Power in a Climate Changing World
It’s a conference for the history books. Despite the conspicuous absence of Al Gore, his Nobel Peace Prize-winning organisation will be represented.
How can a world already facing limited energy resources cope with the unprecedented development of China, India and other emerging countries? Is nuclear power the best way to meet the ever-increasing needs of the planet, or does renewable energy provide a viable alternative? And what about clean coal – is it myth or reality?
These are some of the questions waiting for answers at the 17th Conference of the Electric Power Supply Industry, an event organised by CEM (the Macau Electricity Company) to be held at the Venetian’s Convention Centre from October 27th to the 31st. In an interview with Macau CLOSER, CEM’s chief executive officer Franklin Willmyns stresses time and again the significance of this event and explains how selecting Climate Change as the main subject of the conference helped bring to Macau all the major players in the industry.
Franklin Willmyns
– It’s a huge responsibility for CEM to organise such a big event, such a prestigious conference in the sector. It’s a conference that normally attracts more than 1,000 delegates, and it has the participation of all the big power companies in the region, CEM being probably one of the smallest ones in this big league. We have been working on this for almost seven years, ever since we applied to host it. At that time, the thinking was very much in line with Macau’s ambition to become a world-class location for this kind of event. Based on that, we decided to make our contribution, and we thought it would be a good idea to promote this big conference in Macau, for once.
Today, thanks to a rapid development in recent years, we can say that Macau is indeed a world-class location in terms of the infrastructure it offers for holding conferences. There are very few other places that offer, at the same site, an area for exhibitions, a hotel, conference rooms and other facilities, all of them very close to the airport, the ferry terminal and so on. Nevertheless, it takes a lot of effort and resources to organise an event of this nature. Production costs for previous editions have been between US$ four and five million – a large amount of money for us – so we basically want it to finance itself. We’ve been very successful in obtaining the support of all member countries. Of course, the major support comes from Mainland China, in particular the Guangdong Power Grid, which is actually one of the largest power companies in the world.
Energy policies are currently at the centre of political debates everywhere. Looking at the event’s programme, it seems there are a number of very important issues to discuss here in Macau as well.
I would say we were also very successful in attracting good speakers, and the main reason for this success is the subjects we are going to discuss in this conference. The region is facing a couple of challenges. One is growth. It’s not only Macau that is growing fast; the same is happening in China, Thailand, Vietnam, India and all across the region. This growth has to be dealt with through a big expansion of the infrastructures, particularly in the power sector. A second challenge is pressure due to the price of energy, especially oil. Nobody could foresee the level of prices we are experiencing today. And it’s not only oil. The price of gas and other sources of energy is also increasing, while there’s strong political pressure for maintaining the tariffs. Therefore we find ourselves in a situation of being squeezed at our margins, and we have to deal with that. And a third challenge is even more universal – it’s the environmental component. In the past it was enough to provide a good service, with reliability and affordable prices. Today the environment plays a very important role in our decision-making, because there’s a strong demand from governments, regulators and public opinion. In order to have sustainable development, we have to take the environmental issues into account.
We are going to talk about how to produce electricity in a clean way. In this region, for example, coal is still a major source of primary energy. We want to discuss clean coal. You can produce clean electricity with coal. There are technologies available, and China is quite advanced in this area. We want to talk about nuclear power. The black sheep for many years, nowadays it’s winning a lot of support because it’s a very good option in terms of CO2 emissions. People say nuclear power may not be THE solution for energy in the future, but there is no solution without nuclear power. Most of the countries I have visited are planning to invest heavily in nuclear power.
In the United States, Republican candidate John McCain says he would build 100 new nuclear power plants if he’s elected President, and his Democrat rival, Barack Obama, now also seems to be admitting some sort of investment in nuclear power in the future.
Yes, it’s happening in the United States and in Europe, as well. Even countries where nuclear power was never considered are joining this debate now. And then there are the renewables. We’ll discuss renewable energy, too, of course. It’s a wider subject, as it includes
wind power, bio-fuels, hydropower, etc. Again, everyone in the power industry today acknowledges that a part of the energy in the future will have to come from renewables. We want to share in what everybody is doing: what are the trends, the technologies available and the difficulties we may find on the road ahead?
You’ve mentioned good speakers. Who can we expect to hear?
We feel quite honoured, for example, to welcome the CEO of the State Power Grid in China, which is actually the largest electricity company in the world. It’s the number 24 company on the Forbes list, so it’s a very powerful corporation. As I’ve mentioned, Guangdong Power Grid, which is 100 times the size of CEM, is also going to be represented here, and we’ll have industry-leaders from countries like Japan, Singapore or Taiwan, as well. On the other hand, here we have the advantage of knowing a bit about both East and West, which helps us attract people from outside the region. Speaking here will be a man who received the Nobel Peace Prize together with Al Gore, Mr. Mohan Munasingha from the Intergovernmental Panel on Climate Change, as well as the director of Climate Group, an organisation based in China that has more than 50 countries represented among its members. It’s hard to imagine a better group of speakers to get our conference started, with the exception of Al Gore himself, of course. Anyway, his organisation will be represented here.
Was he invited?
He was invited, but I guess he’s too busy right now (laughs). I’m afraid the conference runs too close to the US Presidential Election.
We’ll also have an exhibition with two different areas: one for big suppliers (like Siemens, RGB, Mitsubishi and others) where people can expect to come into contact with the latest technologies in the sector and another with stands reserved for power companies. There will be also some smaller areas related to the environment, the manufacturers and the regulators.
What kind of presentation will CEM be doing about the local market?
CEM will of course have a very strong presence in this exhibition. We want to show what we have been doing in Macau lately, and frankly there are several areas about which Macau can be very proud, in terms of electricity supply. We are very well placed in terms of reliability: if you compare us with our colleagues, we are in the top league, together with Japan, Singapore and Hong Kong, and far ahead of all the other players in the region.
...including, I suppose, Mainland China.
Well, everybody knows that due to growth in Mainland China there are electricity shortages – not too far from the Macau border, in fact.
One section of this conference will target what we call 100 percent reliability – in other words, a service with zero defects. Is it possible? Can it be done? Actually, if you think about the Beijing Olympics, it’s easy to imagine that if anything would have happened in terms of an interruption in energy service, it would have been a disaster. Nowadays, in places like Macau, even if we are 99.99 percent reliable, we feel it’s not good enough. We have to go after 100 percent. In a place like Macau, people do not expect even a second of power interruption, because there is a lot of entertainment going on, there are a lot of visitors and there is very high exposure. That’s why we have this section in the conference about 100% reliability. In theory, 100% is not achievable, but how far can we go? That’s what we want to know by sharing our experiences with Japan, Singapore and others.
You are introducing a new system in Macau to avoid even minimum failures, right?
We are introducing the ring concept. In such a configuration, even if someone cuts a cable, no one would ever know about it. So, it’s not as if you restore it in a couple of seconds. You will not even know anything happened. And this is the direction we believe we have to go. In the past, some of the power failures we’ve experienced – in the NAPE district for instance – were due to road work, which accidentally cut cables. In a ring configuration, there will be no problems in such cases.
But we’ve also improved a lot in other
areas in the last few years. We have invested in cleaning the exhaust gases from our power generation, and we also use a very special fuel nowadays, which has a very low content of sulphur and NOx (nitrogen oxides). It is not very cheap, but it allows us to be very clean in terms of emissions.
What else are you looking at to further reduce emissions?
In the future we might need to consider having at least one portion of our energy come from renewables. In the case of
Macau, renewables can only have a marginal contribution. Nevertheless, we have to do something. We have to work on three different areas. First of all, what we produce has to be cleaner, and in this area there’s still a lot of room to improve. Second, we have to look at using renewable sources of energy. Finally, we have to work on the demand side, on conservation, where there’s also a lot we can do.
In Macau we have some constraints of course. For instance, where would bio-fuels come from? And what about hydropower? No way. Wind power? Not easy unless you think about production offshore, which is a possibility. There are already some of these wind-farms abroad. Solar? That’s not easy in Macau for lack of surface. Anyway, we are very open to consider any options for renewables in the future.
As an expert in this industry, what do you think will be the better energy solution in the long term?
That’s not easy to predict. For the time being, we should look at having more than one alternative. The more options
we have, the better we will be able to manage energy production in economical and environmental ways. This is what we have been trying to do in Macau, as well. We cannot depend only on fuel. If the price goes up, or there’s a war somewhere and supply is disrupted, we still have to be able to supply Macau. Gas is an additional option, but the same principle applies. We don’t want to depend too much on any one of them. We want to have all of them at the same time, so we can always balance the most economic choice. Importation is surely a very important option also. Nowadays we are very much integrated with the Guangdong power network.
In Mainland China there’s another nuclear plant being built not too far away from Macau – some 70 km east of the territory. Will we buy energy from them in the future?
Well, at the end of the day, we don’t know where the electricity is coming from. As we get electricity indirectly from Hong Kong, it’s even possible that we’ve be using electricity from Daya Bay (the nuclear plant close to Hong Kong). The truth is, we don’t know where those electrons are coming from. But we are more advanced than Hong Kong in the sense that we are much more integrated with China. This is a trend everywhere. If you look at Europe, Portugal had quite an isolated network in the past. Today it’s integrated with Spain, and Spain is integrated with France and so on. To be able to depend on different sources for energy supply is very important in a place like Macau, where we may not be able to afford a reliability that’s anything less than 100 percent.
Is there any other segment of the conference that might be interesting to follow?
Well, after talking about nuclear power and renewables, and after a few technical visits, we try to come back to reality on the final day of the conference. Everything is very nice, but all this has a cost. So where will the money come from to invest and accomplish all that? For this segment we have invited the Asian Development Bank and many other people from the finance sector to discuss investment in this area. We will call to mind that climate change is also a business opportunity. For instance, regarding the Kyoto Protocol, Europe is now very ambitious in terms of reduction of CO2. If they cannot get low-carbon energy over there, they can buy certificates for it from elsewhere. There is a new market for CO2 reduction certificates. It’s a new thing, and we will bring people here to explain how it works, and how people can make money on it.
Let me also stress that we have received 600 technical papers and have selected 400 of them to be discussed in detail in some 24 technical sessions in small rooms. In all, I’m quite confident about the success of this conference.