By the time you read this, the winners of this year’s Power Engineering International Asia Projects of the Year awards will have carried off their trophies.
Awarded at a Gala VIP ceremony at POWER-GEN Asia in Bangkok earlier this month, the four winners represent the best of project design and innovation in the coal, gas, distributed generation and renewables arenas (see powerengineeringint.com for details).
The four projects deploy state-of-the-art equipment to meet Asia’s increasing demand for power.
However, the winners also represent more than just the best in technology – some also demonstrate innovative financing, which in a post-recession market is crucial.
For example, the winner of the renewables project – the 150 MW Burgos Wind Farm – is a groundbreaking project, being the first wind farm project financing in the Philippines to reach financial close, and also the first to be banked under the Philippines’ new feed-in tariff regime.
Another region alive to the potential and possibilities of power project financing is the Middle East.
Alex Thursby, chief executive of the National bank of Abu Dhabi, says that to meet the energy needs of the Middle East will “require huge levels of investment in projects that provide additional generation capacity and improve the efficiency of our energy use”.
He says that “since this will require innovative approaches to financing energy, we believe it also presents real opportunities for the region’s banking sector. What at first appear to be challenges, as the region makes the transition to a new energy future, can become the source of the opportunity, when it is recognized that the situation will demand innovative responses in technology, industry and infrastructure – all of which need to be financed.”
European electricity trade group Eurelectric also believes that a concerted effort is needed to attract investment in the electricity sector in the Middle East and North Africa.
Although many countries in the region have set ambitious targets to revise their energy strategies and are increasingly turning to renewable energy and energy efficiency measures, they are, according to Eurelectric, “not attracting sufficient private capital and investment in electricity generation assets and infrastructure”.
Eurelectric has published a policy document in which it outlined actions needed to unlock secure investments in the MENA region and you can read its recommendation in our article on p4.
Meanwhile, Europe continues to suffer the flip side of the financing coin, and its woes have again been highlighted.
Hildegard Màƒ¼ller, head of the German Association of Energy and Water Industries (BDEW), said that “the situation for existing power plants is getting worse – an ice age is looming for the construction of new plants. Every second planned facility is hanging by a hair.”
And Andreas Willi, an analyst at JPMorgan, said recently: “Most countries in continental Europe will probably not build new fossil power plants this decade.”
Siemens has sold 75 of its top-of-the-range H-Class turbines since 2011, but only three in Europe, including two in Germany: the rest were primarily in the US, South Korea and Egypt. Indeed, Egypt is proving to be fertile ground for energy firms – in recent months GE, Siemens and Ansaldo have all secured massive power contracts in the country. (See our focus on GE’s 2.6 GW fast-track project on p12).
Siemens chief executive Joe Kaeser said this summer: “The way in which Germany’s energy transition is being handled has made it impossible for us ever to sell our fossil-fuel-related production and solutions in Germany.”
Bilfinger, the German engineering and services group, has slashed profit guidance six times since mid-2014. The company’s Herbert Bodner said: “The energy transformation in Germany has led to a completely uncontrolled decline in investment in fossil-fuel-based electricity generation.
“Uncertainty hinders any willingness to invest. Our customers in the power business segment are in this situation, not only in Germany, but in neighbouring countries too. German energy policy has been infectious.”