Laurence Kwan is Sunseap Group’s subject matter expert in the areas of electricity and electricity transactions in Singapore and Asia Pacific. He has amassed years of managerial experience in a variety of corporate sectors across a wide industry spectrum. He is also a strong advocate for renewable energy.
1. I understand that Sunseap has had over 30 years of experience in providing clean energy solutions in Singapore. What are the company’s proudest achievements so far?
One of our proudest achievements came in the form of a landmark agreement with Apple to supply 100% of its Singapore operations with 100% renewable energy via our portfolio of solar energy systems. It was the first 100% renewable energy agreement in South East Asia, and we were very proud to be associated with big brand name such as “Apple”
Our most recent achievement came in September ’17 via Banpu Public Company Limited’s SGD$75million investment into our company.
2. You’ve only recently joined Sunseap, how far do you see the growth of your company and solar energy in Singapore and in the region?
There is immense potential and room for the development of solar energy in Singapore and the region. Recently, the Deputy Prime Minster of Singapore mentioned the potential to have a peak of 2 GigaWatt-peak of solar energy by the year 2025. Apart from traditional setups via rooftops and ground mounted solar installations, Sunseap is also looking at floating solar energy systems to maximize the deployment of solar energy systems in Singapore.
Outside of Singapore, solar energy can benefit countries where there is a lack of electrification, particularly rural areas such as regions in Cambodia and Myanmar. Solar can be deployed at a much faster pace as compared to traditional power grids which takes years to develop, thereby having a greater potential to solve the rural electrification problem more readily.
3. Tell us more about Sunseap’s venture into Cambodia as the nation’s first solar project. How big is this project? What goals has the company set for the project?
Our solar farm in Bavet City, Cambodia is approximately 10 MegaWatt-peak (MWp). The solar farm serves the villages in Bavet City and helps to reduce the village’s reliance on neighboring Vietnam for electricity. The solar farm represents the Cambodian government’s step towards their target to have at least 70% of all Cambodian households to have access to grid electricity by the year 2030.
4. What challenges has Sunseap faced so far in the nascent renewable energy industry? And how are you overcoming them?
It is challenging to convince consumers of the importance and impact of using clean energy. Education is required to convey the benefits of clean energy and effects of global warming to the general public. We also found it challenging at times to explain our zero-cost clean energy solution to potential clients as many of them are not familiar with such models.
In order to provide zero-cost solutions for our clients, we also require a constant injection of large capital to fund our solar energy systems. Outside of Singapore, government regulations have proved to be most challenging with each country having its own set of rules and regulations.
5. How far or how soon do you think that renewable energy industry will replace fossil fuels as the main energy source to power the economies in this region?
I think we are still a couple of decades away from renewable energy surpassing fossil fuels as the main source of energy. For that vision to become a reality, the prices of the various renewable energy sources, as well as energy storage solutions must improve to the point where it makes economic sense for businesses to take up. Governments must make a stronger push to advocate the benefits and importance of renewable energy.
Energy storage solutions is a crucial component of this process as it will allow owners of the renewable energy generation assets to store the energy generated for later use, reducing cost over the long run.
6. You’ve been in the energy industry for some time now, and you’re considered a subject matter expert in the areas of electricity in Singapore & Asia Pacific. How did you get into this role?
It has been a long hard-fought journey since. Being true to our values and sincere to our calling to bring renewable energy to the wider masses, we have and will continue to work hard to develop better products and services in Singapore and Asia Pacific.
We also work closely with various government agencies to ensure Sunseap is constantly growing and learning together in all the countries that we plant our businesses in.
7. How has your professional network been important in getting you where you are today? Are you in favor of the idea of advancing your professional network through social media or networking platforms?
It is very important to enhance touchpoints. Professional networking platforms are very essential in sustaining the business. For this purpose, Sunseap’s MarComms team is always fanning out suitable platforms.
8. What makes Sunseap different compared to all other solar energy based companies in Asia?
Our integrated zero-cost solutions ensures the simplest way for our clients to adopt clean energy. We take care of areas such as project financing, installation and maintenance so that our clients can enjoy clean energy at a competitive rate. Our market share and proven track record also differentiates us from the other companies in the solar industry.
Our industry leading practices in our processes also sets us apart. For example, our Renewable Energy Certificates (RECs) goes through a stringent audit (by the Solar Energy Research Institute of Singapore) and verification process (by APX) by independent third parties to ensure accountability and transparency.
9. Other than in Singapore and Cambodia, where else have you seen the biggest growth in demand for solar energy, especially in South East Asia?
Countries like India and Thailand are leading the way in the solar energy movement. Setting targets respectively for 100 GigaWatts of solar power by the year 2022, and 40 percent of the country’s energy via renewable sources by 2036.
10. In this day and age, new technologies are emerging faster than ever before. How is technology reshaping the work that you do?
Advancement in technology has allowed us to reduce production and execution time, and improved the economics of solar panels significantly over the past decade. The advancement of technology allowed Singapore to reach grid parity around the year 2012. Grid parity is the phenomenon where the cost of generating solar energy is less than or equal to the cost of generating conventional energy. Grid parity allowed our business to not only make sense for us, but for our consumers too.
We’ve also embraced big data and analytics throughout our business processes. For example, we employ around the clock monitoring and maintenance with the aid of real-time analytics to maintain our solar energy systems at an optimal performance level. With the aid of technology, we are also looking into the combination of energy efficiency and smart home management systems to help clients reduce their energy consumption and carbon footprint. Going forward, we will also look at ways to improve the aforementioned services with the emergence of artificial intelligence and machine learning.
11. What is the company culture like in Sunseap Group?
We work in an open-office setting, where there is individual offices and no physical barriers. Staff at Sunseap are free to communicate across the various levels of management.
Even though our staff strength has reached approximately 100, our organisational structure still remains one of a flat-hierarchy, where there are only several line managers. By reducing physical barriers and channels of communication, we can advocate a culture of open communication.
12. As Sunseap expands its business locally and in the region, you will be planning to increase your workforce. What type of skills or qualifications are you looking at from new graduate hires?
Always on the lookout for an all-rounder. Candidates must possess basic engineering or finance degree from an accredited university, and having prior work experience or having done a successful internship in the energy sector will be most preferred.
13. What is the one piece of advice you can give to young professionals who are just embarking their careers in the energy industry?
Be diligent in what he/she does, never stop learning, and always apply what he/she is taught to better hone his/her skillset to become an all-rounder.
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Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
Headlines of the week
Midstream & Downstream
Global liquid fuels
Electricity, coal, renewables, and emissions
2018 was a year that started with crude prices at US$62/b and ended at US$46/b. In between those two points, prices had gently risen up to peak of US$80/b as the oil world worried about the impact of new American sanctions on Iran in September before crashing down in the last two months on a rising tide of American production. What did that mean for the financial health of the industry over the last quarter and last year?
Nothing negative, it appears. With the last of the financial results from supermajors released, the world’s largest oil firms reported strong profits for Q418 and blockbuster profits for the full year 2018. Despite the blip in prices, the efforts of the supermajors – along with the rest of the industry – to keep costs in check after being burnt by the 2015 crash has paid off.
ExxonMobil, for example, may have missed analyst expectations for 4Q18 revenue at US$71.9 billion, but reported a better-than-expected net profit of US$6 billion. The latter was down 28% y-o-y, but the Q417 figure included a one-off benefit related to then-implemented US tax reform. Full year net profit was even better – up 5.7% to US$20.8 billion as upstream production rose to 4.01 mmboe/d – allowing ExxonMobil to come close to reclaiming its title of the world’s most profitable oil company.
But for now, that title is still held by Shell, which managed to eclipse ExxonMobil with full year net profits of US$21.4 billion. That’s the best annual results for the Anglo-Dutch firm since 2014; product of the deep and painful cost-cutting measures implemented after. Shell’s gamble in purchasing the BG Group for US$53 billion – which sparked a spat of asset sales to pare down debt – has paid off, with contributions from LNG trading named as a strong contributor to financial performance. Shell’s upstream output for 2018 came in at 3.78 mmb/d and the company is also looking to follow in the footsteps of ExxonMobil, Chevron and BP in the Permian, where it admits its footprint is currently ‘a bit small’.
Shell’s fellow British firm BP also reported its highest profits since 2014, doubling its net profits for the full year 2018 on a 65% jump in 4Q18 profits. It completes a long recovery for the firm, which has struggled since the Deepwater Horizon disaster in 2010, allowing it to focus on the future – specifically US shale through the recent US$10.5 billion purchase of BHP’s Permian assets. Chevron, too, is focusing on onshore shale, as surging Permian output drove full year net profit up by 60.8% and 4Q18 net profit up by 19.9%. Chevron is also increasingly focusing on vertical integration again – to capture the full value of surging Texas crude by expanding its refining facilities in Texas, just as ExxonMobil is doing in Beaumont. French major Total’s figures may have been less impressive in percentage terms – but that it is coming from a higher 2017 base, when it outperformed its bigger supermajor cousins.
So, despite the year ending with crude prices in the doldrums, 2018 seems to be proof of Big Oil’s ability to better weather price downturns after years of discipline. Some of the control is loosening – major upstream investments have either been sanctioned or planned since 2018 – but there is still enough restraint left over to keep the oil industry in the black when trends turn sour.
Supermajor Net Profits for 4Q18 and 2018
- 4Q18 – Net profit US$6 billion (-28%);
- 2018 – Net profit US$20.8 (+5.7%)
- 4Q18 – Net profit US$5.69 billion (+32.3%);
- 2018 – Net profit US$21.4 billion (+36%)
- 4Q18 – Net profit US$3.73 billion (+19.9%);
- 2018 – Net profit US$14.8 billion (+60.8%)
- 4Q18 – Net profit US$3.48 billion (+65%);
- 2018 - Net profit US$12.7 billion (+105%)
- 4Q18 – Net profit US$3.88 billion (+16%);
- 2018 - Net profit US$13.6 billion (+28%)