From pv magazine 10/22
The economies of Southeast Asia are rising, together with their demand for vitality. In its “Southeast Asia Power Outlook 2022” the Worldwide Power Company (IEA) famous that after a quick disruption because of the Covid-19 pandemic, vitality demand within the area is predicted to proceed to broaden by roughly 3% per 12 months, with financial development at 5% yearly, by way of 2030.
These “tiger economies” stay reliant on fossil fuels for his or her vitality provide. Three-quarters of the rise in vitality demand anticipated by the IEA is forecast to be met by fossil fuels – leading to a 35% improve in CO2 emissions. And carbon emissions usually are not the one drawback. The IEA concludes that the area’s reliance on standard vitality ends in a “worsening in its vitality commerce steadiness as fossil gas demand outpaces native manufacturing.”
There are, nevertheless, optimistic traits rising within the area by way of the adoption of renewable vitality – with grid enhancement and regional interconnectivity set to play a vital function in these developments. The IEA observes that 40% of the $70 billion in vitality funding that was made in Southeast Asia between 2006 and 2020 went in the direction of “clear vitality applied sciences – principally photo voltaic, wind, and grids.”
An accelerated enlargement of photo voltaic uptake in Southeast Asia stays key, with most nations making pledges to scale back emissions. Company electrical energy customers within the area are additionally in search of to decarbonize and increase environmental, social, and company governance efficiency.
“Over the past 5 years we’ve positively seen a whole lot of momentum within the area,” says Caroline Chua, who leads BloombergNEF’s Southeast Asia energy and renewables analysis. “There was a whole lot of curiosity from governments, financiers, builders… however on the bottom, there are nonetheless challenges on the coverage facet, in the marketplace growth facet, and even on the facility market design side, to unlock the trade additional.”
Chua notes the differing challenges that the enlargement of photo voltaic faces in every nation however says regional cooperation is below method to improve grid interconnection and facilitate elevated vitality buying and selling.
“There may be the overarching dialogue of the ASEAN energy grid, which has been ongoing for a number of years,” continues Chua. “We are actually beginning to see some developments. They’re connecting Laos, Thailand, Malaysia, Singapore. It isn’t particularly for photo voltaic however it might encourage extra renewables growth.”
Community wants are a typical macro-trend in world vitality markets. In September, advisory and danger administration service supplier DNV reported that 87% of the “vitality leaders” it surveyed mentioned “there may be an pressing want for higher funding within the energy grid.” Additional, 76% of trade respondents reported that the supply of grid connection was a constraint in connecting renewable vitality initiatives.
“We are actually coming into a paradigm shift and the trade have to be ready to work collaboratively to organize our energy methods for the long run. To transition a lot quicker, we now have to combine new applied sciences and encourage grid funding by way of forward-thinking insurance policies and regulatory frameworks,” mentioned Ditlev Engel, CEO of Power Techniques DNV, in an announcement.
Enhanced interconnection between ASEAN nations has been pursued since 2016, with the joint purpose of enhancing “vitality safety, accessibility, affordability, and sustainability for all,” in line with the initiative’s said goals.
This system, known as the ASEAN Plan of Motion for Power Cooperation (APAEC), has reached section two. The plan runs from 2021 to 2025 and features a secondary purpose of “accelerating vitality transition and strengthening vitality resilience by way of higher innovation and cooperation.” And there are clear advantages for this system for renewables uptake within the area.
Singapore stays an financial powerhouse within the Southeast Asian area, and a monetary hub. Town state is reliant on gasoline imports for 95% of its electrical energy technology. And with gasoline costs excessive, resulting from Russia’s invasion of Ukraine, electrical energy costs in Singapore are rising – in Q3, 2022 the regulated residential worth rose to round SGD 0.302 ($0.212)/kWh.
Singapore is adopting photo voltaic domestically and its Power Market Authority (EMA) is pursuing a goal of 1.5 GW of PV by 2025 and not less than 2 GW by 2030. Whereas meager, these targets are dictated by a scarcity of land, the EMA notes, with PV to “probably represent solely about 3% of the nation’s whole electrical energy demand in 2030.”
To beat this problem, in October 2021 the EMA launched its first request for proposal for the import of a part of an eventual 4 GW of “low carbon electrical energy imports into Singapore” by 2035. The primary of those imports started again in July, with as much as 100 MW of hydropower set to be imported from Laos by way of the Thailand-Malaysia-Singapore interconnection – the LTMS-PIP.
The potential of photo voltaic exports to Singapore has garnered appreciable curiosity, together with in Indonesia, reviews JY Chew, the top of Asia renewables analysis at Rystad Power. “Indonesia is in an excellent place to benefit from this,” says Chew. “It has a number of land on islands close by to produce Singapore with renewable vitality.” Photo voltaic initiatives established in Indonesia for export to its affluent neighbor will probably be bolstered with vitality storage to maximise the variety of hours every day photo voltaic might be exported by way of an costly interconnector – supplying one thing approaching baseload energy.
pv journal print version
The subsequent version of pv journal, due out on Nov. 8, is ready to think about the rise in reputation of baseload photo voltaic PPAs in Germany.
Rystad’s Chew provides that Vietnam might additionally look to export photo voltaic in a transfer which can, amongst different business elements, ease curtailment points in southern and central Vietnam.
A substitute for Indonesia and Vietnam lies additional afield, in Australia. There, the vastly formidable Solar Cable undertaking has drawn the assist of high-profile-backer billionaires Andrew “Twiggy” Forrest and Mike Cannon-Brookes, by way of their enterprise arms.
But whereas there may be little doubt that Australia might generate low-cost photo voltaic in its far north, for export to Singapore, the interconnection it will require is actually immense. “The Solar Cable undertaking in Australia is simply too lengthy,” says Chew. “It’s a 4,000 km subsea cable by way of Indonesia. However, surprisingly, that undertaking has been passing by way of plenty of approval phases and it by some means would possibly pull by way of.”
The free movement of renewable vitality is just not a given in every single place, nevertheless. In October 2021, Malaysia made strikes to halt the export of renewable electrical energy to Singapore – preferring as an alternative to see its domestically produced renewables used to fulfill nationwide targets. Malaysian information company Bernama reported that the nation’s “Information for Cross-Border Electrical energy Gross sales” was being reviewed relating to that intention, and that charges for “wheeling” electrical energy throughout its grid to Singapore, over a two-year trial interval, will likely be $0.0228/kWh.
Vietnam’s cautionary story
One of many excellent photo voltaic markets within the area, and certainly globally, lately has been Vietnam. On the again of its nationwide feed-in tariff program and relaxed overseas funding legal guidelines, Vietnam’s PV market exploded. The nation put in simply 200 MW of photo voltaic in 2018, a determine which rocketed to five GW in 2019, and 12 GW in 2020, in line with BloombergNEF figures.
“The 2 photo voltaic FIT schemes drove two consecutive photo voltaic booms within the nation,” says BloombergNEF’s Chua. “The supporting insurance policies have ended and due to the present energy market construction, with one single off-taker – and that there is no such thing as a coverage for them to buy photo voltaic – there may be now no manner for builders to strike an influence buy settlement to promote their photo voltaic electrical energy to the grid.”
Chua notes that behind-the-meter initiatives are actually the one ones transferring ahead and it seems that the subsequent spherical of Vietnam’s energy growth plans are progressing slowly, with “little or no photo voltaic ambition within the drafts.”
Vietnam’s photo voltaic might, in reality, be a sufferer of its personal in a single day success. Dharmendra Kumar, a photo voltaic analyst with IHS Markit – now part of S&P International – says that he understands that some 3 GW to three.5 GW of the initiatives developed below Vietnam’s FIT packages usually are not grid linked or producing at full capability.
“What is occurring now’s that the federal government is doing checks, one after the opposite, on the entire initiatives,” says Kumar. “I believe that not all of them have been put in, or possibly have been put in in a rush or in a spot the place close by grid connection is just not accessible. Placing within the grid connection will price and can make the initiatives economically unviable. There was a rush to put in.”