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ADB-Supported Kyrgyz Republic’s Largest Hydropower Plant Achieves Key Milestone

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photo: ADB

JSC Electric Power Plants (EPP), the major state-owned power generation company in the Kyrgyz Republic, today announced the award of a turn-key contract for the Asian Development Bank-supported (ADB) modernization of the Toktogul hydropower plant (HPP) to a joint venture of GE Hydro (France) and GE Renewables (Switzerland) for $104 million.

The modernization project includes new state-of-the-art units which will improve safety, efficiency, reliability, and availability of the Toktogul HPP, located on the Naryn River in the Jalal-Abad Province and considered the country’s largest and most important hydropower plant, increasing its overall capacity to 1,440 megawatts. The additional capacity will be sufficient to supply about 200,000 households for an entire year.

ADB and the Eurasian Development Bank (EDB) financed the replacement of four units of the Toktogul HPP, which has been generating about 6,000 gigawatt hours per year for 43 years. Because of aging equipment, however, the plant has experienced increasing number of failures in recent years.

“ADB has been supporting the energy sector in the Kyrgyz Republic since 1996 as the rehabilitation, replacement, and augmentation of power sector assets are critical for energy security in the country”, said Candice McDeigan, ADB’s Country Director for the Kyrgyz Republic.

“The phased rehabilitation of the Toktogul plant has been the key priority for ADB’s energy sector support in the Kyrgyz Republic and its timely rehabilitation is key to the country’s plan to export summer surplus to Afghanistan and Pakistan through the CASA-1000 power transmission line”, said Ashok Bhargava, Director for the Energy Division at ADB’s Central and West Asia Department.

EPP commenced phased rehabilitation of the Toktogul HPP project in 2012, starting with the refurbishment of the secondary electrical and mechanical equipment, the rehabilitation of two Toktogul units, and later completed by the remaining two Toktogul units, with an overall target completion by 2024-2026. The latest milestone was a result of the extensive competition among all major players and EPP’s innovative approach to procurement and design, which brought in competitive pricing and accelerated completion of the project by 3 years.

“In 2016, EPP decided to fast track the procurement of the four turbines and generators of the Toktogul HPP through single procurement for economies of scale, resulting to completion three years early. With ADB support, the EPP conducted multiple roadshows to improve the

procurement design based on industry feedback and international best practice to increase completion for the project,” said EPP General Director Uzak Kydyrbaev.

GE Capital, the ultimate parent of the GE consortium, has provided a guarantee to support its operation in the Kyrgyz Republic. GE has committed to commission the first unit by November 2020, and one additional unit each year by November 2023

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EU Doubling Renewables by 2030 Positive for Economy, Key to Emission Reductions

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The European Union (EU) can increase the share of renewable energy in its energy mix to 34 per cent by 2030 – double the share in 2016 – with a net positive economic impact, finds a report by the International Renewable Energy Agency (IRENA), launched in Brussels.

Presenting the findings during a launch event, ‘Renewable Energy Prospects for the European Union’ – developed at the request of the European Commission – IRENA’s Director-General Mr. Adnan Z. Amin highlighted that achieving higher shares of renewable energy is possible with today’s technology, and would trigger additional investments of around EUR 368 billion until 2030 – equal to an average annual contribution of 0.3 per cent of the GDP of the EU. The number of people employed in the sector across the EU – currently 1.2 million – would grow significantly under a revised strategy.

Raising the share of renewable energy would help reduce emissions by a further 15 per cent by 2030 – an amount equivalent to Italy’s total emissions. These reductions would bring the EU in line with its goal to reduce emissions by 40 per cent compared to 1990 levels, and set it on a positive pathway towards longer-term decarbonisation. The increase would result in savings of between EUR 44 billion and EUR 113 billion per year by 2030, when accounting for savings related to the cost of energy, and avoided environmental and health costs.

“For decades now, through ambitious long-term targets and strong policy measures, Europe has been at the forefront of global renewable energy deployment,” said IRENA Director-General Adnan Z. Amin. “With an ambitious and achievable new renewable energy strategy, the EU can deliver market certainty to investors and developers, strengthen economic activity, grow jobs, improve health and put the EU on a stronger decarbonisation pathway in line with its climate objectives.”

Welcoming the timeliness of the report, Mr. Miguel Arias Cañete, European Commissioner for Energy and Climate Action said: “The report confirms our own assessments that the costs of renewables have come down significantly in the last couple of years, and that we need to consider these new realities in our ambition levels for the upcoming negotiations to finalise Europe’s renewable energy policies.”

The report highlights that all EU Member States have additional cost-effective renewable energy potential, noting that renewable heating and cooling options account for more than one-third of the EU’s additional renewables potential. Furthermore, all renewable transport options will be needed to realise EU’s long-term decarbonisation objectives.

Additional key findings from the report, include:

  • Reaching a 34% renewable share by 2030 would require an estimated average investment in renewable energy of around EUR 62 billion per year.
  • The renewable energy potential identified would result in 327 GW of installed wind capacity an additional 97 GW compared to business as usual, and 270 GW of solar, an 86 GW increase on business as usual.
  • Accelerated adoption of heat pumps and electric vehicles would increase electricity to 27 per cent of total final energy consumption, up from 24 per cent in a business as usual scenario.
  • The share of renewable energy in the power sector would rise to 50 per cent by 2030, compared to 29 per cent in 2015.
  • In end-use sectors, renewable energy would account for 42 per cent of energy in buildings, 36 per cent in industry and 17 per cent in transport.
  • All renewable transport options are needed, including electric vehicles and – both advanced and conventional – biofuels to realise long-term EU decarbonisation objectives.

The report is a contribution to the ongoing discussions on the European Commission’s ‘Clean Energy for All Europeans’ package, tabled in November 2016, which proposed a framework to support renewable energy deployment.

Renewable Energy Prospects for the European Union is part of IRENA’s renewable energy roadmap, REmap, which determines the potential for countries, regions and the world to scale up renewables to ensure an affordable and sustainable energy future. The roadmap focuses on renewable technology options in power, as well as heating, cooling and transport. The REmap study for the EU is based on deep analysis of existing REmap studies for 10 EU Member States (accounting for 73 per cent of EU energy use), complemented and aggregated with high-level analyses for the other 18 EU Member States.

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Solar Power: Essential for sustainable development

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Day two at the World Sustainable Development Summit in Delhi and my focus switches to renewable energy. Particularly Solar Power. The widespread uptake of this technology is critical if we are to truly begin to decarbonise and meet all of our international targets.

Over lunch I meet with Upendra Tripathy, Director-General of the International Solar Alliance (ISA) and his Senior Advisor Shishir Seth. Not only is it an honour to meet with these gentlemen, it is always a pleasure to work alongside professionals who demonstrate such personal commitment to the huge challenge of climate change.

Brainchild of the Government of India, the International Solar Alliance is a relatively new organisation that was established following the 2015 Paris Agreement on Climate Change. The International Solar Alliance recognises that solar energy provides solar-rich countries, lying between the Tropics of Cancer and Capricorn, with an unprecedented opportunity to bring prosperity, energy security and sustainable development to people.

The ISA works with these countries to overcome obstacles that stand in the way of massive scale-up of solar energy.

Simple Objectives. Fantastic Ambitions.

I am excited about the prospects that exist for close collaboration between International Solar Alliance and The Commonwealth. We can work with the ISA to support the process of getting relevant Commonwealth member countries signed up to make solar power widely available and accessible to their communities.

I am reminded of some work in The Gambia in 2014. I was at a fish-landing site in the capital Banjul. The facilities for refrigerating the catch prior to market were so very limited. Fisheries is a mainstay of The Gambian national economy and effective refrigeration facilities are fundamental to supply chain success. Access to reliable refrigeration is critical for such economies to thrive. Solar power has such potential to provide countries with a step change in energy security.

It will be very interesting to see how the ISA will enhance energy security and down the line positive economic impact. Over the next decade I hope there will be a transformation.

Here at The Commonwealth we want to see the best deal for our member countries in the conversion to low carbon technologies.

Tomorrow I leave Delhi, and head to Mauritius for the Steering Group Meeting of our Climate Finance Access Hub. I will be taking the ideas generated with the International Solar Alliance directly to our discussions.

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West Karoun: fields with promise for Iran’s oil industry

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In the last few years, especially after the implementation of the nuclear deal (known as the Joint Comprehensive Plan of Actions or JCPOA), Iran’s oil industry has been strongly focused on developing joint oil and gas fields, aiming to increase the seven-percent share of such fields in the country’s oil production.

In this regard, West Karoun oilfields which Iran shares with Iraq at the western part of Iran’s southwestern region of Karoun, have been prioritized among the country’s top development projects.

After the implementation of JCPOA in January 2016, Iranian oil industry once again broke free from the shackles of pressure which held it back from its full potential since January 2012, in which the EU agreed to an oil embargo on the country.

Immediately after the removal of the sanctions, Iranian government put it on the short term agenda to hastily increase its oil production to reclaim its oil market share lost to the fellow OPEC members due to the restrictions imposed by the West.

In doing so, plans were made for continuous increase in the country’s oil output and also development of new fields.

Following the new policies for attracting foreign investors to develop the country’s fields, in 2016, Iran introduced the Iran Petroleum Contract (IPC), which replaced the old buyback model.

Shortly after, National Iranian Oil Company (NIOC) announced that the company is in serious talks with potential foreign suitors in order to hold tenders to hand out the development projects mostly for shared fields.

According to the oil ministry’s planning, West Karoun region which includes five major fields namely North Azadegan, South Azadegan, North Yaran, South Yaran and Yadavaran, was introduced as the main candidate for the new IPC tenders.

According to the managing director of Petroleum Engineering and Development Company (PEDEC), the oil ministry targeted an output of 700,000 barrels per day (bpd) for this region, by the end of the Iranian calendar year of 1397 (March 2019).

However, the initial enthusiasm did not lead to any entrust and since mid-2016 which IPC was introduced, still no tender has been held.

Although NIOC have repeatedly said in 2017 that international energy companies including France’s Total, Malaysia’s Petronas and Japan’s Inpex are eager for the development of the Azadegan field, the tender has been postponed several times for unspecified reasons.

West Karoun holds great importance for the country’s oil industry since according to the latest studies, its in-situ deposit is estimated to be 67 billion barrels containing both light and heavy crude oils, and therefore it could have a big impact on Iran’s oil output increases in the future.

With the fields fully operational, their output could add 1.2 million bpd to the country’s oil production capacity.

The complete development of the West Karun oilfields will require about $25 billion of investment, of which only about $7 billion has been funded and spent in implementation and development plans so far.

Considering the fact that West Karoun fields are still young, pristine and untapped reservoirs (also called green fields), the government should increase the efforts to attract the necessary investment for developing these fields.

Since most of the country’s already active fields are old and obviously with aging, the recovery factor decreases resulting in a lower production rate, increasing production level requires either new technologies to keep the recovery factor from falling or new fields coming on stream.

So, again considering the issues regarding banking relations, entering new technologies would be rather a challenge for the oil ministry, thus as it is already prioritized, young and untapped oilfields should be given extra attention in the ministry’s future planning to increase oil output.

Having an estimated 67 billion barrels of in-situ oil, West Karoun fields definitely deserve the spotlight which has been put on them recently.

Hopefully, in the new Iranian fiscal (which starts on March 21), the tender for development of the Azadegan oilfield, which is the first of its kind, won’t get postponed any further and the 10 IPC deals which were promised by the oil minister to be signed by March 2018 will go through by the yearend.

First published in our partner Tehran Times

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