Wärtsilä: Ensuring sustainable electricity supply in Myanmar

© Wärtsilä PUBLIC

Ensuring Sustainable Electricity Supply in Myanmar4th Myanmar Power Summit, 17 November 2016

Nicolas Leong, Business Development Manager

Wärtsilä - Energy Solutions

11/18/2016 4th MPS / Nicolas Leong1

WÄRTSILÄ CORPORATION

2 4th MPS / Nicolas Leong11/18/2016

EFFICIENCY FLEXIBILITYENVIRONMENTAL

SOLUTIONS

LEADER IN

SOLUTIONS FOR

MARINE/

OFFSHOREPOWER 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


INSTALLED BASE* – WÄRTSILÄ POWERING THE WORLD


Total: 60 GWCountries: 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

© Wärtsilä PUBLIC 11/18/2016 4th MPS / Nicolas Leong4

MARKET SHARE, <500 MW MARKET

General Electric

659639%

Siemens428525%

Mitsubishi 336220%

Wärtsilä168710%

Ansaldo9305%

Others1571%

September 2015

General Electric

612235%

Siemens440925%

Wärtsilä255515%

Mitsubishi 208712%

Ansaldo12537%

Others9696%

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.


Wärtsilä Development & Financial Services offering


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


• 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)


How we do it - Scope of work in project development

DEVELOPMENT SERVICES


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.



Agenda

• Overview of the 3 Master Plans

• Evaluating Available Fuel Options to Meet Current & Future Power Demand

• Possible solutions for Myanmar Power Generation Plans


INTRODUCTION


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


MYANMAR


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


JICA


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


LIQUID FUEL AND DUAL FIRING


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


DUAL-FUEL TECHNOLOGY

HFO Gas


The tariff of a power plant project is highly dependant on fuel price –The HFO and Diesel differential makes Diesel much more expensive


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


EPGE of MOEE is already adopting dual-fuel and HFO in 300MW Tender

300MW YANGON TENDER


EPGE of MOEE is already adopting dual-fuel and HFO in 300MW Tender


300MW YANGON TENDER


Dual-Fuel Engine Range


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


Reference: IPP3 in Jordan, 38xW18V50DF, 573 MW


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


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


ADB Key Recommendations

• Gas supply needed:

• Prioritize gas supply between sectors

• Explore renegotiation of gas export contracts

• Build LNG terminal at later stage


ADB


Invitation For Letter Of Expression Of Interest To Conduct Liquefied Natural Gas (LNG) Business In Myanmar


LNG EOI

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

SCALELNG Barge

(or mini FSRU)

Concrete tanks

or

Pressurised

Steel tanks


Tornio Manga LNG Terminal, Finland50,000 m3 – full containment tankEPC, WÄRTSILÄ

LNG IMPORT TERMINAL - FLAT BOTTOM CONCRETE TANK


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


Wärtsilä Mobile LNG: LNG Barge 7500m3 + 50 MW Power Barge


WÄRTSILÄ MOBILE LNG


50MW Power Plant with Integrated 7,500m3 LNG Storage


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


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)


m3 LNG

100 MW plant (baseload 8000 h/year)


Minimum

refilling interval


LNG CONSUMPTION IN A POWER PLANT

BEFORE: CONVENTIONAL LNG VALUE CHAIN

27 4th MPS / Nicolas Leong

AFTER: CONVENTIONAL + SMALL-SCALE VALUE CHAIN

28


LNG VALUE CHAIN

End User

Natural GasPipelineRegasification

Large Scale

Terminal/ Hub

Large Scale

ShippingLiquefaction

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



LNG VALUE CHAIN

End User

Natural GasPipelineRegasification

Large Scale

Terminal/ Hub

Large Scale

ShippingLiquefaction

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

+0,2USD/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”


© 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 TerminalSmall Scale LNG Vessel Small Scale Gas Power

Plant

Small-Scale LNG Storage

& Regasification

4th MPS / Nicolas Leong


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


CONCLUSION

© 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-PowerTHANK YOU!

• Nicolas Leong

• +65 8339 5334

• [email protected]

Wärtsilä: Ensuring sustainable electricity supply in Myanmar

Technology

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