The Blue Circle celebrates SFE's 20th birthday

Twenty years ago, the pioneers of wind power

On November 13th 2001, in Paris- France, was incorporated the Societe Francaise d’Éoliennes (SFE- French Windmill Company) by Olivier Duguet. Following the first wind power Feed-in-Tariff established in June 2001, France was just about to embark on the growth story of wind energy. From less than 150 MW installed at that time, wind installed capacity reached 757 MW in 2005 and 2,454 MW in 2007. Societe Francaise d’Eoliennes followed the same trajectory, building its first 9 MW project at Saint Crépin (Charente Maritime - Midwest of France) in 2004, being the first Independent Power Producer to reach 100MW installed in 2007. “The turbines were much smaller at that time” details Olivier Duguet. “At SFE, we have installed 850kW turbines as well as the first 1.5MW turbines in France with 77 meters rotor diameter. When we built the first 2MW-90 meters rotor diameter turbines in the East of France in 2007, they seemed to us the maximum size and capacity technology could reach… The standard wind measuring campaigns were using 40 meters masts by that time and the banks were reluctant to lend for more than 10 years…”remember Olivier Duguet.

Nevertheless this has not stopped Olivier to become one of the French wind energy pioneers, along with Jean-Michel Germa (La Compagnie du Vent) and Jean-Yves Grandidier (Valorem). “In 1999, while visiting the Wind Turbine Technology Test Center of Bremerhaven in Germany, I realized the potential of wind to be a real industrial sector in the XXIst century…” acknowledges Olivier. Since then, the wind power sector has created 22.600 direct jobs in France and 1.2 million worldwide, global installed wind generation capacity has been multiplied by 100 in the last 20 years to reach 751GW in 2020 according to IRENA latest’s data. Even if harnessing the energy of the wind seems a first obvious choice to fight CO2 emissions and global warming in this COP 26 year, it has never been an easy task. Ever changing regulation and permitting conditions are most often cited as major obstacles for wind power projects development which take at least 3-4 years before reaching construction stage.

“For all of us who have been dreaming of changing the world for so many years, it is a great satisfaction to see now wind power becoming mainstream, competing without subsidies against fossil fuels and being one of the pillars of a Net Zero Carbon world” adds Olivier. His new venture, The Blue Circle, headquartered in Singapore, has continued pioneering wind power in Southeast Asia since 2013.

About The Blue Circle

Founded in 2013, The Blue Circle identifies, develops, finances, owns and operates renewable energy projects in the Asia-Pacific region. The Blue Circle uses the most advanced technology to build responsible and sustainable projects. With offices in Singapore, Ho Chi Minh City, Bangkok and Phnom Penh, The Blue Circle is the leading renewable energy development company of Southeast Asia. Its team is committed to changing the world one green electron at a time.

For further information, please contact:

The Blue Circle

Amaury Brucker   Tel:  +855 842 973         amaury.brucker@thebluecircle.sg  

The Blue Circle welcomes new Country Director for Cambodia

The Blue Circle is pleased to announce the appointment of Dr Somatra Kim as its new Country Director for Cambodia effective from 1st November 2021.

“We are very pleased to announce Somatra Kim’s promotion to The Blue Circle’s new Country Director for Cambodia. He will bring invaluable experience as well as extensive development expertise at a pivotal moment for the acceleration of Renewable Energy implementation across Southeast Asia” said Olivier Duguet, Chairman and CEO of The Blue Circle.

“The Blue Circle has a strong team of professionals with knowledge of wind power and experience in developing wind power projects across the region. The Blue Circle Cambodia is committed to being a part of the effort by the Royal Government of Cambodia to meet its carbon emissions reduction target and prepare the country for more sustainable and greener growth. As the new head of the Cambodian team, I am looking forward to working closely with all relevant institutions, namely EDC, EAC, MME, MEF and MOE to bring wind turbines to the Cambodian soil and to harness our country’s wind resource to power industries, modernity, and overall economic development with no impact on the environment.” added Somatra Kim.

Somatra worked as a university lecturer and researcher in Phnom Penh, Cambodia until 2015 when he joined the Chip Mong Group as Business Development Manager. He also worked as a policy manager for 3i Cambodia to develop a financial market for infrastructure project financing. He joined The Blue Circle as the Development Manager for Cambodia in May 2021.

Somatra holds an MA in Communications and an MA in economics in 2005 from Ohio University, USA. He holds a PhD in Human Geography looking at resource governance policy in 2013 from The University of Sydney, Australia.

About The Blue Circle

Founded in 2013, The Blue Circle identifies, develops, finances, owns and operates renewable energy projects in complex and challenging geographies in the Asia-Pacific region. The Blue Circle uses the most advanced technology to build responsible and sustainable projects. With offices in Singapore, Ho Chi Minh City, Bangkok and Phnom Penh, The Blue Circle is the leading renewable energy company of Southeast Asia. Its team is committed to changing the world one green electron at a time.

For further information, please contact:

The Blue Circle

Amaury Brucker   Tel:  +855 842 973         amaury.brucker@thebluecircle.sg  

Coal is pricing itself for extinction

Coal is pricing itself for extinction, even before any carbon tax

On September 2nd 2021, the benchmark spot price for thermal coal reached US$182 per ton. The previous all-time high was in July 2008 at US$184.50 but in the meantime the black hydrocarbon went as low as US$ 43.60 in January 2016 and again reached US$47.20 in August 2020. Over the last twelve months, the price of thermal coal has nearly quadrupled on international markets.

This unprecedented volatility has been caused by what seems now a perfect storm for the coal market: Australia, the second largest coal producer in the world, has been impacted by Covid and by Chinese ban on its production amid rising political tensions and a trade war; Indonesia, number one coal exporter, has been hit by an unusually wet summer monsoon due to la Niña in the Pacific and has restricted exports to keep its local market stocked, Russia, the third largest exporter in the world, has seen its shipments affected by floods, and finally India, the second largest importer of coal, is expected by ADB to have its GDP rebounding 11% by March 2022, and is heavily buying coal ahead of the dry season.

Since the peak of coal's share in the global energy mix in 2008, when coal accounted for 30% of global energy production, many countries have pledged to phase-out coal from their energy mix despite estimates that projected coal reserves to have the capacity to last for centuries at current consumption levels. The latest on the list were the Philippines and Indonesia, to declare a moratorium on new coal plants in 2021. As Sheikh Yamani, former Saudi Arabia Minister of Petroleum and Mineral Resources from 1995 to 2016, used to say: “The stone age didn’t end for want of stones”, the coal age will not end by a shortage of coal. 

What is often identified as the dirtiest fossil fuel has been responsible for over 30% of the global average temperature increase above pre-industrial levels according to the International Energy Agency (IEA). The continued closure of coal power plants in North America, Australia and Europe in the last 10 years has averted any new investments in coal mines around the world. In 2016, two of the largest US coal miners, Arch Coal and Peabody Energy has declared bankruptcy. Given the level of fatal accidents in its domestic coal mines, China has discouraged smaller mining operations and decreased its national extraction, putting even more pressure on international markets to supply its power sector.

Even if temporary, the actual coal price volatility could be a boon to demonstrate to utilities that not only the largest anthropogenic source of carbon dioxide is damaging the planet but also that it cannot be relied upon for 40 years investment decisions. A typical coal Power Purchase Agreement has its electricity purchase price indexed on the price of coal (except in very rare cases), the current surge of the (mostly imported) fossil fuel cost will have an inflationary impact on the utilities Profit & Loss account as well as on the Balance of Trade of the importing country.

For the power plant operator, as the fuel cost typically represents 60% of its operating costs, the 2021 spike is actually increasing its generation cost by a factor of 2.25x, pushing coal power kWh price much higher than intermittent renewable sources (solar and wind) + storage. For the utility, the typical Power Purchase Agreement being take-or-pay, it will force them to buy inflated coal electricity whatever is the international price of the commodity and will squeeze their profitability while their own selling contracts are mostly at a fixed price.

Even if this highly unpredictable and potentially leading to bankruptcy cost of coal energy don’t deter utilities from using it, maybe the coming carbon tax implemented by the EU will.

On July 14th 2021, the European Commission adopted a proposal for a new Carbon Border Adjustment Mechanism which will put a carbon price on imports of a targeted selection of products. This will ensure that European CO2 emission reductions efforts and targets contribute to a global emissions decline, instead of pushing carbon-intensive production outside of Europe. “It also aims to encourage industry outside of the EU and our international partners to take steps in the same direction” stated the European Commission in July 2021. This is the first time that the largest economic bloc on the planet decide to tax externalities. The potential impact of this EU Green Deal will be felt in the future by export oriented Southeast Asia economies and support their expected renewable energy push.

That would mean for countries like Cambodia, where 44% of its power came from coal in 2019 and 32% of its exports are going to the European Union, that the carbon contend of goods produced in Cambodia will have to be compensated for the portion higher than the ones produced in the EU. So not only Electricité du Cambodge (EDC), the local utility, could have to buy expensive and volatile coal power in the future but some of its clients exporting to the EU could be taxed on the carbon contend of its electricity.

Several of these clients, H&M, Adidas, Puma and Gap among others, have already sent a letter to the Cambodian government in August 2020 to raise the issue. As H&M stated “countries who see coal as a viable energy source for the future will lose out”. Neighboring Thailand, on the contrary, is putting net zero target in its Emission Strategy Plan and targets to reduce energy sector CO2 emissions by 60% before 2050 by pushing renewables share above 50% of its mix and replacing coal by LNG.

Only wind, hydro and solar energies offer an unbeatable power price stability over 25-30 years with fixed price PPAs (only the local currency portion could be indexed on local inflation in some instances), without any air or water pollution and without global warming impact. Wind and solar are already the lowest cost energy providers in China and Western countries. Time has come to leave coal as the energy of the XIXth century and to build the energy mix of the XXIst century.

Olivier Duguet

Chairman & CEO

The Blue Circle Pte Ltd

Time for wind power in Cambodia

The time for wind power implementation in Cambodia has come.

According to the International Energy Agency (IEA), Southeast Asia’s energy demand has increased by more than 80% since 2000 and is expected to increase by another 60% by 2040. Electricity demand in the region was rising by 6% per year before the Covid-19 pandemic outbreak with some countries like Cambodia growing even faster. If the speed of the economic recovery in 2022 and beyond is still debatable, the rebound coming from a worldwide vaccination campaign and the return of household’s consumption leaves no doubt.

As the European Union is implementing the “Green Deal” and the United States are “Building back better” by accelerating investment in renewable energy to fight climate change and promote recovery jobs, some countries in Southeast Asia are planning to use the same roadmap. The United Nations Climate Change Conference (COP26) in Glasgow, Scotland in November of this year will see all Paris Agreement’s signatory governments (including those of ASEAN) re-emphasize their firm and binding commitment to lower their CO2 emissions according to the UN’s Race to Zero campaign.

The Blue Circle’s wind farm in Mui Ne, Vietnam

According to energy consultant leading firm Rystad Energy, ASEAN countries are forecasted to build 6 GW of renewable power projects in 2021 and will increase their annual investment by up to 11 GW by 2025. The onshore wind projects build-up is expected to represent one third of all new renewable energy plants to come online in the region. In Vietnam alone, in a letter sent on March 22 to the Ministry of Industry and Trade (MOIT), Electricity of Vietnam (EVN) was reporting that 4,432 MW of new wind projects are being built this year (mainly in South Vietnam).

The last Power Development Plan presented to the Prime Minister in March was proposing a minimum of 11,320 MW of wind power to be installed by 2025 and 16,010 MW by 2030. Thailand, by implementing the rule to have Electric Vehicles representing 50% of all cars sold in Thailand by 2030, is crafting its New National Energy Plan with 6 to 10 GW of new wind power capacity installed by 2037. As of today, Vietnam and Thailand, Cambodia’s neighboring countries, have installed respectively 582 MW and 1,538 MW of wind power capacity already and are planning to install a minimum of 6,000 MW of new projects by 2025.

Comparatively, Cambodia has included in its 2030 Electrical Master Plan only 80 MW of wind energy by 2024. Even if the 2030 target of 17,677 MW total installed electrical generation capacity set in 2019 for the country were to be revised down by 30% following the pandemic, the wind power share would only represent a mere 0.64% of Cambodia’s total capacity installed in 2030. In the same timeframe, the Electrical Master Plan includes 1,740 MW of solar power to be installed by 2030, potentially representing 12.1% of Cambodia total capacity installed and plans to reach 540 MW before 2023.

As the Director-General of Electricité du Cambodge (EDC) and Minister, H.E. Keo Rattanak, stated on Jan 28th, 2019: “Renewable energies are not in competition with each other, each technology has its own merits and should be judged by its own characteristics”. All ASEAN countries with good wind and solar resources outside of Cambodia, namely the Philippines, Thailand and Vietnam, are expecting to tap into both solar PV and wind power opportunities to produce cheap renewable energy going forward. Energy consultant Rystad Energy is forecasting between 3 to 4 GW of equal yearly installation for solar PV and onshore wind in Southeast Asia in the next 5 years.

This convergence is not only banking on complementary load profiles between solar, peaking at midday, and wind, producing mostly during the later part of the day, but also on the convergence of costs. The last solar Feed-in-tariff in Vietnam (2020) was at 7 USc./kWh, the last direct solicited PPA signed by EDC (2019) was at 7.6 USc./ kWh, the wind Feed-in-tariff in Vietnam is at 8.5 USc./kWh until November 1stof this year before being revised down, the first wind PPA in Cambodia is already presented below 7 USc./kWh...

According to EVN, more than 1,300 MW of wind power projects will be connected to the grid by the end of the year in the Gia Lai and Dak Nong provinces located directly along the Cambodian border. Independent consultant 3i, in a study financed by the Australian government and released on July 15th, 2020, confirmed that Cambodia, in a Medium Wind Scenario, could install 1,185 MW by 2030 in 7 already identified windy zones. This capacity could represent 10% of the total Cambodian electricity generation in 2030, reaching an optimized cost of 6.86 USc./kWh and avoiding 10 Million tons of Co2 emissions. Regarding grid compatibility with different intermittent renewable generation levels, the study concluded that 10% of wind power in Cambodia’s energy mix would be manageable by EDC without heavy additional investments.

So, will Cambodia build back from the pandemic by adding wind power to its solar ambition? Will EDC go beyond a first 80 MW wind pilot project still to be implemented and follow its Mekong neighbors to tap into its wind national resource with a comprehensive plan? Now is the time.

Olivier Duguet
Chairman & CEO
The Blue Circle

Our Retrospective on Sustainability in 2020

Building a sustainable future

As the leading renewable energy company in Southeast Asia, The Blue Circle has a responsibility to be a driving force for sustainability.

We design and implement all of our programs following a clear Corporate Social Responsibility approach as well as high Environmental, Social and Corporate Governance standards. To that effect, we have committed to the United Nations Global Compact since 2018 in order to act upon the Sustainable Development Goals established by the UN.

We see the UNGC program as a valuable platform for ourselves and for our stakeholders to view our progress towards sustainability targets and drive future engagement. We have identified the most significant SDGs to focus on areas where we can contribute the most with direct and strong impact.

Our Sustainability Report showcases all of our efforts in 2020 towards our commitment to the SDGs and outlines future goals designed to help us drive sustainable growth forward for our society.

Download our report here