Infrastructure Asia and Nordic clean technology solutions

This edition of the Baltics/Nordics-Asia Business Bulletin (BNABB) highlights the renewable energy sector in Asia and the opportunities within infrastructure via a forum arranged by Singapore’s Infrastructure Asia. The ‘Clean Technology for Infrastructure Virtual Showcase’ (held 15-16 Sep 2020) included three among the most prominent Nordic players within the field; namely Danfoss, Vestas and Wärtsilä. The platform’s end goal was the use of technology to enhance the resilience and adaptability of infrastructure developments.

Infrastructure Asia (IA) is a recently launched Singapore government entity dedicated to addressing Asia’s enormous infrastructure gap. This is being done through a combination of concrete infrastructure projects and world-class technical competencies.

IA aims to support Asia’s economic and social growth through infrastructure development. It serves as a bridge for different industry players across the infrastructure ecosystem, multilateral development banks (MDBs) and the public sector, and is a one-stop platform to facilitate regional infrastructure collaboration.

From the Nordic side Denmark responded promptly to this initiative; seeing that sustainable infrastructure opportunities as booming in Southeast Asia, and with great sustainable infrastructure growth opportunities for Danish experts.

The Danish Embassy in Singapore therefore set up its IA platform, linking Danish solution providers and Danish institutional investors to Singapore’s Infrastructure Asia Office. The Danish Embassy functions as the link between Infrastructure Asia, Danish institutional investors (e.g. pension funds, EKF, IFU, etc.), and Danish solution providers.

Asia has been estimated to face an investment gap of US$460 billion annually for infrastructure, and the bankability of projects remains a challenge. To drive and address some of these gaps, IA’s focus is therefore to connect partners in the ecosystem and catalyse collaboration; build capacity in markets with infrastructure needs through knowledge sharing or training sessions; and providing advice to help improve bankability of projects.

Furthermore, In 2020 IA and the Danish credit facility Danida Sustainable Infrastructure Finance signed an agreement aiming ‘to boost the financing of sustainable infrastructure’.

Danfoss

During the Clean Technology for Infrastructure’s live pitching sessions Danfoss focused on ‘Energy-Efficient Buildings – the Heart of a Green restart’

Danfoss states that by making energy-efficiency a priority for our buildings, we can not only reduce energy-use but also create new jobs and opportunities for growth towards a more sustainable future.

Danfoss epresentative Kien Khong Lim, Senior Technical Support Engineer, highlighted that buildings account for 40 per cent of all energy use globally and that existing buildings can be improved too.

“One cost-effective way is to reduce energy use by retrofitting and optimising of systems, such as heating, ventilation and air conditioning because the greenest energy solution is the energy we don’t need at all. Using technology available today we can connect buildings to smart energy systems adding to our energy efficiency by reusing excessive heat to heat our homes,” said Mr Lim.

Danfoss is a market leader in all its four segments, where Mr Lim commented: “We strongly believe that the main reason that you should want to talk to us is that we walk the talk. In February 2020 we have embarked on a very ambitions journey ourselves, where we aim to achieve carbon neutrality by the year 2030 for all our operations. In addition to that we also aim for our headquarters to fully run on renewable energy alone by 2022.”

“When we talk to you about having energy-efficient buildings and how to achieve energy efficiency for your own buildings we understand what we are talking about because we are with you. We are together, part of the team that is going to build a sustainable future, and sustainability is at the forefront of how we want to achieve a green future.”

As for Danfoss solutions he outlined that they have quite a few product lines that help in achieving energy efficiency in buildings.

The next generations of chillers and HVAC [heating, ventilation, and air conditioning] for new builds as well as retrofits are designed to meet new standards. The revolution in the A/C market opens up new opportunities. Danfoss can offer different options for meeting these requirements in air-cooled and water-cooled chillers, using scroll, centrifugal or screw technology.

“Danfoss is at the forefront of digitalisation, introducing such features into our drives, which are our most common and popular product line in Singapore as well as in the rest of the Asia region.”

“Only the optimal interaction of the system components fan, motor, electronics and diffuser, makes the full potential of a highly efficient fan realisable.”

Their EC+ Concept means that when building an HVAC system to get the highest performance and system efficiency, the individual components – motor, drive and fan – need to be flexible and broadly compatible with each other. For instance, if you specify a high-efficiency motor that is only compatible with lower efficiency fans, the overall system efficiency would suffer and would not reflect the high performance – and investment – in the individual components. But the EC+ concept enables this.

Danfoss also offers the Turbocor - the world’s first oil-free magnetic bearing compressor for the HVAC industry. These compressor models (using advanced technology to deliver high efficiency and low sound levels in a compact footprint) have the flexibility to be used in air cooled, water cooled or evaporative cooled chillers operating in wide range of applications such as comfort cooling, low temperature process, ice storage and heat recovery. 

Vestas

From Vestas, William Gaillard, VP Sales Asia Pacific, presented ‘Fuel Asia Pacific’s energy transition’, sharing insights into why wind energy is recognised globally as one of the most sustainable forms of electricity generation.

“Renewable energy is the future now, outperforming already what fossil fuels can achieve in terms of cost of energy. It is cheaper than coal, natural gas and nuclear in most places. Renewables are mainstream, representing 90 per cent of all the new capacity being added capacity in most parts of the world. Asia still lags a bit but hopefully every day we get some better news about banks even in Asia now refusing to continue financing coal-fired powered plants. So most thermal is the past and we are very much the present,” William Gaillard began.

“The cost of renwables has come down significantly. On the wind side the price for the cost of energy for onshore wind has declined by more than 60 per cent. Solar has declined even more; up to 86 %. And really, we are now very competitive in terms of cost of energy.”

While prices do vary from country to country it is usually about scale, about enabling the market place and the supply chain by having that scale effect. The Competitiveness within the country is about infrastructure.

Mr Gaillard said that there is a lot of debate about what you put in that cost of energy, while all artificial subsidies on some of the fuels on the conventional power side are excluded.

“On the renewable side we do not have such subsidies on the fuel. And in most of the places now we do not even need any further subsidies, because the price is already more competitive.”

Natural gas – combined cycle – is also not flexible, he said. “You can argue that some of the combined cycle or peaking the power units in the gas space can help renewable, but it’s not something for the future. Will you invest in something that within 10 or 15 years might not be needed?”

“What we are also seeing and what is going to be the game-changer now is the storage capabilities, be it battery energy storage systems or whatever kind of storage system, is going to bring that flexibility in the generation profile that is required by the grid.”

Mr Gaillard presented pioneering Vestas as the clear leader in wind energy solutions. “In 2019 we installed nearly ten gigawatt; equivalent to a lot of nuclear reactors, but unfortunately not yet enough. But I am certain that renewable wind energy in particular, is going to continue growing.”

Vestas has so far installed 72 000 wind turbines worldwide and we have in maintenance more than 47 000 turbines. Its revenue in 2019 was Euro 12 billion.

“We continue to pioneer and open more new markets every day, and the technology is getting better and better; we can tap into lower wind speeds than in the pasts, so that is also opening to new markets.”

“What’s important in our business is versatility in our product portfolio. We have the number of quality and quantity of products which is required to really tackle every market. We are also capable of adapting every single product to fit a specific site and really work on lowering the cost of energy together with our customers.”

In approaching the Asia-Pacific market for wind Vestas has been focusing on Asia for quite some time, seeing how it has been peaking recently. “There was a peak in Thailand a couple of years ago and before that it was the Philippines. Now it is Vietnam. Also Korea is announcing huge plans and so has Taiwan, mainly supporting off shore and to create some form of local wind energy industry,” informed Mr Gaillard.

“We are seeing that there is a demand for more power in Asia, everyone knows that now Asia is producing pretty much everything you buy online, so it’s very important that this need for power is fuelled by renewable energy and not by thermal polluting assets. That is why we are focusing on these markets as well; to help our customers, but also regulators to put in place the regulations that are required, and to help the industry in general to understand where we are and where we want to go.”

“Every country is now just realising that their plan of old thermal technology will not happen, thanks first of all to the competitiveness of renewables but thanks also to the pressure of every voter here on the planet through their governments for cleaner air and cleaner and safer environments as well. And now the lenders, the banks and investors, are very much conscious of that and very much focused on the SDG s and are simply refusing to finance or invest in the polluting projects. It’s very good to see that there is really a paradigm shift; it’s going to accelerate tremendously the growth of renewable energy in Asia.”

“We are very much focused also on solving challenges. In Asia the infrastructure is usually not like what you can find in more developed countries and it requires a lot of expertise to transport those large equipments to the site and then to install it. That is very much part of our focus. We also do turnkey contracts when required, and I think there is also a lot more appetite from foreigners to invest in Asia together with us as a turnkey partner.”

Over the last two years the growth has been increasing and Vestas sees 50 per cent more growth in the Asia-Pacific year-on-year, with more than 8.5 gigawatt in service, incl. 500 megawatt non-Vestas turbines.

“We are constantly pushing the boundaries as well. In some cases in Australia, for example, we now sign 30-year contracts. That’s how we are pushing and extending the lifetime of our products; normally the standard in the industry of the design lifetime is 20 years only.”

It also helps Vestas’ sustainability strategy that wind turbines become energy neutral in just a few months. “It takes today some carbon footprint and energy to produce a wind turbine but in just a few months this is paid back. It is actually a very short term compared to other technologies.”

Mr Gaillard also informed that Vestas has set the goal to become a carbon neutral company by 2030. And in order to reach that Vestas will not be using carbon offsets, meaning that everything they are going to do, including their production and the whole supply chain, would be carbon neutral.

They will now expand their focus beyond the carbon footprint of their products to include the carbon footprint of all their activities, across the entire value chain.

At Vestas they think that sustainability cannot merely remain a concept behind their products but must become an integral part of everything they do.

In the next newsletter this clean technology for infrastructure reporting continues with Wärtsilä and the summary from a plenary session on ‘Making clean energy more investable with technology’.

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