesses, which could choose to buy electricity from retailers other than SP Group, the corporatised entity of the former electricity and gas departments of the Public Utilities Board.

In 2015, Minister for Trade and Industry (Industry) S Iswaran announced that the market will be fully liberalised to include households.

A PUSH FOR BETTER EFFICIENCY

Today, besides incumbent SP Group, which is also the power grid operator, there are 26 licensed electricity retailers, of which 18 are currently active, according to EMA.

They range from big players such as power generation companies Senoko Energy Supply and Tuas Power Supply, to large renewable energy providers like Sunseap, as well as small independent retailers.

Among those eyeing a piece of the action is Sembcorp Power, which intends to roll out a number of pricing plans for consumers with different needs.

This includes its ‘highly flexible peak and off-peak” plans, where consumers can plan their electricity usage to take advantage of lower prices during off-peak timings.

Mr Gilles Pascual, Asean power and utilities leader at consultancy firm EY, said such plans will allow households to select those that suit their needs.

“They might even change their behaviour when it comes to electricity consumption in order to achieve further savings,” he said.

SP Group, too, will offer half-hourly wholesale electricity prices to consumers for the first time.

It would allow consumers to track prices whenever they fall, so that they can shift their activities to those hours, resulting in cost savings.

Customers will be able to check the provisional prices about an hour ahead of each half-hour block, said SP, adding that prices will fluctuate according to demand and supply.

Prices will spike if there is say a power disruption at a source, such as natural gas from Indonesia, or if there are big events in Singapore that use a lot of power.

Prices generally tend to be higher during the day, with demand driven by commercial and industrial needs, and this tapers down towards the end of office hours to night time, when prices will become increasingly cheaper.

In October last year, the authorities had called for proposals to develop technical solutions for a smart metering trial that can read electricity, gas and water meters remotely so that consumers can use such data to better manage their consumption patterns.

By next year, households will be able to use these smart electricity meters as well as mobile apps such as the SP Utilities app, which tracks which period a consumer uses the most electricity or the least, to monitor changes in prices.

Analysts say that dynamic pricing would benefit Singapore, by driving consumers towards lower wastage of electricity.

It would also lead to greater energy efficiency, as the load on the power generators’ gas turbines will be spread out in a more equitable manner, said Dr Sanjay C Kuttan, programme director at Nanyang Technological University’s Energy Research Institute.

When turbines are operating at partial load due to low demand, it becomes inefficient and burns more fuel, he explained.

“Over time, such plans might lead to more positive behaviour being generated. With more people being aware of their electricity usage, it might cause them to be conscious that they are wasting electricity in some areas.”

For instance, some consumers might decide they do not need to turn on the air conditioner the whole day, and switch off lights in the day, he said, adding that they might also shift some activities, such as doing the laundry, to night time instead.

In the industry, the use of pricing and technology by authorities to encourage consumers to optimise their energy use is called demand side management.

Mr Sharad Somani, Asia Pacific head for power and utilities at KPMG Singapore, said that for electrocity retail liberalisation to be a success, consumers need to understand “that this is not just about price competitiveness”.

“Public education around the overall optimisation of consumption through effective demand side management and usage pattern analytics should come first,” he added.

“Once consumption is optimised, it can lead to cost savings and thereby give consumers higher value for money.”

EMA, citing a Stanford University study, said that every megawatt reduction of peak demand in Singapore translates to a systems-wide saving of about S$1.6 million.

According to EMA, Singapore consumed about 49,000 gigawatt hours (GWh) of electricity in 2016 — enough to power all public housing units in the country for about 11 years.

The industrial, commercial and services sectors accounted for almost 80 per cent of the usage, with households using 15.6 per cent.

EMA has started demand side management with the commercial and industrial sector.

Last year, it launched Project OptiWatt, a pilot for companies to test the viability of initiatives to optimise energy usage.

Some examples include automating chillers to reduce energy use, and using thermostats with built-in sensors to improve peak loads.

Preliminary results have shown some reduction in energy use during peak periods.

For instance, the Agency for Science, Technology and Research has shifted about 0.3 — 0.4 MW of its consumption by setting its washers and sterilisers to operate outside the peak period.

WHAT CAN HOUSEHOLDS EXPECT NEXT YEAR?

From next year, consumers can expect a mix of retailers offering anything from conventional electricity to solar energy, as well as bundled deals.

Retailers say they aim to offer customers price plans that are cheaper than SP’s regulated tariff rates.

Sunseap, the largest solar energy provider here, told TODAY it is looking to offer packages that are 15 to 30 per cent lower than current rates.

While other retailers were not prepared to give specific rates, their enterprise customers have seen between 20 to 50 per cent savings since they switched from SP.

Ms Valerie Lee, general manager of Sembcorp Power, said that in overseas markets such as Australia and Japan, liberalisation and the entry of new players had led to greater price competition and transparency for consumers, as well as targetted pricing plans to suit different consumers’ needs.

“Liberalisation can also give rise to innovative partnerships, and even increase the uptake of technology solutions such as IoT (Internet of Things) applications and asset management tools.”

For instance, in Japan, electricity retailers have partnered a wide range of companies, such as supermarkets and telcos, to offer bundled deals and cross promotions.

But Mr Allan Loi, a research associate at the Energy Studies Institute at the National University of Singapore, warned that not all plans will be suitable for consumers.

“Yes with such plans, there is the potential to pay lower costs. But unlike SP’s fixed tariff prices, these dynamic pricing plans might be very volatile, and not for the risk-averse or low-income consumers. Consumers will need to monitor these prices themselves.”

It is also unclear whether consumers will be charged for switching suppliers, which Mr Loi noted is the case in places such as Texas, United States.

“There have been complaints because these switching fees can be quite high, at over $100. So this has deterred consumers from switching. In Singapore, the government has to see if any administrative fees charged by the retailers are reasonable, or should be there at all,” he said.

A survey by Sembcorp this year found that one of the main reasons cited by consumers not in favour of a switch in supplier was the trouble they would have to go through.

Many of the 400 respondents added that they might be lured to switch if there were lower rates, flexible contract periods, or attractive bundled packages.

The EMA said that the process for switching suppliers will be seamless.

“Under a fully liberalised market with various retailers to choose from, consumers may wonder if they would receive varying levels of reliability and quality of electricity supply. There is nothing to worry about,” said the EMA in response to queries by TODAY.

“All consumers will receive their electricity supply through the same power grid, managed and operated by SP Group. As such, the reliability and quality of their electricity supply will remain the same, regardless of their choice of retailer. Consumers are advised to contact SP Group’s Electricity Service Centre if they do experience any electricity supply interruption.”

In an interview with TODAY, SP Group said that it will be overseeing the switchover process, which will be much like how consumers switch telcos.

“Consumers will be able to switch seamlessly,” said Mr Chuah Kee Heng, Managing Director of SP Services.

“We will switch consumers not just from SP to retailer A, but also from retailer A to retailer B. The process will take a few days, but there will be no interruption to the electricity supply in the process.”

Although SP will face more competition with the opening up of the market, it is also tapping on other opportunities that come with it. For instance, it intends to provide services to newer retailers which might not have a full suite of support services. These will include call centre and billing services, said Mr Chuah.

For a fee, SP’s 130 call centre agents will provide customer support on behalf of these retailers, and they will be trained on their services and products, he said. The number of call centre agents will also be scaled up if necessary.

SP is also planning to offer billing support for retailers which does not have the capacity to bill customers themselves.

OVERCOMING CHALLENGES

Experts say the experience of countries such as Australia, New Zealand, United Kingdom, parts of North America, and Japan that had liberalised their energy markets could hold some lessons for Singapore.

In these countries, there had generally been a high switch rate from the incumbent to new players, noted Mr Pascual of EY.

But an overwhelming choice of retailers, and multiple, complicated plans had also led to much confusion among consumers. Japan, for instance, has over 400 retailers.

Mr Somani of KPMG noted that in the UK, regulator Competition and Markets Authority had found that due to a bewildering number of options and price plans, residents did not always select those most suitable for them and some ended up paying more.

Since then, rules have been in place so that retail plans are sufficiently simple and easy to understand and compare, he said.

In Singapore, EMA and SP are working on an online platform that will show the various price plans in the market, to help consumers compare prices across different electricity retailers.

Mr Loi of NUS stressed that any comparison of these price plans will have to be on an apple-to-apple basis, as he expects that there will be many types of combinations, with some retailers even throwing in rewards.

He added that the authorities and retailers can work together on a clear marketing campaign that guides consumers on what to do when the market opens up.

Experts add that it may take some time for retailers and consumers to have a better understanding of what works and what does not.

“It is a significant change for household consumers who will now have a choice in selecting their power supplier. For the industry players, it is also a significant change, as traditional market players are not typically equipped to deal with household consumers,” said Mr Pascual.

“They need to establish a retail strategy, which is new to them.”

Despite the challenges, analysts are excited about the change and its potential benefits.

“The payoffs can be great, depending on the innovativeness of the retailers to meet the aspirations of the consumers,” said Dr Kuttan of the Energy Research Institute.

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Malaysia: 3 Sabah islands to be gazetted as marine areas

OLIVIA MIWIL New Straits Times 28 Oct 17;

KOTA KINABALU: The state government is in the process of gazetting Mantanani, Mengalum and Sipadan islands as total protected marine areas.

State Assistant Tourism, Culture and Environment Minister Datuk Pang Yuk Ming said the initiative was in line with the International Union for Conservation of Nature (IUCN) recommendation to have at least 10 per cent of protected marine areas by 2020.

“It is difficult to have three marine areas to be gazetted by 2020 as the process will be long.

“However, the state government has already prepared the documents (for the gazettement of those waters),” he said, adding that the gazetting of Mantanani waters would be tabled in the next cabinet meeting.

Pang said the process for Mengalum would be discussed next year and status of Sipadan, renowned as one of the world’s top dive sites, to be discussed in 2019.

Once the three sites are gazetted, marine areas will make up 13 per cent of Sabah, exceeding the IUCN recommendation.

Sabah now has more than one million hectares, or 7.6 per cent, listed as total protected areas.

The Tun Mustapha Park off Kudat waters, Malaysia’s largest marine park, was the most recent gazetted area.

Pang added that his ministry was also encouraging hoteliers and seafood restaurants to sell sustainable seafood to their clients.

He said they could buy from suppliers who adopted good practices, such as fish farming and fishing using the right nettings, among others.

Buying sustainable seafood is not only good for branding but also helps to maintain seafood supply in the long term.

“In Sabah, it has been our priority to market ourselves as an eco-destination and our marine system is one of the best in the world.

“At the (high) rate of arrivals by Chinese, South Korean and other international tourists in Sabah, the situation is putting pressure on our precious resources,” he said, adding that high quality seafood was available at more affordable prices compared to Hong Kong and China.

Meanwhile, Sabah Hotel Association past-president Christopher Chan said they were willing to comply with the ministry’s suggestions, provided the supply met the demand.

“Operators like us will look into the availability of different varieties and sizes of sustainable seafood when buying.

“If suppliers or relevant parties are able to meet our demands, it is not a problem to go with the government’s initiative.”

Sabah Fisheries director Dr Ahemad Sade said since department’s establishment 50 years ago, they had been pushing to have sustainable seafood.

“This is to ensure the fisheries source is sustainable and will be available for future generations.”

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Malaysia: Budget 2018 fails to address core environmental issues, say NGOs

mei mei chu The Star 27 Oct 17;

PETALING JAYA: Environmental groups have welcomed Budget 2018's push for green technology, but were disappointed that it did not effectively address Malaysia's core environmental issues.

"We are encouraged to see an attempt by the Government to push for more green investments with the RM5bil allotment for the Green Technology Financing Scheme," said Greenpeace Malaysia chief operating officer John Loh.

He added that he hoped this would entice more companies to invest in sustainable investments that will generate green jobs and protect the environment.

"However, we would have loved to see the Government allocate more for environmental protection as well, to support Malaysia's pledge to cut carbon emissions intensity by 40% by 2020," he said.
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"While TN50 has been mentioned, there was no reference to the equally important intermediate agenda 2030 and its Sustainable Development Goals which Malaysia has signed up to," he said.

Malaysian Nature Society (MNS) president Henry Goh agreed that the budget lacked provisions for wildlife and environmental enforcement.

"With increasing incidents of encroachment, poaching and wildlife getting killed, the budget did not address shortfalls like manpower or technologies for enforcement," Goh said.

He said more should have been allocated to address the loss of biodiversity and enhance the protection of wildlife, especially those in the critically-endangered list.

Meanwhile, Pertubuhan Pelindung Khazanah Alam Malaysia (Peka) president Datuk Shariffa Sabrina Syed Akil said the RM517mil allocation for flood mitigation was a good initiative, but that alone would not effectively reduce flash floods in the country.

She said Budget 2018 failed to go to the root of the problem, which is the loss of water catchment areas due to large-scale deforestation.

"We are going to see a lot of floods due to climate change and deforestation. Conservation and preservation should be prioritised in the budget," she said.


Not enough allocation for environmental protection, say groups
The Star 30 Oct 17;

PETALING JAYA: Environmental groups have welcomed Budget 2018’s push for green technology but cautioned that it does not address Malaysia’s core environmental issues.

“We are encouraged to see an attempt by the Government to push for more green investments with the RM5bil allocation for the Green Technology Financing Scheme.

“This will hopefully entice more companies to invest in sustainable investments that will generate green jobs and protect the environment,” said Greenpeace Malaysia chief operating officer John Loh.

“However, we would have loved to see the Government allocate more for environmental protection as well, to support Malaysia’s pledge to cut carbon emission intensity by 40% by 2020.”

“Despite increasing incidents of encroachment, poaching and wildlife getting killed, the budget did not address shortfalls like manpower or technologies for enforcement.

“More budget should be allocated to address potential biodiversity loss and enhance the protection of wildlife as some are already on the critically endangered list,” Goh said.

Pertubuhan Pelindung Khazanah Alam Malaysia (Peka) president Datuk Shariffa Sabrina Syed Akil said the RM517mil allocation for flood mitigation plans failed to tackle the root of the problem, which is the loss of water catchment areas due to large-scale deforestation.

“We are going to see a lot of floods due to climate change and deforestation, so conservation and preservation should have been prioritised in the budget,” she said.

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Vietnam is running out of sand amid construction boom

Global Construction Review 27 Oct 17;

Vietnam is looking at ways to make artificial sand after experts warned it could run out of the naturally occurring material within five years.

Scientists from the Institute of Transport Science and Technology issued the warning during a meeting with the Ho Chi Minh City Department of Transport on Friday, 20 October. However, it added that artificial sand could be made for up to 15% more cheaply than mining the natural variety, and that it makes better quality concrete.

According to the institute, Vietnam needs about 100 million cubic metres of sand every year to keep pace with the country’s steady 6% annual GDP growth, which is leading to a continuous boom in construction spending.

The shortage has been partly created by a government crackdown on illegal sand-dredging. The effectiveness of this campaign led to a 200% rise in prices, and this in turn has put pressure on infrastructure projects with large concrete requirements.

Nguyen Thanh Nam, director of the Ha Noi Highway expansion in Ho Chi Minh City, said his project was under pressure owing to the price rise. “We are looking for more detailed information on industrial sand. If the sand meets the standard, we will use it to pave the sidewalks of the Ha Noi Highways,” he said.

Sand wars

Sand along the country's local rivers have long been exported, but this has been halted by the government.

Some sand dredging projects have been a cause of considerable strife. One dispute in March of this year over the dredging on the Cau River in Bac Ninh province, near Hanoi, led to threats of violence by “organised criminals” against local government chiefs.

Meanwhile, in Cambodia nearly 50 civil society organisations lobbied the government in October last year to ban or restrict exports of sand to Singapore after it UN data revealed that nearly $750m of the building material has been exported to the island state, compared with the $5m accounted for in public records.

The petition to Suy Sem, the minister of mines, read: “We note the decisions of the governments of Vietnam, Indonesia and Malaysia to ban or restrict sand exports to Singapore due to environmental concerns, and we urge your excellency to consider instituting a similar ban or restriction in Cambodia, in the interests of Cambodia’s long-term sustainable development.”


Vietnam may 'run out of sand in 5 years'
Straits Times 26 Oct 17;

HANOI • The Vietnamese authorities are looking at producing artificial sand amid warnings by experts that the country could run out of sand within five years due to over-exploitation of the natural product, local media reported.

Scientists from the country's Institute of Transport Science and Technology warned last week that the domestic supply of natural sand was nearing an end and could be depleted in five years due to excessive exploitation.

Vietnam needs about 100 million cubic metres of sand every year for construction projects across the fast-growing country.

According to the scientists, the cost of man-made sand is also an advantage as ground rock can be 10 per cent to 15 per cent cheaper than natural sand.

Prices of natural sand have skyrocketed in the past six months after a massive crackdown on the illegal sand-dredging industry.

That created a shortfall in the supply of sand, leading to a 200 per cent rise in prices that have shown no signs of easing.

Several infrastructure projects have struggled to find new supplies as many are on the verge of exceeding their planned investments.

The institute had met last week with the Ho Chi Minh City Department of Transport to discuss new construction materials for its infrastructure projects.

Mr Nguyen Thanh Nam, director of the Ha Noi Highway project in Ho Chi Minh City, said works to upgrade and expand the highway were in trouble due to the price hike.

"We are looking for more detailed information (on industrial sand). If the sand meets the standard, we will use it to pave the sidewalks of the Ha Noi Highway," he said.

Sand along the country's local rivers have long been exported to many foreign countries.

The government has ordered the Ministry of Construction to cease sand exports.

Investors at the meeting asked the institute to announce the official price of the industrial sand and other criteria regarding the quality to be used as a legal basis to design and build transport projects.

VIET NAM NEWS/ASIA NEWS NETWORK

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