Energy: Economic opportunities for smart grids in Asia
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Smart Grid technology can help Asia’s power sector to meet the region’s mounting electricity demand, sustainably and economically, says Angelica Buan in this report.
Extra demand for electricity in Asian households
Along with the growing industrialisation, the increasing urbanisation is also putting more demand on the power sector. A US Environment Information Administration (EIA) report indicates that the power sector accounts for 52% of the increase in primary energy demand in Southeast Asia in the New Policies Scenario offered in the report. The latter serves as the baseline scenario of the EIA, taking into account the policies and plans set by respective countries, highlighting its importance in the overall energy outlook.
Southeast Asia’s final electricity consumption, which excludes transmission losses and other non-final uses, is also rising by 4.2% per year on average, over the period 2011-2030 covered in the report.
Citing, too, the Asian Development Bank (ADB) Energy Outlook 2013 report, the region’s electricity demand is pegged to more than double between 2010-2035, reaching 16,169.2 TWh in 2035. ADB adds that this requires energy generation, transmission and distribution processes to adopt climate-smart initiatives and more efficient ways of balancing the demand and supply requirements of energy services.
Of the major end-use sectors, household consumption of electricity is increasing the fastest, and being induced by higher standards of living owing to the increasing GDP, urbanisation and expanding access to electricity.
Meanwhile, market demand for electricity in the entire Asia Pacific region is also at high levels owing to the rising consuming sectors in the region, Technavio stated in its global instrument transformer market report, covering the periods 2016-2020.
Private players in the power sector play key role in sustaining the efficient production and distribution of electricity; and thus help lower the total cost of electricity and promote fair market competition in the sector.
Southeast Asia: prime investment for Smart Grid
Targeting power efficiency requires amped up infrastructure. Latest technologies provide better access to electricity and enable consumers to maximise the benefits of having stable and sufficient power supply for homes, businesses and utilities.
The increase of investments into the Smart Grid technology in the region is expected to meet the increasing demand for higher delivery quality of electricity, not only to households but to power enterprises. This need is especially significant in ventures that involve machinery, transportation and communication, which are the key drivers to industry growth.
Southeast Asia is a centriole for Smart Grid. The study report released by US-based market research firm, Northeast Group, covering the periods 2016-2026, says that the region’s maturing Smart Grid market provides progressive potential for power consumers and vendors alike.
The regional study, which covers nine countries that include Singapore, Thailand, Malaysia, Philippines, Indonesia, Vietnam, Cambodia, Laos and Myanmar, states that nearly US$25 billion will be invested into Smart Grids over the next decade. Along with the installation of Smart Grid technologies, the directions towards it also mean that governments have to lay out Smart Grid roadmaps and deployment plans.
Singapore has already begun deploying Smart Grid, and other countries are following, including Malaysia, which has set deployment plans for rolling out over 8 million of so-called Advanced Metering Infrastructure (AMI) metres. Thailand has put up a number of pilot projects that will total over 1 million AMI metres. The rest of the region is being supported by external aid to start Smart Grid deployment, the report says.
Southeast Asia is found to have the highest projected GDP growth rate of all emerging Smart Grid markets, outside China and India. All the countries, except for Singapore and Thailand, will see GDP growth rates average near or above 5% per year through 2020, Northeast Group predicts, but it also says that these high GDP growth rates are not guaranteed, and will present structural, political, and social challenges to Southeast Asian countries.
Smart start for Asia – energy internet
Huawei, a global information and communications technology (ICT) firm based in China, expounds on how Smart Grid enables energy efficiency and sustainability through their brand of innovative ICT solutions. At a recent Intelligent Power Grid Summit held in Bangkok, Thailand, and attended by more than 300 guests, Huawei, together with Thailand’s Provincial Electricity Authority (PEA) presented the opportunities in intelligent electricity networks.
The presenters, likewise, tackled the necessity to meet the demand for power and at the same time addressed the bid to lop carbon emissions.
Zhang Lin, President of the Huawei Enterprise Business Group in Southeast Asia, said in his welcome speech, “Power companies are exploring new production and business models to address these challenges in a sustainable, reliable and economic way. Digital transformation will be critical to enabling these new capabilities.”
Huawei has been a partner to the electric power industry for more than 20 years now, providing products and solutions being deployed by over 160 electric power companies in 65 countries around the world. In 2014, Huawei brought forward the idea of building a “better connected grid”, and has since launched to become the only ICT solutions provider among the members of the Global Energy Interconnection Development & Cooperation Organisation (GEIDCO).
Jerry Ji, President of Energy Industry, Enterprise Business Group at Huawei, added, “A fully-connected energy internet will maximise the potential and value of electrical devices. The energy internet will allow cities to achieve power consumption forecasts, peak load shifting, and accurate line loss analysis, while enabling citizens to adjust their power consumption based on the realtime price of electricity. Huawei adopts a 1-2-1 strategy transformation in power industry and advancement in the energy internet.”
The 1-2-1 strategy, he said, involves Internet of Things (IoT) connection management platform that is fully open to third-parties and partners and creates value for the whole industry. Two connection modes: wired and wireless, including OneAir-IoT and broadband Power-line communication (PLC); and LiteOS IoT operating system, enable partners to quickly and efficiently build their own IoT products.
“Countries across Asia have announced plans to develop ICT infrastructure to tackle global challenges. Initiatives such as the Made-in-China 2025, Intelligent Nation in Singapore, Smart Japan and Smart Community in Malaysia, to cite a few, make ICT a crucial part of their country’s strategy to thrive and compete in the global landscape,” Ji told PRA.
He also cited how Singapore, “has dramatically evolved both economically and socially, since the announcement of its ‘Intelligent Nation 2015’ master plan in 2006.”
“(The country) is set to become the world’s first Smart Nation. Powered by smart ICT technology deployed in buildings, highways and infrastructure, Singapore delivers high quality citizen services and efficient systems to drive e-commerce while ensuring sustainability for the future,” Ji said.
As for the region’s power sector players, Ji shares this advice: “To compete effectively, power companies need cloud-based business models to gain the speed and agility to create new services and opportunities that engage customers. Huawei provides these solutions to build an open, flexible and secure platform, while achieving a sustainable and win-win ecosystem. Huawei has also focused on developing breakthrough solutions based on new ICT including cloud, big data, IoT, and Software-Defined Networks (SDN) to help power companies accelerate digital transformation.”
A power-sustainable Thailand
Energy security is one of the major factors why Smart Grid is befitting as a viable solution. As in all industrialising and emerging economies, Thailand is also addressing energy sufficiency as well as efficiency. Industry sectors are seeking assurances that the energy situation will be the least of their problems.
Soonchai Kumnoonsate, immediate past Governor of state-owned power utility enterprise, Electricity Generating Authority of Thailand (EGAT), vouched for the country’s electricity system in 2015 as stable, generating a total capacity of 38,774 MW. This could be divided into domestic power generation of 35,387 MW or 91%; and 9% or 3,387 MW imported from neighbouring countries. The electricity peak demand reached 27,346 MW, a 1.5% increase from the previous year, he added.
More than half the electricity generation is from natural gas (69%), followed by coal (20%), hydropower (8%), renewable energy (2.4%), and other sources (0.6%).
Meanwhile, Thailand’s booming economy is also accelerating its power consumption. In the latest EGAT data, the country’s mid-April demand peaked at a record 28,351.7 MW; followed by a more recent peak demand occurring during the workday after the new year festival (Songkran) that usually had “more power consumption in industry, service and household sectors,” according to EGAT.
Nevertheless, EGAT ensures it can meet the country’s demand, with sufficient electricity capacity and fuel supply coming from its operating plants located in 45 sites across the country. As well as power generation facilities consisting of three thermal power plants, six combined cycle power plants, 24 hydropower plants, eight renewable energy plants, and four diesel power plants. This is not including a nationwide-coverage high voltage transmission network that it owns and operates.
Amid the assurances given, a report says that, to meet the increasing demand, Thailand may still purchase about 9,000 MW electricity from Laos this year (or an increase of 30% from the usual 7,000 MW per year the country buys, as per the 2007 deal signed between the two countries, which expired last year).
Likewise, working towards a more secure energy situation for Thailand is Provincial Electricity Authority (PEA). The utility sector player’s current metering system covers some 18 million customers in the residential and commercial/industrial categories, according to Pongsakorn Yuthagovit, PEA’s Deputy Director of System Planning.
PEA is responsible for the generation, procurement, distribution and sale of electricity to the public, business and industrial sectors in 74 provinces, comprising 99.4% of Thailand, except Bangkok, Nonthaburi and Samut Prakarn provinces.
At the Smart Grid Summit, PEA talked about its on-going study to deploy the Smart Grid. In a nutshell, the PEA Smart Grid is a “utility information and communication technology to manage, monitor and control the generation, transmission and distribution of electrical energy.”
The PEA Smart Grid Roadmap has three stages to produce the desired benefits for its threefold goals of Smart energy, Smart life, and Smart community. Stage 1 (2012-2016) is allotted for planning and pilot project; Stage 2 (2017-2021) is targeted for large scale expansion; and Stage 3 (2022-2026) is what is called the optimal stage.
Meanwhile, PEA’s partnership with Huawei is also paving way for an innovation centre. Its location is yet to be identified, according to Wallop Kittiwiwat, Assistant Governor of PEA, who also said that other details on this plan are being formed.
“The PEA-Huawei Innovation Centre is the first of its kind delivered by Huawei specifically for the power industry. We will partner to drive innovations around Power Communication Network, Power IoT, Power Cloud Computing, big data and eLTE, demonstrating what is possible in Southeast Asia’s power industry,” Huawei’s Ji replied, when asked if the centre will also serve other countries in the region, adding that Thailand has been the company’s Southeast Asia headquarters for 18 years now.
Additionally, Ji disclosed that other developments were being lined up. “We have signed an MOU with Thailand’s Information and Technology Department, where we will share our global ICT experience to advance Thailand’s digital economy. Later this year, we will launch our OPENLAB project with Thailand to support SMEs and emerging companies across diverse industries. This OPEN-LAB is part of Huawei’s Innovation Lab System, which is supported by other leading industry players to find the best ICT solutions for the market.”
Expanding its reach in the region to harness cost savings
Aside from Thailand, Huawei also provides support to other APAC countries. “Huawei has established a significant presence in Southeast Asia. Our Smart Grid technologies are also deployed in Australia, Malaysia, Laos and India. In the future, we aim to help power companies throughout the region drive smart and responsive digital networks that make possible new services and growth opportunities,” Ji said.
Meanwhile, Ji said that the Smart Grid can match the accelerating economic growth and energy needs across Southeast Asian countries, economically yet viably sustainable.
Ji explained: “A fully-connected Power IoT has significant implications for the entire power industry. It will help enable power consumption forecasts, peak load shifting, and accurate line loss analysis, while allowing citizens to adjust their power consumption based on the real-time price of electricity. For instance, with the deployment of Huawei’s Power IoT solution, Ikeja Electricity Distribution Company (IKEDC) in Nigeria increased its meter instalments by 300%, reduced its line loss rate from 45% to 14%, and enabled convenient electricity payment,” in reply to PRA’s questions about cost values of utilising this technology.