PowerSmart eyes ‘enormous’ Philippines solar potential; Northpower, Damwatch scope Southeast Asia work.
By Edward White, Energy News.
New Zealand energy service companies are looking to the Philippines for growth opportunities.
Executives from Tauranga-based solar firm PowerSmart and Whangarei-based lines company Northpower are this week travelling with Commerce Minister Craig Foss to a Manila trade fair hosted by the Asia Development Bank.
PowerSmart general manager Mike Bassett-Smith says the company has been looking at Southeast Asia as a growth market for some time.
“The scale of the opportunity is potentially enormous,” he says. “It’s very much along the same lines that you find in the Pacific, but just a much larger opportunity.”
The company, which employs 25 staff in New Zealand, late last year completed a $7 million off-grid solar development in Tokelau. The project made the islands the first community in the world to meet all its electricity needs with solar energy.
Bassett-Smith says there may be the potential to switch around 100 islands in the Philippines, currently powered by diesel-fired generators, to solar.
PowerSmart is looking closely at opportunities in Indonesia but the Philippines is particularly attractive. Marc-Antoine Simard, the firm’s business development manager, already has “significant” experience in the Philippines having lived there previously.
“By virtue of having him employed with us we have a huge network of people to work with there, outside of the trip.” Simard is on the visit with Foss.
Bassett-Smith says the costs of solar are coming down and the technology is more than competitive with diesel generation. However, in the company’s experience working in the Pacific, some of the cost savings can be offset by the involvement of governments or funders in the contracting process.
“Contract structuring, and the balance of risk and control, is a really important part of getting good pricing. If you mess that up too much you have too many parties pricing risk in.”
Bassett-Smith wouldn't comment on the company’s other offshore projects other than to say several new opportunities are being looked at in the Pacific and Central America. New Zealand sales for the first two months of 2013 were up about 160 per cent on the same period last year, and the company is seeing greater pick up in business customers.
Northpower is similarly upbeat on the potential to work in the Philippines and its chief executive Mark Gatland is taking part in the trade delegation. The company provides contracting services across electricity distribution, transmission and generation, and fibre. In recent years it has been successful in picking up work across the Pacific.
Spokesperson Steve Macmillan says the company’s history of working with the Asia Development Bank and its ability to work across multiple infrastructure services may help it pick up work in the Philippines.
“The fact that we can work in a number of different arenas - with our hydro experience, our solar, electricity and with our fibre – it really opens us up to put our hands up for a lot of different varieties of work,” Macmillan says.
The two-day ADB Business Opportunities Fair starts today. Foss says it will provide a “fantastic opportunity” for New Zealand companies looking at the wider Asia Pacific region. He also plans to meet with the Philippines’ Trade and Finance Secretaries.
“The Philippines’ economy is growing strongly, and President Aquino’s administration is making progress to improve the business environment,” Foss says. “Our ASEAN-Australia-New Zealand Free Trade Agreement offers opportunities for increasing two-way trade.”
Damwatch, MB Century
Sixteen firms are travelling with Foss as part of the trade delegation. Other businesses on the trip with energy-related services include MB Century, Meridian Energy subsidiary Damwatch, and engineering firms Tonkin & Taylor, Aecom and Boffa Miskell.
Damwatch business development and commercial manager Malcolm Young is taking part in the trip. Peter Amos, the company’s managing director, says Young’s presence will support other international financial institution initiatives Damwatch has in Southeast Asia, as well as work the company is already doing in the region with commercial clients.
MB Century chief executive Marcel Manders and mechanical services manager John Barrat are also on the trip.
Manders says the Taupo-based company is looking for opportunities in Southeast Asia to provide hydro power station owners technical and project management support.