BY TAIWAN BUSINESS TOPICSON 2023-04-18
As Taiwan pursues its ambitious program to adjust the energy mix for power generation to reduce carbon emissions, the need for organizations capable of delivering complex energy projects has never been more urgent. The government has adopted an ambitious “50/30/20 Plan” that calls for increasing the use of natural gas in power generation to 50% of the total and renewables to 20% within the next several years while decreasing the reliance on coal to 30%.
Bechtel – a global leader in energy infrastructure – has invested decisively in extending its established capabilities in Taiwan to support the national targets for energy transition. Considering Taiwan’s continued energy demand growth at a time when uncertainties beset the global economy, the successful execution of these projects remains a serious challenge. Bechtel is bringing its broad experience – it has constructed over 44,000 megawatts (MW) of combined-cycle power plants (CCPP) in 13 countries, including Taiwan, along with 15 LNG tanks in the past 15 years – to help meet the gas-to-power objectives. “Bechtel’s integrated Engineering, Procurement and Construction (EPC) execution model has a proven track record of improving project performance and efficiency, as well as providing delivery on time and within budget,” says Lee Broadhurst, Asia Operations Manager. “We want to bring our proven approach to delivering EPC projects to support Taiwan’s ambitious energy program,” notes Broadhurst, who is located in Taiwan and manages Bechtel’s interest in thermal power projects within Taiwan.
Two government-owned corporations, Taiwan Power Co. (TPC) and CPC Corp. Taiwan (CPC), are taking the lead in building the nation’s infrastructure, with Independent Power Producers also key to the transition. Given its extensive expertise and experience in the design and construction of gas-to-power projects, Bechtel is in a prime position to help.
A recent CCGT project completed by Bechtel in 2021. This 1,182MW CCGT was completed in 37 months even though much of the project was carried out during the Covid-19 pandemic.
Turbocharging by major LNG projects
In July 2022, Bechtel Energy broke ground on the CPC Taichung Phase III LNG import terminal at the Port of Tai-chung – two 180,000 cubic-meter full-containment LNG tanks. The work is scheduled for completion in 2026, at which time they will be the largest LNG storage tanks ever built in Taiwan. The project is a crucial step in meeting the country’s cleaner energy aspirations by rapidly expanding its LNG import terminals to provide a buffer against potential supply disruptions.
The expanded LNG storage capacity will support TPC’s ongoing construction of additional CCPP – units that use both gas and steam turbines. TPC currently has approximately 8.7 Gigawatts (GW) of new CCPP projects in construction, with an anticipated further procurement of an estimated 8 to 10 GW before the end of the decade, providing a platform for Bechtel to add value.
For Bechtel, an additional significant advantage is its ability to leverage the collective and individual expertise of its local team at Pacific Engineers & Constructors Ltd. (PECL), Bechtel’s wholly-owned subsidiary in Taiwan. Over its 44-year history in Taiwan, PECL has become highly familiar with the particulars of Taiwan’s engineering regulatory compliance regime and the needs of its customers.
An existing 2,000MW heavy oil burning power plant that is currently planned to be converted to a 1,300MW combined cycle gas turbine. PECL is serving as owner’s engineer for TPC on the project and provided the Environmental Impact Assessment and preliminary design of the power plant, LNG receiving terminal and LNG storage tank.
Bechtel's integrated delivery model
Navigating the complex energy transition plan requires accurate forecasting of the availability of new generating capacity, which in turn relies on timely procurement and execution of the major infrastructure projects involved. Establishing the foundations for such project success has long been one of the priorities of AmCham Taiwan’s Infrastructure Committee. The Committee has recommended that the government rely on merit bids rather than lowest price in the procurement process for strategic national projects, and that it consistently adopt contractual terms and conditions that align with contemporary market practices. These changes would encourage increased activity in the market by international players, helping to raise standards for critical projects in terms of safety, scheduling, supply chain management, and labor and execution planning.
Some progress is being made in tackling these concerns, with indications that they may be addressed in the next TPC procurement. “Bechtel welcomes this development as an opportunity to demonstrate the applicability of the company’s integrated approach to EPC management,” says Chris Hearn, Manager of Business Development Asia for Bechtel’s Energy business unit.
Bechtel’s integrated delivery model ensures the connectivity of each work scope through to the functioning of a completed power plant. It takes into consideration all pathways and how they interact with one another and anticipates influences from external sources. The recently completed 1200MW U.S. South Field Energy CCPP project successfully navigated the impact of Covid-19 as the project hit its critical construction and commissioning phase thanks to the immediate steps taken by the project team and the customer to protect the project’s targets.
The greater the alignment and understanding of common purpose within the team, the greater the ability to positively influence the outcome. At the Taichung Phase III LNG tank project, Bechtel is working with targeted Taiwanese contractors to address specific construction methodologies to enhance techniques to meet the requirements of the LNG and cryogenic market. Collaboration and early engagement with local contractors are a key part of preparing for success.