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Wärtsilä: Ensuring sustainable electricity supply in Myanmar

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This presentation was given by our Gasbassador Nicolas Leong at the 4th edition of the Myanmar Power Summit.

Wärtsilä Development & Financial Services (WDFS) is a
global project development and customer financing function
WDFS has a global team of 16 project developers and
financing professionals based in Finland, India, the
Netherlands, Singapore, Dubai, Brazil and the United States
The scope of WDFS project development includes engine
power plants, PV power plants, Engine – PV Hybrids and
LNG infrastructure.

WDFS has successfully developed and closed over 30 IPP
projects (approx. 3700 MW) around the world since 1991

Published in: Technology
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Wärtsilä: Ensuring sustainable electricity supply in Myanmar

  1. 1. © Wärtsilä PUBLIC Ensuring Sustainable Electricity Supply in Myanmar 4th Myanmar Power Summit, 17 November 2016 Nicolas Leong, Business Development Manager Wärtsilä - Energy Solutions 11/18/2016 4th MPS / Nicolas Leong1
  2. 2. WÄRTSILÄ CORPORATION 2 4th MPS / Nicolas Leong11/18/2016 EFFICIENCY FLEXIBILITY ENVIRONMENTAL SOLUTIONS LEADER IN SOLUTIONS FOR MARINE/ OFFSHORE POWER GENERATION Marine Solutions 34% Energy Solutions 22% Services 43% Listed in Helsinki 5,0 billion € turnover 2,6% or 136M€ in R&D Net sales by business 2015 18,800 PROFESSIONALS
  3. 3. © Wärtsilä PUBLIC INSTALLED BASE* – WÄRTSILÄ POWERING THE WORLD 11/18/2016 4th MPS / Nicolas Leong3 Total: 60 GW Countries: 176 Americas: Output: 12.1 GW Europe: Output: 15.6 GW Asia & Middle East: Output: 25.5 GW Africa: Output: 6.9 GW Municipalities, co-ops, Oil &Gas etc. IPPs Utilities Industry *) December 2015
  4. 4. © Wärtsilä PUBLIC 11/18/2016 4th MPS / Nicolas Leong4 MARKET SHARE, <500 MW MARKET General Electric 6596 39% Siemens 4285 25% Mitsubishi 3362 20% Wärtsilä 1687 10% Ansaldo 930 5% Others 157 1% September 2015 General Electric 6122 35% Siemens 4409 25% Wärtsilä 2555 15% Mitsubishi 2087 12% Ansaldo 1253 7% Others 969 6% September 2016 17.0 GW 17.4 GW Source: McCoy Power Report Includes GT-based gas and liquid-fuelled, <500 MW power plants with prime movers above 5 MW Includes estimated output of steam turbines for combined cycles (factor 0.5 for industrial turbines, 0.25 for aeros) Oil & Gas projects not included. Other combustion engines not included.
  5. 5. © Wärtsilä PUBLIC Wärtsilä Development & Financial Services offering 11/18/2016 4th MPS / Nicolas Leong5 WÄRTSILÄ DEVELOPMENT AND FINANCIAL SERVICES Wärtsilä Development & Financial Services (WDFS) is a global project development and customer financing function WDFS has a global team of 16 project developers and financing professionals based in Finland, India, the Netherlands, Singapore, Dubai, Brazil and the United States The scope of WDFS project development includes engine power plants, PV power plants, Engine – PV Hybrids and LNG infrastructure WDFS has successfully developed and closed over 30 IPP projects (approx. 3700 MW) around the world since 1991 WDFS scope of services includes: • Project Development • Vendor arranged funding and application of export credit guarantees • Financial advisory services including financial modelling
  6. 6. © Wärtsilä PUBLIC • WDFS role varies between lead development and support / co-development • WDFS can take equity positions in projects and share development risk through funding of project development cost • Financial modelling - project economics and feasibility • Support in arranging, structuring and negotiating financing on a limited recourse basis • Advise and support in structuring, review and negotiation of project agreements • Advise and support in permitting process (environmental studies and approvals) • Support in managing third party consultants and environmental advisors • Support in corporate structuring (SPC formation and investment vehicles) 11/18/2016 4th MPS / Nicolas Leong6 How we do it - Scope of work in project development DEVELOPMENT SERVICES
  7. 7. © Wärtsilä PUBLIC Legal Disclaimer This document is provided for informational purposes only and may not be incorporated into any agreement. The information and conclusions in this document are based upon calculations (including software built-in assumptions), observations, assumptions, publicly available information, and other information obtained by Wärtsilä or provided to Wärtsilä by its customers, prospective customers or other third parties (the ”information”) and is not intended to substitute independent evaluation. No representation or warranty of any kind is made in respect of any such information. Wärtsilä expressly disclaims any responsibility for, and does not guarantee, the correctness or the completeness of the information. The calculations and assumptions included in the information do not necessarily take into account all the factors that could be relevant. Nothing in this document shall be construed as a guarantee or warranty of the performance of any Wärtsilä equipment or installation or the savings or other benefits that could be achieved by using Wärtsilä technology, equipment or installations instead of any or other technology. 11/18/2016 4th MPS / Nicolas Leong7
  8. 8. © Wärtsilä PUBLIC Agenda • Overview of the 3 Master Plans • Evaluating Available Fuel Options to Meet Current & Future Power Demand • Possible solutions for Myanmar Power Generation Plans 11/18/2016 4th MPS / Nicolas Leong8 INTRODUCTION
  9. 9. © Wärtsilä PUBLIC Myanmar – 3 Master Plans 8 January 2016 - Minister of Electricity and Energy (MOEE) officially released three (3) Master plans: 1. Myanmar Energy Master Plan (ADB) • Prepared in December 2015 2. National Electricity Master Plan (JICA) • Prepared in December 2014 3. National Electrification Plan (WB) • Prepared in August 2014 11/18/2016 4th MPS / Nicolas Leong9 MYANMAR
  10. 10. © Wärtsilä PUBLIC JICA Key Recommendations • Repurchase gas from Thailand and China • Consider liquid fuel firing in existing power plant • Dual firing for future projects • High efficiency technology 11/18/2016 4th MPS / Nicolas Leong10 JICA
  11. 11. © Wärtsilä PUBLIC Liquid Fuel Firing and Dual Firing with high efficiency • Consider liquid fuel firing in existing power plant • Dual firing for future projects • High efficiency technology 11/18/2016 4th MPS / Nicolas Leong11 LIQUID FUEL AND DUAL FIRING
  12. 12. © Wärtsilä PUBLIC Wärtsilä dual fuel power plants with Heavy Fuel Oil (HFO) capability • On 14 November 2016 Singapore Index: HFO price is 272 USD/MT compared to 456 USD/MT for LFO/Diesel • HFO is clearly the cheapest liquid fuel to achieve the most competitive electricity tariffs • Wärtsilä Dual-Fuel technology enables you to burn HFO now and switch to Gas/LNG later when available Minimal CAPEX increase compared to pure Gas or Liquid Fuel engines Fuel flexibility Seamless switch over from HFO to gas mode and vice-versa High open-cycle efficiency (~48%) No additional investment needed Meets World Bank/IFC emissions guidelines HFO as back-up fuel 11/18/2016 4th MPS / Nicolas Leong12 DUAL-FUEL TECHNOLOGY HFO Gas
  13. 13. © Wärtsilä PUBLIC The tariff of a power plant project is highly dependant on fuel price – The HFO and Diesel differential makes Diesel much more expensive 11/18/2016 4th MPS / Nicolas Leong13 FUEL TARIFF - 2 4 6 8 10 12 14 16 18 20 0 100 200 300 400 500 600 700 800 Example Power Project: ~100 MW Baseload IPP over 20 years lifetime ~HFO delivered price ~LFO delivered price HFO spot price LFO spot price Fuel price USD/ton Tariff $c/kWh 4 $c/kWh The difference in HFO and Diesel (LFO) price corresponds to USD 4cents/kWh in lifecycle electricity cost. In this example, that is 28 MUSD/year
  14. 14. © Wärtsilä PUBLIC 11/18/2016 4th MPS / Nicolas Leong14 EPGE of MOEE is already adopting dual-fuel and HFO in 300MW Tender 300MW YANGON TENDER
  15. 15. © Wärtsilä PUBLIC EPGE of MOEE is already adopting dual-fuel and HFO in 300MW Tender 11/18/2016 4th MPS / Nicolas Leong15 300MW YANGON TENDER
  16. 16. © Wärtsilä PUBLIC Dual-Fuel Engine Range 11/18/2016 4th MPS / Nicolas Leong16 DUAL-FUEL TECHNOLOGY 0 5 10 15 20V34DF 9730 kW 9L34DF 4340 kW34DF 16V34DF 7740 kW 18V50DF 16640 kW50DF Power at generator terminals 50 Hz
  17. 17. © Wärtsilä PUBLIC Reference: IPP3 in Jordan, 38xW18V50DF, 573 MW 11/18/2016 4th MPS / Nicolas Leong17 IPP3 573MW DUAL-FUEL Global power plant references: 36 x 50DF plants with 242 engines producing 4051 MW 21 x W34DF plants with 88 engines producing 720 MW Running hours: 770 W50DF engines delivered, 5,7 million running hours 310 W32DF & W34DF engines delivered, 2,9 million running hours
  18. 18. © Wärtsilä PUBLIC 11/18/2016 4th MPS / Nicolas Leong18 Reference: 200MW Dual-Fuel Power Plant in Bali, Indonesia BALI 200MW DUAL-FUEL PLTD PESANGGARAN BALI Customer: Utility Type: Wärtsilä 50DF baseload power plant Operating mode: Baseload Gensets: 12 x Wärtsilä 18V50DF Total output: 200 MW Fuel: HFO & Natural gas Scope: EPC (Engineering, Procurement & Construction) Delivered: 2015
  19. 19. © Wärtsilä PUBLIC ADB Key Recommendations • Gas supply needed: • Prioritize gas supply between sectors • Explore renegotiation of gas export contracts • Build LNG terminal at later stage 11/18/2016 4th MPS / Nicolas Leong19 ADB
  20. 20. © Wärtsilä PUBLIC Invitation For Letter Of Expression Of Interest To Conduct Liquefied Natural Gas (LNG) Business In Myanmar 11/18/2016 4th MPS / Nicolas Leong20 LNG EOI
  21. 21. LNG TERMINAL SOLUTIONS 2111/18/20164th MPS / Nicolas Leong LARGE SCALE SMALL SCALE ON-SHORE OFF-SHORE FSRU LNG Barge Flat Bottom Concrete tanks Pressurised steel tanks MID SCALE LNG Barge (or mini FSRU) Concrete tanks or Pressurised Steel tanks
  22. 22. © Wärtsilä PUBLIC 11/18/2016 4th MPS / Nicolas Leong22 Tornio Manga LNG Terminal, Finland 50,000 m3 – full containment tank EPC, WÄRTSILÄ LNG IMPORT TERMINAL - FLAT BOTTOM CONCRETE TANK
  23. 23. © Wärtsilä PUBLIC 11/18/2016 4th MPS / Nicolas Leong23 LNG STORAGE & REGAS BARGE Storage volume: 5,000- 30,000 m3 Width / Length: < 32m / 80- 150 m Max draught: 4- 7 m Weight: 3,000 – 15,000 tons
  24. 24. © Wärtsilä PUBLIC Wärtsilä Mobile LNG: LNG Barge 7500m3 + 50 MW Power Barge 11/18/2016 4th MPS / Nicolas Leong24 WÄRTSILÄ MOBILE LNG
  25. 25. © Wärtsilä PUBLIC 50MW Power Plant with Integrated 7,500m3 LNG Storage 11/18/2016 4th MPS / Nicolas Leong25 LNG + POWER CONCEPT LNG Scope of Supply (EPC): • LNG Tanks + process • Site works • Short cold pipe + unloading arm at jetty • Unloading jetty for LNG carrier Technology: • Pressurized bullet tanks • Ambient air evaporators • Send out pressure: 6-8 bar • Minimal regas power consumption Power Plant: • Dual Fuel Fired Internal Combustion Engine • LNG Storage
  26. 26. © Wärtsilä PUBLIC 0 10000 20000 30000 40000 50000 60000 0 5 10 15 20 25 30 Days of storage 200 MW plant (baseload 8000 h/year) 620,000 m3/year (=280,000 tonnes/year) 50 MW plant (baseload 8000 h/year); OR 100 MW (flexible baseload = 4000 h/year); OR 200 MW (peak load = 2000 h/year) 155,000 m3/year (=70,000 tonnes/year) m3 LNG 100 MW plant (baseload 8000 h/year) 310,000 m3/year (=140,000 tonnes/year) Minimum refilling interval 11/18/2016 4th MPS / Nicolas Leong26 LNG CONSUMPTION IN A POWER PLANT
  27. 27. BEFORE: CONVENTIONAL LNG VALUE CHAIN 27 4th MPS / Nicolas Leong
  28. 28. AFTER: CONVENTIONAL + SMALL-SCALE VALUE CHAIN 28
  29. 29. © Wärtsilä PUBLIC LNG VALUE CHAIN End User Natural Gas PipelineRegasification Large Scale Terminal/ Hub Large Scale Shipping Liquefaction Gas production End User (Natural Gas) Regasification Medium scale shipping End User (LNG/Natural Gas) Small Scale Storage Small scale shipping Ship Bunkering End User (LNG/Natural Gas) Small Scale Storage Truck Transport /ISO containers LARGE SCALE LNG MEDIUM SCALE LNG SMALL SCALE LNG Mid scale storage 11/18/2016 4th MPS / Nicolas Leong29
  30. 30. © Wärtsilä PUBLIC LNG VALUE CHAIN End User Natural Gas PipelineRegasification Large Scale Terminal/ Hub Large Scale Shipping Liquefaction Gas production End User (Natural Gas) Regasification Medium scale shipping End User (LNG/Natural Gas) Small Scale Storage Small scale shipping Ship Bunkering End User (LNG/Natural Gas) Small Scale Storage Truck Transport /ISO containers LARGE SCALE LNG MEDIUM SCALE LNG SMALL SCALE LNG Mid scale storage 2 USD/MMBTU +2,6 USD/MMBTU +1,1 USD/MMBTU +0,8 USD/MMBTU +0,1 USD/MMBTU +0,2 USD/MMBTU 6,8 USD/MMBTU +1,5 USD/MMBTU +1,0 USD/MMBTU +0,2 USD/MMBTU 9,2 USD/MMBTU +1,0 USD/MMBTU +1,6 USD/MMBTU 11,5 USD/MMBTU =9,0 USD/MMBTU =6,5 USD/MMBTU The LNG Value chain ”Add-on Cost” 11/18/2016 4th MPS / Nicolas Leong30
  31. 31. © Wärtsilä LNG Value Chain – One Stop Shop by Wärtsilä • Wärtsilä can develop and operate small-scale LNG import terminal and dual-fuel power plant to deliver clean and quick to market power. • Wärtsilä can work with a LNG supplier to provide comprehensive delivered LNG to power plant site in Myanmar by break-bulking large volumes in Singapore to achieve economies of scale WÄRTSILÄ ONE STOP SHOP LNG Supply from Singapore LNG Terminal Small Scale LNG Vessel Small Scale Gas Power Plant Small-Scale LNG Storage & Regasification 4th MPS / Nicolas Leong
  32. 32. © Wärtsilä PUBLIC 3 Key Takeaways 1. Dual-Fuel - Burn HFO now and switch to Gas/LNG later when available. 2. LNG Value Chain – One Stop Shop 3. Wärtsilä - Your LNG-to-Power partner 11/18/2016 4th MPS / Nicolas Leong32 CONCLUSION
  33. 33. © Wärtsilä33 Smart Power Generation ENERGY EFFICIENCY FUEL FLEXIBILITY OPERATIONAL FLEXIBILITY 4th MPS / Nicolas Leong LNG ENERGY SECURITY LOW EMISSIONS REDUCED OPEX WÄRTSILÄ – Your One Stop Shop for LNG-to-Power THANK YOU!
  34. 34. • Nicolas Leong • +65 8339 5334 • Nicolas.Leong@wartsila.com

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