Aurex Insights: APAC Renewables Market Review 2019

At A Glance

Dear Readers,

As we come to the end of the year and a time of rePection, we would like to share our insights into the Renewable Energy market and talent trends from 2019.

Excitingly, this year was one of many firsts: Taiwan’s first commercial offshore wind farm generated its first power, the first large-scale Poating solar project to be installed in Southeast Asia was completed in Vietnam, and the first LiDARs were launched in India and Korea to measure wave and wind conditions in preparation for each country’s first offshore wind farms.

As local and national policy initiatives stimulated the industry with attractive Feed-in-Tariff (FiT) offerings and competitive auctions, developers also benefitted from advances in technology and lower costs.

With this, we saw a steady Pow of developers enter the region from Europe and the Americas, leveraging their experience from more mature markets to capitalise on opportunities in Asia. We also saw established players such as Enel, Orsted, and wpd open new ofices in the region.

We also witnessed a steady trend for companies along the value chain like EPCs and equipment manufacturers pursuing their own project development either as joint ventures, such as Swancor Holding, or independently.

As companies entered new frontiers, they looked to build teams with not only local language skills but a comprehension of regulations at local and national levels. Candidates with the ability to assuage farmers and fishermen as well as the dexterity to integrate into a multinational company proved to be in high demand yet low supply, making it a challenging environment to hire and retain talent. The few candidates with this diverse skillset have been repeatedly approached and command a premium in the market.

To provide a solution for the talent shortages, training and certification organisations were called upon to upskill candidates, mainly from the oil & gas and marine industries, to transition into renewables. Companies looked to importing leadership talent from abroad in the short-term while grooming local talent for succession.

Given the fierce competition for land, increased interest in Poating solar and Poating wind could be seen across multiple  geographies, especially Taiwan, Japan, and Korea. While traditionally these technologies would be deployed offshore, developers have opted to use them on inland lakes and rivers especially when paired with aquaculture.

While experts in Poating technology from Europe, like Ciel et Terre, have expanded into Asia to test their technology against the region’s notorious typhoons, we have seen non-traditional players such as Shell embrace Poating offshore with their acquisition of EOLFI, a French offshore wind developer. Separately, Shell also acquired a stake in Cleantech Solar, signalling interest in C&I work across Asia and India.

Generally, the development community seems bullish that 2020 will be a year for continued growth in the Renewable Energy community. We have heard that Mainstream Renewables is looking to raise additional equity for further projects, BlackRock has successfully raised US$1 billion at the first close for its Global Renewable Power III fund with a US$2.5 billion target, and Copenhagen Infrastructure Partners has raised US$1 billion for their CI NMF I fund to focus on Asia, Latin America, and Eastern Europe.

Aurex Group is also optimistic, and we look forward to bringing you further insight into the top market trends, movements and opportunities throughout 2020.

Kind regards,

ttd-2

Amy Marietta

Consultant, Power Generation, Asia

 

Market News

  • Vietnam is on track to reach 5.5GW of installed solar by the end of 2019, up from 134MW in 2018. It endeavours to approve by June Vietnam’s Power Development Master Plan 8 which will cover development through 2030.
  • The Asian Development Bank estimates Myanmar’s potential solar resource to be 27GW, but to date there is only one 170MW utility-scale project operating. We hear developers are targeting hydro and Poating solar.
  • Japan’s September solar tender failed to attract bids for the 300MW on offer as tariff levels dropped to record lows. Winners with plans to build relatively large capacity include Nozawa World for 35MW and First Solar Japan for a 21MW plant. A bright spot, however, was in April 2019 the Act on Promoting the Use of Marine Areas for the Development of Marine Renewable Energy Generation Facilities came into force which addresses systemic issues affecting offshore development.
  • China announced revised renewable subsidies totalling 30% less than 2019 rates, including an end to onshore wind subsidies by 2021, though it plans to add 30GW of offshore wind capacity by 2020.
  • India is moving forward with its first offshore wind project with the tendering of LiDAR systems in August while Australia started wind and wave studies for its first offshore wind project, Star of the South, in December, and in Korea, Macquarie and Energy Infra Asset Management launched a LiDAR for Korea’s first offshore wind project.
  • Marubeni is expected to reach financial close on its Akita Port and Noshiro Port offshore wind projects, totalling 143 MW, by the end of 2019, Japan’s first commercial scale fixed-bottom offshore wind farm. J-Power, RWE, Kyuden Mirai, Nothland Power, and Shizen Energy are also said to be developing wind projects in Japan.
  • In Vietnam, China Tian Ying is raising capital for a USD 319 million, 4000 tons/day waste-to-energy project in Hanoi.
  • Zheneng Group signalled its intention to expand waste-to-energy in South and Southeast Asia with the purchase of a 29% stake in China Jianjiang Environment Holding, now known as Zheneng Jinjiang Environment post-acquisition.
  • Ormat Technologies, a US-based alternative and renewable energy developer, acquired a 49% stake in the Ijen Geothermal Project in Indonesia in July while a subsidiary of Medco Power will retain 51%.
  • South Korea’s Hanwha Group, a solar cell manufacturer, gained approval in September to launch a renewable power retailer in Australia, Hanwha Energy Retail Australia.
  • UPC and AC Energy, a subsidiary of Philippine company Ayala, created a JV, UPC-AC Energy Solar, to develop, construct, and operate projects in APAC, initially focusing on India, South Korea, and Taiwan.
  • In May, EDPR and ENGIE created a JV to invest in fixed and Poating offshore wind globally that included combining their offshore wind assets and project pipelines (1.5GW under construction and 4GW under development).

Market Moves

  • Casper Frost Thorhauge joined Star of the South, Australia’s first offshore wind farm, as CEO from Orsted where he previously worked as CEO of the Greater Changhua 1 & 2a projects in Taiwan.
  • SUSI Partners appointed Marco Van Daele and Marius Dorfmeister as Co-CEOs while Tobias Reichmuth, Founder and CEO of SUSI Partners, will transition to Chairman of the Board and Bjorn Bajan will become deputy chairman.
  • David Povall joined Northland Power as Global Executive Vice President of Development from Acacia Renewables.
  • David Tan joined TPG as Managing Director of South East Asia from KKR and will be based in Singapore.
  • John Jackman, Ryan Chua, and Brad Kim join another Macquarie alum, Hajir Naghdy, at Stonepeak Capital Partners.
  • KKR expanded the Asia team by about 12 including Kate Richdale as Asia Pacific Strategy and Business Development from Goldman Sachs, David Luboff as Head of Asia Pacific Infrastructure from Macquarie, John Pattar as Head of Asia Pacific Real Estate from CLSA Capital Partners, Hardik Shah from Brookfield Asset Management in Mumbai, Michael de Guzman from Credit Suisse in Hong Kong, and Keith Kim from Macquarie Korea.
  • Niel Holst joined CIP as Managing Director of New Markets with a focus on Asia and Latin America.
  • Raghuram Natarajan joined Mainstream Renewable Power as CEO from Juwi Group.
  • Brent Hyde-Smith relocated from Engie’s Thailand headquarters to Korea to become Head of Korea for Engie.
  • Sundus Ramli joined Worley as the Regional Director of New Energy from Orsted.
  • Vena Energy hired Sunil Gupta as Head of South and Southeast Asia and Ari Soerono as Country Head for Indonesia.
  • SembCorp Industries hired Simon Wilson as SVP and Head of Business Development for Renewables.
  • Shift Energy Japan KK built out its leadership team hiring Paul Rhodes from Goldman Sachs as CFO, Ann Lee from BNP Paribas as Global Head of HR, and Danielle Tan as Legal Counsel.
  • wpd has hired business developers for solar, onshore wind, and offshore wind in Korea and Taiwan including Jun Lee, Jin Seok Kim, and Yuan-Ruen Tsang.
  • Total Eren has made hires for solar and wind in the Philippines, Singapore, and Korea including Junyoung Son, Andres Martin Buldu, and Henry Kim.
  • Kanaka Winoto joined ENGIE as Senior Business Developer for Indonesia from UPC Renewables
  • Keppel has built out its renewables branch hiring Mark Argar as General Manager and promoting Yew Ming Yeong to Assistant General Manager and Shivanan Sundralingam to Senior Manager of Renewables Business Development

Deals

  • Bidders for I Squared Capital’s 1.4 GW Asia Cube power and water portfolio – spread across China, South Korea, Taiwan and Vietnam – submitted proposals the first week of September in a second round. This follows I Squared’s April sale of Amplus Energy Solutions (M+), a portfolio company with 500MW of renewable distributed generation assets in Asia and the Middle East, to Malaysian oil & gas company Petronas.
  • AboitizPower acquired Mekong Wind Pte which owns and operates 39MW onshore wind farm in Ninh Thuan, for $46 million, which was previously controlled by Armstrong Southeast Asia Clean Energy Fund.
  • Mahindra Susten sold 160MW worth of solar projects in India to Hong Kong-based CLP (China Light & Power). CDPQ is a major investor of CLP’s subsidiary, CLP India. This comes months after CLP India bought a stake in three power transmission assets from Kalpataru Power Transmission.
  • CPPIB is set to acquire Pattern Energy which has 4.4GW of capacity in the US, Canada, and Japan.
  • ENGIE exploring the sale of its 30% stake in Senoko Energy, Singapore’s largest utility company.
  • Canadian Solar and Photon Energy completed development of the Suntop 1 project in New South Wales and Canadian Solar has purchased a 25% stake in the 189 MWp Suntop Solar Farm. Canadian Solar previously acquired a 51% stake in five other Photon Energy projects totalling 730 MW.
  • Japan’s Daiwa Energy & Infrastructure (DEI) acquired a minority stake in Austrian solar developer, Swimsol, in June as part of DEI’s efforts to double its energy and infrastructure assets to USD $922M from $461M now. Swimsol launched the world’s first Poating solar generation business, SolarSea, in 2014.
  • Stonepeak bought a 95% stake of Swancor Renewables while Swancor Holding will retain the remaining 5%
  • Hudson Sustainable Investments will take private Sky Solar Holdings, a Hong Kong based developer with 135MW of solar farms in Japan, Canada, and Europe as well as a 500MW pipeline in Japan, Canada, Chile, US, and Uruguay.

Contact Us

Giles Dalton

Director

Head of Asia Pacific

giles@aurexgroup.com

Amy Marietta

Consultant

LNG & Power Generation

Angelle Yap

Lead Research Associate

LNG & Power Generation

angelle@aurexgroup.com

+65 9073-8533

For more market insights or confidential discussion on renewable opportunities, please contact our team today.

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