Aurex Insights: APAC Renewable Power Generation Review Q1 2020

APAC Renewable Power Generation Quarterly Review

Aurex Group brings you its quarterly insight report for the APAC Renewable Power Generation market to provide a deeper understanding of the factors and events influencing the industry for candidates and businesses.

Optimistic Start to 2020

The first quarter of 2020 began with great optimism and a robust pipeline of first-of-a-kind projects across the APAC region. These included the first commercial offshore wind power generation in Taiwan, the first LiDARs launched in Korea and India in support of offshore wind, and the first large-scale floating solar completion in Vietnam.

However, on 23 January, China closed off Wuhan in an attempt to slow the spread of the coronavirus known as COVID-19. As the virus has continued to move globally, many countries are advising businesses to close, workers to stay home, and individuals to practice social distancing which has been impacting the market in different ways. Thus, the focus of this report will be on off-the-grid, micro-grid, and commercial and industrial (C&l) projects.

Policy Pushes Corporate PPAs

According to the Bloomberg New Energy Finance (BNEF) 1H 2020 Corporate Energy Market Outlook, in 2019, corporates purchased 19.5GW of clean power through power purchase agreements (PPAs), a 40% increase from 2018 (13.6GW) and more than triple the 2017 figures. These numbers are expected to rise in 2020 as governments push to increase the proportion of power generated from Renewables.

 In January, the Ministry of Industry and Trade in Vietnam proposed a direct PPA pilot program to be implemented between 2020 and June 2022 that would cover wind and solar power generation. It is pending approval from the Prime Minister and will likely have a national limited total size of 400-1000MW.

 Corporates in Taiwan are waiting for the government to release the details of the amended ‘Renewable Energy Development Act’ expected in the first quarter of 2020. Aurex Group’s understanding is that the plan will require major users of electricity to build renewable power plants to provide 10% of the energy they consume. This will largely affect petrochemicals, steel, electronics manufacturing, and data centres. Separately, the Ministry of Economic Affairs in Taiwan will also release a new target to develop an additional 10GW of offshore wind power from 2026 to 2035.

 From our conversations in the market, Aurex Group is hearing that there is a strong interest in the solar C&l sectors in Vietnam, Malaysia, Indonesia, and Myanmar with companies such as Canadian Solar, Scatec, Hexagon Peak, and Cleantech Solar committing additional resources to those countries. We have also seen players such as Sungrow set up new offices in the Philippines and Ditrolic Solar, headquartered in Malaysia, branch out to the Philippines and Bangladesh to provide C&l solar to shopping malls and airports.

Investment in Renewables Rises

There is also increased interest from large integrated utilities such as EDF who recently closed a deal with InfraCo Asia and SolaRiseSys on two micro-grid pilot projects in Myanmar. These projects will bring power to over 3000 people in rural areas. Interest is not limited to just foreign companies. Local producers such as Thailand’s BANPU announced in February it would invest S$100M in Singaporean C&l developer Sunseap, and Temasek and ABC World Asia also committed a combined S$50M to Sunseap in January.

Despite the global uncertainty in the financial markets, the sentiment seems generally optimistic that this will be a V-shaped plunge and recovery. There is discussion in the market that Keppel is still moving forward with its US$1.5B infrastructure investment fund, of which, 40% could be earmarked for Renewables.

There is also a belief that Temasek is in talks with an established Renewable Energy investor and developer to potentially start a new fund focused on Asia which would be in addition to a fund announced in January between EQT and Temasek focused on India. The impact of the coronavirus has not stopped Marubeni from purchasing | Squared’s Chenya Energy assets in Taiwan, JERA from buying Orsted’s stake in Taiwan’s Formosa 3 project, or CPPIB from taking over Pattern Energy.

Opportunities for Candidates

In terms of talent and hiring, social distancing has presented challenges and opportunities for employers. With potential candidates working from home, employees considering moves have been more comfortable talking to recruiters from the privacy of their own spaces. Similarly, the travel bans and subsequent lightening of workloads have allowed candidates an opportunity to reflect on their current position, employer, industry, and macro- economic outlook. For some, this means re-evaluating their current career path and exploring other options.

Another factor motivating candidate movement has been the weaker annual bonuses across financial institutions and project developers, generally down between 10 to 20% based on our conversations. The recent crashes have also dually effected candidates who were paid in shares, driving some to seek out new potential opportunities with recruiters.

Advice for Employers

For employers looking to hire in Q2 or Q3, now is the time to brief your preferred recruitment providers on the specifi- cations of the roles and increase your chances of engaging with high performing candidates who may otherwise be unavailable when their workloads return to full capacity. With a typical recruitment timeline lasting four months from conception to offer letter, plus candidates serving one to three months of gardening leave, a search starting in April is likely to yield a successful hire between August and October.

As always, our team at Aurex Group looks forward to hearing from you and we wish you a safe and healthy 2020 ahead.

 

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Amy Marietta

Consultant, Power Generation, Asia

 

Market News

  • Enel announced a record year in 2019, adding 3029MW of new capacity globally in 2019

  • Marubeni agree to buy | Squared’s Taiwan assets of over 300MW in mid-February.

  • Constant Energy completed fundraising in February for a Renewable Energy assets portfolio that will pursue C&l opportunities across Southeast Asia and work with Olympus Capital’s Asia Environmental Partners.

  • Northland Power signed an agreement in late February to acquire Dado Ocean Windfarm Co, a developer with early stage offshore wind development sites, located off the south coast of South Korea.

  • SembCorp announced it will build an 8.2MW solar system for Singapore Airlines (SIA) and SIA Engineering Company properties in Singapore scheduled to be completed in June 2020.

  • Maoneng and Chint have inked a joint venture partnership to develop 500MW of solar projects by 2021. Under the agreement, AUS200M has been committed for an initial project and a goal set to develop 2GW pipeline projects in Australia by 2025.

  • AGL Energy has agreed to buy the output of Vena Energy’s 100MW battery in Australia. According to the Head of Vena Australia, this is the first milestone in the company’s Wandoan South Project which could eventually generate 1GW of solar power and an additional 450MW of storage.

  • Thailand’s BCPG Pic, the renewable power arm of Bangchak Corporation, has agreed to buy a 45MW Laotian hydro project from Phongsubthavy Roads and Bridges Construction and Irrigation Sole Co and contribute another USS10M to building transmission lines from the plant to Vietnam. BCPG has earmarked US$1.5B to buy assets across APAC through 2025.

  • German construction and engineering company ib vogt is expanding its portfolio with new APAC projects. These include the 66MW Dunedoo solar project in New South Wales, Australia, 100-200MW of projects in advanced development in Vietnam, and being shortlisted by the Malaysian Energy Commission for a 100MW solar project at Maran, Terengganu. It is reported that ib vogt is seeking to raise capital and looking to sell equity in its Australian assets consisting of more than 750MW of greenfield solar projects.

  • China-based Xinjian Goldwind and Australia-based Lacour Energy have pre-construction planning underway for the proposed 800MW Clarke Creek Wind Farm in Queensland, Australia which will be the largest in Australia.

  • Siemens Gamesa announced on 10 January that it has completed the acquisition of Senvion’s European onshore wind farm services business, assets associated with it, and intellectual property. The company expects to complete the acquisition of Ria Blades, Senvion’s blade manufacturing business in Portugal, by the end of Q1.

  • Taiwan reduced its 20-year feed-in-tariff rate for offshore wind in 2020 to TW$5.0946/kWh from TW$5.5160/kWh in 2019. The split rate was also adjusted to TW$5.8015/kWh + Tw$3.8227/kWh from TW$6.2795/kWh + TWS$4.1422 for the first ten years plus the next ten years respectively.

  • In January, Federation Asset Management put in a bid to buy 100% shares of Windlab. The company has over 1GW of capacity in operations or under development in ANZ, Africa, and North America and is developing
    7750MW globally.

Market Moves

  • Wong Kim Yin was appointed CEO of SembCorp following Neil McGregor’s retirement in March.

  • Mark Gainsborough, EVP of Shell New Energies, announced he will step down after 39 years with Shell. Elisabeth Brinton, current Global Vice President of Strategy and Portfolio, will take his place 1 April.

  • SunPower named Joanne Solomon as CFO of Maxeon Solar, the spin-off that will contain its international photovoltaic cell and panel manufacturing operations.

  • In March, Hairo Azizi Tajudin was appointed CEO and Vinie Chong Pui Ling appointed CFO of Cenergi, a Malaysian biogas-to-electricity company with seven plants and a combined capacity of 10MW. We hear that Cenergi plans to expand to Indonesia, Philippines, Thailand, and Vietnam and across Renewables to include biomass, mini-hydro, wind, and solar.

  • Marcel lvison joined ENGIE as M&A Lead for APAC in Singapore from John Laing and Maxime Segura was promoted to Deputy Head of Digital for Southeast Asia. This follows the announcement that John Laing will stop investing in standalone wind and solar projects globally.

  • Giresh Prabhat was promoted to Managing Director of Uniper Energy Asia.

  • Andrew Toh was promoted to Managing Director, Renewables and Urban Energy Solutions for SembCorp Vietnam.

  • Agathe Roger relocated from the Philippines to France with TotalEren to Head Business Development for B2B On-grid, Corporate PPA Solutions, Virtual PPA, and Behind-the-meter.

  • Phong Han joined Mainstream Renewable Power in Vietnam as General Manager.

  • Peter Schultz has joined AboitizPower from Infunde Development where he was a Senior Vice President focusing on business development and M&A. This is the second business development hire after Almas Roxas-Aguila joined AboitizPower from Mainstream Renewable Power earlier this year.

  • Anne Le Flao joined wpd Korea as Business Development Manager for APAC from P&T Technologie SAS in France.

  • Dennis Tran joined Scatec Solar in Vietnam as a Project Developer from Mainstream Renewables where he was VP of Project Acquisitions Asia.

  • Vinash Gopalakrishnan joined JERA Energy Development Asia as Vice President of Development covering Asia and the Middle East from Siemens

APAC Renewable Power Generation Team

Giles Dalton

Managing Director

Partner

Giles@AurexGroup.com

Amy Marietta

Consultant

LNG & Power Generation

Amy.Marietta@AurexGroup.com

Angelle Yap

Lead Research Associate

LNG & Power Generation

Angelle@AurexGroup.com

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