Asia and Oceania Market Brief

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Learn about the state of hydropower generation in Asia and Oceania, including key trends and important activity.

Snowy Hydro’s 1,800-MW Tumut 3 Power Station is one of nine that could receive upgrades under the “Snowy 2.0” initiative, which looks to increase the capacity of pumped storage projects in the Snowy Mountain scheme by about 50%.

With geographical boundaries that include more than 60 countries and many of the globe’s densest population centers, it should come as no surprise that power producers in Asia and Oceania have long relied on hydro as a source of baseload electricity.

Four of the world’s top hydro-producing countries reside in the region, according to data from the International Energy Agency’s Key World Energy Statistics 2017 report, with China leading the way and almost tripling the hydroelectric production of the next closest country, Canada.

The same IEA report lists many of these countries as leaders in other renewables, including wind, solar, biomass and geothermal, causing many Asian and Oceanian countries to give added consideration to pumped storage as a means of strengthening grid resilience.

The region’s interest in expanding its hydroelectric resources is reflected in the International Hydropower Association’s most recent Hydropower Status Report, which shows a number of Asian and Oceanian countries amongst its leaders in new installed hydro capacity in 2016 (see Table 1).

In addition to conventional forms of hydropower, vast expanses of shoreline have also given rise to a growing eye toward marine and hydrokinetic energy, with many utilities looking to exploit this untapped potential as wave energy in particular moves toward commercial feasibility.

Table 1: New Hydro Capacity in 2016

Table 1: New Hydro Capacity in 2016

Finance and business

An October report from the World Bank Group listed Pakistan, Indonesia and China amongst its top five for potential in private infrastructure development investments — largely due to those countries’ burgeoning need for hydropower funding. In Pakistan alone, the World Bank said hydro investments through the first half of 2017 tallied more than US$3.6 billion.

And while many multinational development banks continue to pour funding into the construction of hydropower projects in many of Asia and Oceania’s more power-strapped countries, perhaps the most interesting facet of the region’s financial state is how much money China is pouring into other countries. The economic giant continues to finance projects in Asian and African countries — often in exchange for deals with Chinese product and service providers — though it is quickly expanding its presence in the South American and Eastern European markets as well.

In just over the past two years, Chinese companies have signed deals to finance, construct or rehabilitate the 40-MW Vitebsk plant in Belarus, 400-MW Lower Sesan 2 in Cambodia, 720-MW Karot in Pakistan, 206-MW San Gaban III in Peru, 280-MW Ivirizu in Bolivia and 112-MW Gribo-Popoli in Cote d’Ivoire, amongst many others.

Smaller cross-border agreements amongst other countries in the region were also common — particularly in those that have a great potential to be power exporters to neighboring countries.

An example is Laos, which has one of the highest estimated capacities in the region, with more than 12 GW still to be developed. In 2017, the country signed separate deals with the International Finance Corporation and Thai and Malaysian utilities, looking to expand its exports.

Regulatory update

Despite a number of countries publicly reaffirming their commitments to meeting greenhouse gas reduction targets over the past year, perhaps no political wrangling holds as much significance as the disagreement between India and Pakistan over terms of the Indus Water Treaty.

Under terms of the 1960 accord, whichever country should complete a hydro project on the Indus River first would receive priority rights to its waters. Both countries are developing plants along the river, with India undertaking the 330-MW Kishenganga and 840-MW Ratle and Pakistan completing the final stages of the 969-MW Neelum Jhelum.

The World Bank hosted a secretary-level meeting between the countries in September, though the parties have yet to come to an agreement.

The Asia and Oceania region includes more than 60 countries, with geographical boundaries spreading from eastern Europe far into the Pacific Ocean.

The Asia and Oceania region includes more than 60 countries, with geographical boundaries spreading from eastern Europe far into the Pacific Ocean.

Updates on specific activity

New development

Though a number of large projects have received financing, entered construction or begun commercial operation over the past year, below are just a few examples highlighting several of the more major developments.

China’s grip at the top of the IEA and IHA lists looks to continue as the China Three Gorges Corp. broke ground on the 16-GW Baihetan plant in August.

The $6.3 billion project will be located on the lower reaches of the Jinsha River between the borders of Sichuan and Yunnan. The facility will trail only China’s Three Gorges plant in terms of overall capacity after it is complete in 2022.

In Pakistan, the Water & Power Development Authority began impounding water behind Neelum Jhelum Dam in October 2017, leading WAPDA to project the plant’s startup date for February 2018.

Also in Pakistan, the National Transmission and Despatch Co. Ltd.’s 1,000-MW Mangla was connected to the grid and began operations in June, and work has begun on the Pakhtunkhwa Energy Development Organization’s 84-MW Matiltan plant.

Aside from its Kishenganga and Ratle projects, India has also continued its hydroelectric push — particularly in the mountainous Jammu and Kashmir region, where officials are discussing the addition of nine plants that would have a cumulative capacity of about 2,000 MW. India’s 60-MW Tuirial plant also went on line in 2017, as did 1,200-MW Teesta Stage III.

In Vietnam, commercial operations began at the 260-MW Trung Son and 38-MW Thuan Hoa projects, located on the Ma and Mien rivers, respectively.

Small hydro

Despite the high visibility of mega-projects like China’s Baihetan, small plants are responsible for much of the growth in the region as power producers see the value in eschewing complex transmission grids for more localized generation.

Many countries also have tariff schemes that make them friendly toward small hydro, such as Malaysia, which has seen an uptick in interest through the past year. In August, developer Gunung Hydropower awarded a contract to SNC-Lavalin to engineer and design the 10-MW Pulau plant in Perak, and Malakoff signed a memorandum with Touch Meccanica to develop an unspecified number of small projects in Pahang Darul Makmur in January.

Small hydro continues to be a popular option amongst the island nations that dot the area between the Indian and Pacific oceans, with many planning projects of under 20 MW in capacity.

In the Philippines, the Department of Trade and Industry announced in November that it had awarded contracts for four plants that will have a cumulative capacity of about 35 MW. The municipal court of La Trinidad also gave AboitizPower its approval to triple the capacity of three small plants located near Bineng.

Elsewhere, the International Renewable Energy Agency and Abu Dhabi Fund for Development are providing $15 million in financing to the Solomon Islands to develop small hydro, and Indonesia’s Terregra Energy Asia is raising funds for a quartet of plants in Sumatra that would add 40 MW.

Pumped storage

With many Asian and Oceanian countries listed amongst IEA’s top producers of intermittent renewables, large-scale pumped storage is playing an ever-increasing role in the region’s energy landscape.

One of the area’s more ambitious proposals is Australia’s “Snowy 2.0” expansion, which would expand the total output of the Snowy Mountain scheme’s nine powerhouses by about 50% from 3,756 MW. The upgrade has been a significant emphasis for Prime Minister Malcom Turnbull and was approved for feasibility studies in December. The company’s board of directors is expected to decide if it will invest in the $4.5 billion proposal later this year.

Also in Australia, developer Genex Power Ltd. signed a deal with McConnell Dowell Constructors and Downer EDI Ltd. to provide engineering, procurement and construction services for the Kidston complex. The project will combine a 250-MW pumped-storage component with a 270-MW solar installation.

In China, work construction is already under way on a pair of major projects. First is the 2.1-GW Zhejiang Changlongshan pumped-storage plant. Located in Zhejiang, the project is being developed by China Three Gorges, which signed a deal with the Voith Group to provide equipment for the project in July. The plant is slated to begin operation in 2021. Second is a 3.6-GW facility being built by State Grid Xinyuan Co. Ltd. The project will be the world’s largest pumped-storage plant once it is complete in 2021, the company said.

The Philippines is also looking to add pumped-storage, with utility Citicore Power Inc. receiving authorization from the country’s Department of Energy to pursue five plants in its Luzon region. These projects could have a capacity up to 2,300 MW if constructed.

Further west, the Dubai Electricity and Water Authority is studying the feasibility of a 400-MW pumped-storage project in the United Arab Emirates. The project is part of UAE’s efforts to add 2,500 MWh-worth of energy storage to its mix and will build upon the success of a previous 250-MW pumped-storage project located at Al Hattawi Dam in Hatta.

Marine and hydrokinetic energy

Though Europe has traditionally been considered the world’s hotbed for MHK development, a number of developers are beginning to harvest the shorelines along Asian and Australian coasts.

In January, Indonesian infrastructure construction company Gapura Energi Utama announced it had received an order from Finnish manufacturer Wello Oy to outfit what is being proposed as a 10-MW wave energy installation. The project will be located off Nusa Penida Island and is expected to complete the permitting process by the end of the year.

Also in Indonesia, power producer SBS Energi Kelautan completed financing for Phase 1 of its 150-MW Nautilus park in Lombok. The initial installation will have a capacity of about 12 MW and is expected to be finished by 2020.

To the north, the Philippines Department of Energy approved a San Bernardino Ocean Power Co. proposal to install a 1.5-MW in-stream project near Capul Island.

In Western Australia, the state government has awarded more than $19 million in grants for research and the construction of a 1-MW wave energy project near Albany. The plan is being developed by Carnegie Clean Energy Ltd., which will distribute power generated by the project via the South West Interconnected System.

The region’s research efforts will also be bolstered by a new marine energy technology center in New Zealand, should it receive funding from the Kiwi government. A proposal made in September by the Green Party of Aotearoa would provide financing to create the Taranaki Regional Research Institute, which would be located on the western side of New Zealand’s northern island.

Rehabilitation and upgrade work

Both modernizations and expansions of existing projects continue to be focuses throughout Asia and Oceania, so while those included below do not represent an exhaustive list, they are indicative of work being performed around the region.

In Russia, RusHydro is expanding the capacity of its Nizhegorodskaya and Saratovskaya plants with the installation of new turbines manufactured by PJSC Power Machines and Voith, respectively. The efforts continue RusHydro’s ongoing modernization initiative, which includes additions and refurbishments at many of the utility’s facilities.

Uzbekistan has also launched an aggressive $2.65 billion upgrade program that includes the rehabilitation of 14 plants. The government has a goal of increasing the share of hydro in its overall energy mix from about 13% to 16%.

Though smaller in scale, Papua New Guinea announced in December it will work with Norway’s Multiconsult Group to rehabilitate its 18-MW Yonki Toe and 10-MW Warangoi projects, using nearly $56 million in financing received from the Asian Development Bank and Town Electrification Investment Program.

Civil and dam safety work

With many Asian and Oceanian countries straddling seismically volatile areas, dam safety improvements and monitoring are a key trend.

To that end, the World Bank and Iraqi Ministry of Water Resources launched a task force in November to investigate the effects of recent earthquakes near the Iraq/Iran border. The study will pay particular attention to potential damages at the 249-MW Darbandikhan and 415-MW Dokan projects.

Flooding and other natural disasters are also cause for concern, leading Vietnam’s Ministry of Agriculture and Rural Development to partner with New Zealand in launching a five-year dam safety program. The program looks to reduce deaths caused by flooding — particularly that experienced along the 1,000-km long Ca River.

Indonesia also launched the second phase of its Dam Operational Improvement and Safety Project, which has received $250 million for its implementation from the World Bank and Asian Infrastructure Investment Bank. This new initiative will build on an effort undertaken in 2009 by providing upgrades to 140 dams throughout the country, increasing safety for more than 11 million people living along major waterways.

In India, the Ministry of Water Resources, River Development and Ganga Rejuvenation unveiled the latest version of its Dam Health and Rehabilitation Monitoring Application. In addition to this software tool, the country has introduced seven new safety guidelines under its Dam Rehabilitation and Improvement Project. The DRIP initiative has also benefitted from World Bank funding, with more than $380 million already invested. The program is scheduled for completion in 2020 and includes the rehab and improvement of about 250 dams.

Last, the physical security of dam and hydro infrastructure remains a growing concern around the world. To help improve safety at its assets, the Programme Office of Organization for Security and Co-Operation in Europe provided video surveillance equipment to the National Guard of the Armed Forces of Kyrgyzstan in October. The equipment is being installed at the 450-MW Tash-Kuymr and 800-MW Kurpsai projects, which are part of the country’s Naryn cascade. The work follows similar arrangements in 2013 and 2014 that allowed for the installation of monitoring hardware at the 180-MW Uch-Korgon and 240-MW Shamaldysai plants.

Michael Harris is editor of Hydro Review.

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